Unemployment insurance program turns 75

The Bellingham Business Journal

At a time when a record number of people are relying on unemployment benefits, the state’s unemployment insurance program is celebrating a milestone of 75 years.

The state of Washington has paid out $28 billion in unemployment benefits to more than 11 million workers since the system was created in 1935.

On Aug. 14 of that year, President Franklin D. Roosevelt signed into law the Social Security Act, which also created the unemployment insurance program. The purpose of unemployment insurance, Roosevelt said, is to “give some measure of protection to the average citizen and his family against the loss of a job” and to “lessen the impact of future depressions.”

Washington was one of five states – including New York, California, Massachusetts and Utah – to pass legislation in 1935 in anticipation of the Social Security Act. But it wasn’t until 1938 that Washington began collecting unemployment insurance taxes from employers.

“For 75 years, unemployment insurance has helped Americans weather the cyclical nature of our economy,” Employment Security Commissioner Karen Lee said in a press release. “From the Great Depression to the Great Recession and all of the economic downturns in between, unemployment benefits have been a lifeline for jobless workers and their families.”

More than $6 million in benefits were paid to jobless workers in Washington in 1939, the first year benefits were paid to claimants. The average weekly benefit check was less than $12, and the maximum benefit check was about $15.
Nearly 250,000 Washington workers were covered by the insurance program in its first year, compared to nearly 2.8 million today.

Last year, more than 470,000 people collected $4 billion in benefits in Washington, compared to nearly 78,000 claimants in 1940 (claimant numbers for 1939 are not available). The average benefit check is now about $380, and the maximum for 2010 claims is $570.

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