Best to leave Washington unemployment insurance alone

THE last-minute effort in Olympia to make the state's unemployment-insurance system more generous is dangerous, especially now.

Unemployment insurance rests on a trade-off. The higher the benefit, and the more people who receive it, the less suffering there is and the less pain among businesses in the community. But high benefits also encourage recipients to be choosier about a new job and slower to look for one.

Benefits for people who voluntarily quit make it more attractive to quit. High benefits require high taxes on employers, making it cost more to create a job.

In unemployment pay, Washington is not a cheap state, nor is either side — labor and business — proposing to make it one. It has the fifth-highest unemployment benefit among the states and the sixth-highest level of taxes.

And there it would have stood, except that the system required some fixes to make it compatible with federal law. The Senate made the fixes in a balanced way in Senate Bill 5963, sponsored by Sen. Jeanne Kohl-Welles, D-Seattle. But in the House, the Committee on Commerce and Labor has tipped the bill in favor of more benefits.

First, they proposed a permanent increase of 4 percent in the benefit formula.

Second, they said any employee who quits a job in a situation when it was prudent to quit gets full benefits. The bill leaves the judgment of what's prudent to state employees, who could be swayed by a good hard-luck story.

Third, the House committee added provisions for a big tax increase on employers if the insurance fund falls below a certain point. It is well above that point, so they can say the increase is in theory only, but their changes will tend to make the fund shrink.

All these changes will make it harder for employers to cope with the recession, and harder to dig their way out. They will make it easier for Boeing or other employers to leave. We are against them.