The state average annual wage was $82,508 in 2021—7.5% higher than 2020’s average wage. In 2020, the average wage had increased by 10.1%, which is the largest increase ever. The increase in 2021 is the second largest, according to the Employment Security Department (ESD). (ESD emailed this information out this morning but the news release has not yet been posted to the ESD website. I’ll link to it when it is posted. Update: The news release is now available here.)

ESD attributed the large increase in 2020 to pandemic job losses among lower-paid workers. Because higher-paid workers kept their jobs, their higher wages brought up the average.

ESD writes that the continued high growth in 2021 was the result of “strong demand for workers and hiring difficulties across different sectors.” Further, “The greatest wage growth occurred in industry sectors with large numbers of lower-wage workers.” For example, the average wage for leisure and hospitality increased by 14.2%.

The increase in the state average wage matters for several state programs. The state average wage is used to calculate unemployment insurance (UI) taxes and benefits, paid family and medical leave benefits, and workers’ compensation benefits.

Given the 2021 average wage, the UI taxable wage base in CY 2023 will increase from $62,500 to $67,600. Employers in Washington will pay UI taxes on the first $67,600 paid to an employee. (Washington’s taxable wage base is consistently the highest in the country.)

For new UI claims filed on or after July 3, 2022, the minimum weekly benefit will increase from $295 to $317, and the maximum weekly benefit will increase from $929 to $999.

For paid family leave claims filed on or after Jan. 1, 2023, the maximum weekly benefit will increase from $1,375 to $1,427.

The Department of Labor & Industries has not yet announced the updated workers’ compensation time-loss and pension benefit amounts.