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Washington had largest increase in annual wages in state's history last year. Here's why

The state's annual wages increased by 10% in 2020. The rise is driven by low wage workers losing their jobs during the pandemic.

WASHINGTON, USA — The annual income in Washington increased 10.1% in 2020 during the COVID-19 pandemic but that jump did not come from people making a lot more money. 

The driving force behind the increase was lower-income workers in industries such as food service losing their jobs after business closures, while higher-paid workers moved remote and remained employed.   

Washington's Employment Security Department (ESD) said it is common for average wages to rise during a recession since lower-wage workers are more at risk of losing their jobs, but this shift during the pandemic was more dramatic than the Great Recession.

It was the largest annual increase in the state's recorded history with the average wage rising to $76,741, according to the state ESD. That number is calculated only using the wages of people in the workforce covered by unemployment insurance, so lower-wage workers who lost their jobs last year were not counted in the calculation.    

There was a 4.9% decrease in covered employment and the average number of workers in Washington covered by unemployment insurance decreased by just over 164,161 workers in 2020.  There was a 4.7% increase in total earnings, which grew by nearly $10.9 billion in 2020. 

The increases did have a major effect on average weekly wages. That only increased from $1,340 in 2019 to $1,475 in 2020. 

The industries that saw the largest average wage growth in 2020 were Information, up 16.9 percent; Retail trade, up 14.6 percent; and Arts, Entertainment and Recreation sector, up 14.3 percent.

The average annual wage is used to calculate unemployment benefits for jobless workers. The increase will mean more money for those who file unemployment claims after July 4. The minimum weekly unemployment benefit will increase to $295 and the maximum weekly benefit increases to $929.

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