#1Still Solvent Utah's Unemployment Insurance Trust Fund OLRGC Office of Legislative Research and General Counsel#2Presentation Outline Selected Federal and State Unemployment Statistics Background: Federal/State Unemployment Insurance Trust Fund Systems Solvency of Utah's Fund NOTE: for the Unemployment Insurance portion of the presentation, I am indebted to Bill Starks, Utah's Unemployment Insurance Director, for his kind and willing assistance in Providing Ul data and responding to my questions.#3Defining Terms Unemployment Rate (UR) - % of the total civilian labor force that is currently out of work Labor Participation Rate (LPR) - % of those currently out of work that are actively seeking work Civilian Labor Force - Sum of employed and unemployed Discourated Worker - Eligible and willing to work but unemployed and not attempting to find work during the previous four weeks Marginally Attached Worker - Willing and able to work and either held a job or searched for a job in the past year, but not actively seeking employment#4Participation and Unemployment Rates of Civilian Population Not Seasonally Adjusted Seasonally Adjusted Labor Participation Rate (LPR) + Unemp. Rate (UR) by Age, Sex Aug July Aug Aug April May June July Aug 2009 2010 2010 2009 2010 2010 2010 2010 2010 LPR - Total Civilian Labor Force UR-Total Civilian Labor Force LPR - Men 16 Years and Over UR-Men 16 Years and Over LPR - Men 20 Years and Over UR-Men 20 Years and Over LPR - Women 16 Years and Over UR - Women 16 Years and Over LPR - Women 20 Years and Over UR- Women 20 Years and Over LPR - Both Sexes, 16-19 Years 65.6 65.3 65.0 65.4 65.2 65.0 64.7 64.6 64.7 9.6 9.7 9.5 9.7 9.9 9.7 9.5 9.5 9.6 72.4 72.1 71.7 72.2 71.8 71.5 71.3 71.1 71.4 10.1 10.0 9.8 11.0 10.8 10.5 10.5 10.4 10.6 74.9 74.4 74.4 75.0 74.7 74.5 74.3 74.1 74.3 9.4 9.2 9.1 10.2 10.1 9.8 9.9 9.7 9.8 59.3 58.8 58.6 59.1 59.0 58.9 58.5 58.4 58.5 8.9 9.4 9.3 8.3 8.8 8.8 8.3 8.5 8.6 60.7 60.1 60.1 60.7 60.7 60.6 60.3 60.1 60.1 8.3 8.6 8.6 7.7 8.2 8.1 7.8 7.9 8.0 40.7 42.6 38.5 37.5 35.9 35.6 34.1 34.6 35.2 UR- Both Sexes, 16-19 Years 24.2 26.5 25.1 25.7 25.4 26.4 25.7 26.1 26.3 Data Source for these slides: United States Bureau of Labor Statistics, September 3, 2010#5Unemployed by Duration of Unemployment (numbers in thousands) Duration Not Seasonally Adjusted Seasonally Adjusted Aug July Aug Aug April May June July Aug Number of Unemployed 2009 2010 2010 2009 2010 2010 2010 2010 2010 Less than 5 Weeks 2,867 3,111 2,632 2,992 2,682 2,752 2,769 2,839 2,760 5 to 14 Weeks 4,322 3,507 3,939 4,093 2,991 3,019 3,121 3,060 3,635 15 Weeks and Over 7,633 8,519 8,189 7,849 8,969 8,924 8,959 8,722 8,484 15 to 26 Weeks 2,572 1,978 1,916 2,825 2,253 2,161 2,208 2,151 2,235 27 Weeks and Over 5,061 6,541 6,273 5,024 6,716 6,763 6,751 6,572 6,249 Av. (Mean )Duration in Wks 25.1 32.6 33.1 25.2 33.0 34.4 35.2 34.2 33.6 Median Duration in Weeks 15.5 20.3 19.6 15.5 21.6 23.2 25.5 22.2 19.9 Percent Distribution Less than 5 Weeks 19.3 20.6 17.8 20.0 18.3 18.7 18.6 19.4 18.5 5 to 14 Weeks 29.2 23.2 26.7 27.4 20.4 20.5 21.0 20.9 24.4 15 Weeks and Over 51.5 56.3 55.5 52.6 61.3 60.7 60.3 59.7 57.0 15 to 26 Weeks 17.4 13.1 13.0 18.9 15.4 14.7 14.9 14.7 15.0 27 Weeks and Over 34.1 43.2 42.5 33.6 45.9 46.0 45.5 44.9 42.0#6Unemployed by Industry and Class of Worker (not seasonally adjusted) Industry and Class of Worker Total, 16 years and Over Nonagricultural Private Wage and Salary Workers Mining, Quarrying, and Oil and Gas Extraction 14, 823 Unemployed (in thousands) Unemployment Rates August 2009 August 2010 August 2009 August 2010 14,759 9.6 9.5 11,729 11,285 9.8 9.4 93 93 11.8 10.9 Construction 1,542 1,483 16.5 17.0 Manufacturing Durable Goods 1,866 1,463 11.8 9.5 1,297 984 13.0 10.0 Nondurable Goods 569 479 9.7 8.6 Wholesale and Retail Trade 1,794 1,909 8.8 9.3 Transportation and Utilities 547 440 9.8 7.3 Information 358 302 10.7 9.7 Financial Activities 566 606 6.0 6.7 Professional and Business Services 1,560 1,524 11.0 10.5 Education and Health Services 1,239 1,430 6.0 6.7 Leisure and Hospitality 1,636 1,507 12.0 10.8 Other Services 528 530 8.2 8.3 Agriculture and Related Private Wage and Salary Workers 195 114 13.1 7.9 Government Workers 1,118 1,292 5.1 6.0 Self-Employed and Unpaid Family Workers 569 638 5.3 6.1#7Household Data -- Alternative Measures of Labor Underutilization (percent) Not Seasonally Adjusted Seasonally Adjusted Measure Aug July Aug Aug April May June July Aug 2009 2010 2010 2009 2010 2010 2010 2010 2010 Persons unemployed 15 weeks or longer, as % of civilian labor force 4.9 5.5 5.3 5.1 5.8 5.8 5.8 5.7 5.5 Job losers + persons who completed temporary jobs, as % of civilian labor force 6.0 5.8 5.7 6.4 6.0 6.0 5.9 5.9 6.0 Total unemployed as % of civilian labor force (official unemployment rate) Total unemployed + discouraged workers as % civilian labor force + discouraged workers Total unemployed + disc workers + all others marginally attached to labor force as % of civ labor force + all marginally attached Total unemployed + all marginally attached + total employed part time for econ. reasons as % of civ labor force + all marg attached 9.6 9.7 9.5 9.7 9.9 9.7 9.5 9.5 9.6 10.0 10.4 10.2 10.1 10.6 10.3 10.2 10.2 10.3 10.9 11.2 10.9 11.0 11.3 11.0 11.0 11.0 11.0 16.5 16.8 16.4 16.8 17.1 16.6 16.5 16.5 16.7#8Utah Unemployment Rate 1990 - July 2010 Percent 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 Year 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 10 Data Source: Utah Department of Workforce Services#9Unemployment Insurance (UI) Trust Fund -- Background • Created During the Great Depression . Purposes - To accumulate and hold significant funds during good economic times - Pay benefits during economic downturns - Stimulate a stagnant economy - Strengthen the attachment between employers and their skilled workers during temporary layoffs#10UI Trust Fund How it Works • Federal Taxes levied Annually on Employers Higher Rate Paid by Employers with higher % of former employees receiving benefits ⚫ State Payroll Tax •Funds Go to Three Federal Accounts -state program administration - -50% share of the extended benefits program - loan fund for insolvent states#11UI Trust Fund How it Works, cont. • UI Programs Operated by the States ⚫ States determine UI Eligibility, Benefit Levels, and Duration of Benefits - "Weekly Benefit Amount": 1/26th of the individual's total wages for work paid during the quarter of the base period in which the total wages were highest" (UCA 35A-4-401(2)) - "Base Period" the first four of the last five completed calendar quarters of work performed (UCA 35A-4-201(1)) - Alternative Base Period The last four completed -- quarters. This begins in January 2011 and is for individuals who have insufficient earnings in the regular base period.#12UI Trust Fund Beginning Year Balance: 1985-Present Millions 900 800 700 600 500 400 300 200 100 0 Year 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Data Source: Utah Department of Workforce Services#13UI Trust Fund Levels: Quarterly Since March 2008 Millions 900 800 700 600 500 400 300 200 100 0 Quarter M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 Data Source: Utah Department of Workforce Services#14● States and UI Solvency In the current recession, UI Trust Funds in 34 States and the Virgin Islands have gone Insolvent Three States have since paid off Federal Loans • Utah: $352 Million -- Fifth Largest UI Trust Fund Account (after Washington, Oregon, Louisiana and Mississippi) Source: National Conference of State Legislatures Utah#15Utah UI Fund Solvency Estimates ⚫ May 2010: Utah's UI Fund would be insolvent in Fall 2011 (Dept. of Workforce Services) Latest estimate: January 2013#16Summary • Selected Current Employment Figures - • UI Trust Fund – Background, How it Works • Utah's UI Trust Fund - Current Status, Trends - - Latest Estimates of Trust Fund Levels, Solvency#17Questions? Art Hunsaker Policy Analyst Office of Legislative Research and General Counsel (801) 538-1032