Five Facts About the Economy and Deficit Fact 3: People Are Losing Their Jobs

Washington State is facing a sustained period of high unemployment. The unemployment rate is projected to rise to 8% or higher (see graph below). That would mean that one of every twelve Washingtonian workers would not be employed despite their efforts to find work.

Additionally, the Economic and Revenue Forecast Council projects that the number of jobs in the state began to fall in the second quarter of 2008 and will continue to fall until the second quarter of 2009—five straight quarters of job loss. Employment will start to grow in the third quarter of 2009, but will not reach the previous level until the end of 2010 (see graph below). In the meantime, the size of the labor force will have grown and many more jobs will be needed to lower the unemployment rate.

Lasting spells of unemployment can be devastating. Families and individuals rely on employment to provide basic necessities including food and housing. When people lose their jobs, they often lose their access to affordable health insurance as well. The negative impact isn’t limited to the unemployed; it also drags down wages and economic activity more broadly.

Shoring up programs that provide economic security should be a top priority of the state budget in these tough times. As we’ve discussed, the Governor’s budget would do the opposite; it would harm the ability of the state to provide economic security.

A potential bright spot is the Governor’s proposal to provide a temporary increase in benefits for unemployed workers. More on that tomorrow in "Fact 4: The Economy Needs a Big Push."

Underlying data come from the Economic and Revenue Forecast Council.