A record $10.4 million in regular unemployment benefits were paid to an all-time high 39,000 idled workers this week, and the national recession’s grip on the Idaho economy will trigger a further extension of jobless benefits on Monday.
It is the second straight week that the Idaho Department of Labor has paid out more than $10 million in unemployment benefits, but the $200,000 increase from the previous week was expected as part of a well-established seasonal pattern. In addition to the regular benefit payout, the department also paid $1.9 million in federally funded extended benefits to 7,100 more out-of-work Idahoans, who had already exhausted their regular state benefit allotment. In December, 35 percent of unemployment claimants had exhausted their regular state benefits, a level approaching the exhaustion rate in late 2003 as the state worked its way out of the 2001 recession.
With layoffs being announced around the state almost daily, Idaho’s unemployment rate more than doubled in 2008 from 2.8 percent in January to 6.4 percent in December. Nearly 50,000 people were looking for jobs as the year ended.
That escalation in unemployment has triggered an additional extended benefit program for workers who are still without jobs and have already exhausted their regular unemployment benefits of up to 26 weeks and the federally-financed extended benefits of up to another 26 weeks.
The department this week notified over 300 people believed to be in that situation that they could be eligible for up to 13 more weeks of federal-state extended benefits. Idaho’s employer-supported Unemployment Insurance Trust Fund pays the regular state benefits, and the federal government pays for the federal extended benefits. The new extended benefit program is financed by the state trust and the federal government equally and has more stringent qualifying criteria than the federally funded extended benefit program.
The deteriorating job picture has sent unemployment benefit payouts to new records nearly every week since November, and that has dramatically increased the drain on the state’s trust fund, which stood at around $165 million at the end of January. The fund balance was almost $320 million in November 2007.
As a result, the department is taking steps so it is prepared to borrow from the federal government either late this year or in early 2010 to maintain unemployment benefit payments. A loan will be needed despite a 70 percent increase in the tax rates paid by employers in 2009 because of the rapid increase in unemployment. Seven states led by Michigan have already borrowed over $2.3 billion from the federal government to keep benefits flowing to their unemployed workers.