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Unemployment insurance drop.

Unemployment Insurance Drop.

This year Alaska's 13,377 employers will pay an average 3.51 percent rate on unemployment insurance tax, a decrease from last year's average of 4.14 percent, according to the Alaska Department of Labor. Rates for Alaskan workers also dropped from 0.7 percent to 0.6 percent.

Alaska's unemployment insurance financing system automatically sets rates according to the level of benefit payments and wages during the prior three years and the level of trust fund reserves. During the recent recession, unemployment insurance benefits paid out to unemployed workers were at record highs, and the trust fund was depleted to about 29 percent of its previous high mark.

The financing system's delay mechanism causes the most severe rate increases to occur after the worst part of a recession is over, which is why the contribution rates were highest in 1988 and 1989. The labor department says recent decreases are the result of a fairly strong economic recovery. It expects employer rates to be about 2.7 percent in 1991 and 2.2 percent in 1992.
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Title Annotation:Alaska
Author:Manna, Victor
Publication:Alaska Business Monthly
Date:Mar 1, 1990
Words:179
Previous Article:Silver Lining expands.
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