State Pays Out Record Amount in Unemployment Benefits

A record $8.3 million in regular state and federal extended unemployment benefits were paid to nearly 32,000 jobless Idaho workers this past week, a further sign of a deepening recession.

The Idaho Department of Labor paid more than $6.5 million in regular benefits to just over 25,000 people and another $1.8 million in federally financed extended benefits to 6,800 more, who had already exhausted their regular state allotments.

"The Department of Labor is doing everything we can to help people find new jobs or get the training or education to prepare for different jobs," Labor Director Roger B. Madsen said. "But with employers exercising extreme caution about the future, the employment picture remains dim for the next several months. That makes these benefits even more important to the families who receive them and to the businesses in their communities who rely on those families to stay afloat."

It was the second straight week regular state benefits have totaled more than $6 million, something that never previously happened in the 73-year history of the unemployment insurance program.

The combination of regular and federal extended benefits at $8.3 broke the previous combined record payout of $6.1 million in January 2003.

With the highest months for unemployment - January and February - still ahead, department analysts expect the weekly regular benefit payments to exceed $7 million in early 2009. They see little indication that the deteriorating employment picture will change before late next year.

In November, the seasonally adjusted unemployment rate was 5.8 percent, three full percentage points higher than in January. Over 20,000 fewer people had jobs than just a year ago, and a record 44,000 people were out of work.

The demand for assistance caused by the rapid increase in unemployment has dramatically reduced the balance in Idaho's Unemployment Insurance Trust Fund from nearly $320 million a year ago to about $215 million now. In 2008, the department has been paying out just over two dollars in benefits for every one dollar employers pay in unemployment insurance taxes, triggering a 70 percent overall increase in tax rates for 2009 to begin restoring the fund to solvency.

Below is a graph showing the amount of regular state benefit payments by week for 2003, the previous record year; last year, 2007; and this year, 2008.