The average annual wage in Washington state increased by 5.4 percent, to $42,584, from 2005 to 2006, according to the Employment Security Department.
Broken down by week, the average weekly wage went from $776 in 2005 to $818 in 2006. It is the largest spike since 1999, when the average wage rose by 8.4 percent.
"The wage growth is yet another sign of how strong our economy is, and the increase in unemployment benefits further reflects that strength," said Karen Lee, commissioner of the Employment Security Department.
Among other things, the average wage is used to compute unemployment-insurance benefits for jobless workers. Because of the increased average wage last year, the minimum and maximum unemployment benefits will go up next month.
The minimum weekly unemployment benefit, calculated at 15 percent of the average weekly wage of $818, will increase from $116 to $122 starting July 1. The maximum weekly benefit, calculated at 63 percent of the average weekly wage of $818, will increase from $496 to $515.
The benefit amount had been capped at $496 for most claimants since 2004. Since workers' actual benefits are based on their past earnings, only claimants receiving the lowest or highest benefit amounts will see an increase due to the new calculation. Currently, about 22 percent of claimants receive the maximum benefit amount and 5 percent receive the minimum.
In addition to unemployment benefits, the average annual wage is used in computing employers' unemployment taxes. Beginning Jan. 1, 2008, employers will pay unemployment taxes on the first $34,000 paid to each employee, up from $31,400 in 2007. In 2006, about 39 percent of employers in Washington had employees who were making more than $31,400 per year.
The state average wage also is used by the Department of Labor & Industries to calculate workers' compensation benefits.