New Unemployment Claims Drop As Washington Roots Out Fraudsters

WASHINGTON — For the week of May 17-23, a total of 48,445 Washingtonians applied for unemployment for the first time. The week before, 138,733 did. That's a 65 percent decrease in new unemployment claims, which the Employment Security Department is crediting in part to their recent efforts to root fraudsters out of Washington's unemployment system.

On May 21, state officials confirmed that an international fraud ring had stolen upwards of hundreds of millions of dollars from the unemployment system by filing claims using stolen identities. To root out the fraudsters, the department halted all payments for several days to re-evaluate all claims and install new safeguards.

Now, after seeing the dramatic decrease in new unemployment claims, ESD leaders are calling it a sign that those fraud protections are working.

"The dramatic decline in initial claims this week is a strong signal that the additional steps we are taking to address imposter fraud are working," said ESD Commissioner Suzi Levine. "We’ve already recovered and stopped the payments of hundreds of millions of dollars in fraudulent claims in the past two weeks, and we will continue to reclaim every dollar we can.”

As The Seattle Times reports, the Employment Security Department has already reclaimed more than $300 million of the money lost to scammers. How much money remains lost is still unknown.

As the number of new claims dropped, the total number of claims has also taken a slight dip, possibly indicating a path towards recovery as businesses across Washington begin to reopen as many counties move into Phase 2 of the Safe Start reopening plan.

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Claims filed in Washington from May 17-23

Breaking claims down by industry also gives some insight into which sectors of the economy may be recovering. Health care and social workers had their claims drop 66 percent over the previous week. Similarly, retail workers filed 60 percent fewer claims and there were 66 percent less unemployment claims from manufacturers as well. Retailers and manufacturers are among the industries allowed to return to work in Phase 2 of Gov. Inslee's Safe Start plan.

Not every industry is making a bounce-back, however. On Wednesday, Boeing announced plans to cut nearly 10,000 jobs in Washington before August.

Nationwide unemployment continues to climb

While Washington saw a dip in claims over the last week, the country at large continues to see unemployment skyrocket.

An estimated 2.1 million more Americans applied for unemployment last week, bringing the total to around 41 million people across the country seeking unemployment benefits. At this rate, economists estimate the US unemployment rate will be nearly 20 percent for May.

The national unemployment rate was 14.7 percent in April, already a record-breaking number not seen since the Depression. At this rate, some economists forecast that unemployment could remain in the double-digits through 2021.