Billions from state government bolstering families and businesses across Washington

The House Commerce and Labor Committee got an update this week from the state Employment Security Department. As you can expect, the unemployment rate is too high, but there are some important details to point out about our state’s system. Namely, its health and the boost to families and businesses the UI system provides us.

ESD reports they paid out a record $3.967 billion in unemployment benefits in our state last year.

Even with the lowest tax rates in 40 years (an average of 1.55%), the number receiving unemployment benefits is about 264,000 a week currently.

Due to our well-managed system, Washington will not trigger solvency surcharge, even at lowest forecasted balance: 10.2 months of benefits in 2011. Our UI system is still solvent and, at $2.6 billion, it has the ability to pay out 13.2 months of benefits.

This system is arguably the envy of the nation – the Washington Post reports: “According to federal projections, 40 state programs will go broke within two years and need $90 billion in loans to keep issuing the benefit checks.”

“Currently, 26 states have run out of unemployment money and have borrowed $24 billion from the federal government to cover the gaps. By 2011, according to Department of Labor estimates, 40 state funds will have been emptied by the jobless tsunami.”

We wish all those states the sincerest best of luck in getting out of that mess, and consider ourselves fortunate to live in Washington, the first and only state in the nation to reduce unemployment insurance rates for employers during this economic downturn.

It’s important to note here that the ability to provide this economic security not only benefits families, it benefits the businesses that rely on those families to stay open. Even conservative analysts agree, the quickest, most effective subsidized shot in the arm to the economy comes from putting money directly into the pockets of consumers through programs like unemployment insurance.

As our own Rep. Steve Conway wrote in a News Tribune op-ed last year:

“Let’s remember that the greatest stimulus to our economy is one that puts money directly into the pockets of our consumers. A business can’t survive and keep employees without customers, who seem absent from your formula for economic stability. In reality, the direct assistance to families on the brink … will provide a much-needed shot in the arm to our economy.”

That said, up to 277,210 will reach the maximum allowable amount of benefits by December 1 here in Washington. Those folks, and their families, will thus rely on other state services to provide for them. And, unless something is done, the businesses that relied on them will struggle even more.