The Employment Security Department (ESD) reports that the state average annual wage was $84,167 in 2022. That is just 2.0% higher than the 2021 average wage. In 2020 and 2021, there were record high increases in the average wage (see the chart below).

According to ESD, the growth in the average wage slowed because “[a] greater percentage of workers gained employment in 2022 relative to the average wage increase. This helped push down the average wage-per-worker ratio.” Additionally, “The information industry, which contains a significant number of tech businesses, paid out less wages overall in 2022.” (The lower compensation in the information sector also contributed to the drop in collections from Seattle’s payroll expense tax in 2022, as we discussed in a new policy brief earlier this week.)

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

Consequently, the UI taxable wage base will increase from $67,600 to $68,500 in CY 2024. Washington employers will pay UI taxes on the first $68,500 paid to an employee. (Washington’s taxable wage base is the highest in the country.)

For new UI claims filed on or after July 2, 2023, the minimum weekly UI benefit will increase from $317 to $323, and the maximum weekly benefit will increase from $999 to $1,1091,019.

For paid family and medical leave (PFML) claims filed on or after Jan. 1, 2024, the maximum benefit will increase from $1,427 to $1,456. (The slower growth in the state average wage should help reduce some pressure on the PFML program. As we noted in our report about the program’s cash deficits, one issue has been that benefits paid are higher than projected before the program began. The historically high increases in the state average wage over the past few years contributed to the high amount of PFML benefits paid.)

Finally, the Department of Labor & Industries has not yet announced the updated workers’ compensation time-loss and pension benefit amounts, but they will increase by 2.0% as well.