Consider this: A truck driver in Kirkland was fired after he wrecked a company truck and was caught drinking and smoking marijuana on the job. Even though unemployment benefits are to be paid only to workers who lose their jobs through no fault of their own, bureaucrats at the state unemployment office decided to give him the money anyway.

An employee at the Dept. of Social and Health Services (DSHS) was fired after he was arrested for extorting money from refugees in return for putting them on public assistance. Despite evidence gathered during a federal investigation, the Dept. of Employment Security (DES) ruled that the man had done nothing wrong and gave him unemployment benefits. In the end, DSHS had to file an appeal to get the decision overturned.

In fact, according to the Joint Legislative Audit Review Committee, DES decisions consistently fail to meet federal standards, and the U.S. Dept. of Labor ranks the quality of Washington’s claims determinations sixth worst in the nation. Why should you care? Because scam artists, bad decisions, and lax oversight are stealing your taxes, your salary, and could ultimately steal your job.

Unemployment benefits are paid for by employers — public and private — through unemployment insurance (UI) taxes. Originally, the idea was to provide benefits only to those people who lost their jobs through no fault of their own. If you quit voluntarily, no benefits, right? Wrong.

For example, an employee made a habit of threatening to resign every time she didn’t get what she wanted. One day, she submitted her resignation when the new boss refused her request to fire one of the secretaries. When the boss accepted the resignation, she filed for unemployment and got it because “the job circumstances had changed.”

Generous benefits, high taxes

Except for Alaska, our state’s unemployment benefits are highest in the nation. The top benefit is $490 per week, and because of our high 8.2 percent jobless rate, recipients can now collect benefits for almost ten months.

Not surprisingly, Washington’s unemployment taxes are also second highest in the nation, and because of the bad economy, they’re about to go even higher.

In 2002, Washington employers will pay $1.1 billion in unemployment insurance taxes. Unless the system is reformed, the State Employment Security Dept. predicts employers will see their UI taxes go up, on average, by over 50 percent by January 2004 — a whopping $700 million. In fact, Boeing Commercial Airplane President Alan Mulally told legislators, “Of all the places Boeing does business throughout the world, Washington has the worst unemployment system. The worst in the world.”

Despite that, some lawmakers want to make the system even more costly by further expanding UI benefits, providing unemployment benefits to victims of domestic abuse and to employees who take unpaid family leave.

Economic death spiral

Ironically, when a struggling business is forced to make layoffs, its UI taxes actually increase! Further increasing and expanding UI benefits could put Washington’s fragile economy into a death spiral:

Expanding unemployment benefits = higher UI taxes = more business failures = more layoffs = higher unemployment rates.

Legislators should ask themselves a question: “Will increasing the ever-mounting tax burden on already struggling employers help retain and create jobs? The obvious answer is “no.”

Everyone wants to provide benefits to workers who lose their jobs through no fault of their own. Legislators must realize that Washington’s unemployment insurance system is out of control and is actually costing our state jobs.

The solution to the UI crisis is the same as the solution to the budget crisis: Neither problem will be solved without an exhaustive, in-depth review in which legislators and the governor set priorities and make tough choices.

It’s not an easy answer, but it is the only answer.

(Editor’s Note: Don Brunell is president of the Association of Washington Business, which acts as Washington State’s Chamber of Commerce. It is the largest business group in the state with a membership in excess of 30,000.).