A large decrease — roughly two-thirds — in the number of initial claims for unemployment filed during the week of May 17-23 is suspected to be mostly caused by significant fraud prevention measures put in place over the last two weeks by the state Employment Security Department.
Those measures were put in place after ESD acknowledged “hundreds of millions” of dollars had been lost to fraud, possibly led by a Nigerian crime ring.
Initial claims statewide the week before topped 138,733, but the state department saw a 65-percent decrease over the next week when a total 48,445 initial claims were filed.
This week’s numbers on initial claims are the lowest since efforts to slow the coronavirus halted much of the state’s economic activity in March.
Locally, Thurston County saw a 66-percent decrease in the number of new claims filed with the state department from the week before. Numbers decreased from 5,293 claims the week prior to 1,764 the week of May 17-23.
Unemployment in the county is believed to be at about 14.9 percent for the month of April.
Throughout the ongoing coronavirus crisis, which has resulted in state-mandated closures of businesses over the last two months, Employment Security has been largely overwhelmed by large numbers of fraudulent claims, which has led to a massive expansion of its fraud detection services.
Over the last couple weeks, the state has been working to crack down on these fraudulent cases, the most notable being the Nigerian fraud ring that filed thousands of unemployment claims with the state agencies and likely siphoned hundreds of millions of dollars by the time the holes were patched, according to Commissioner Suzi LeVine.
LeVine has said the state plans on working with federal law enforcement in an attempt to recover the funds and track down the source.
“The dramatic decline in initial claims this week is a strong signal that the additional steps we are taking to address imposter fraud are working. We’ve already recovered and stopped the payments of hundreds of millions of dollars in fraudulent claims in the past two weeks, and we will continue to reclaim every dollar we can,” LeVine said.
It’s not currently clear to what extent the state’s increased fraud detection impacted the declines of claims both on the county and state levels.
During the week of May 17-23, Employment Security paid out more than $494.5 million to 424,995 individual claims statewide. More than 1.49 million claims were filed that week.
Since the start of COVID-19 job losses in early March, Employment Security has processed nearly 2 million initial claims for unemployment. The department has paid out a total $4.7 billion in benefits.
Thurston County was recently approved for phase 2 variance in Gov. Jay Inslee’s four-phased “Safe Start” plan, which allows certain businesses and restaurants to reopen on a limited basis to maintain social distancing efforts.
Despite the move, local and smaller businesses are still feeling sharp pains due to the ongoing blanketed closures.
Industries in Thurston County with the highest number of initial claims the week of May 17-23 include specialty trade contractors, credit intermediation and related services, professional and technical services, administrative and support services, educational services, ambulatory health care services, hospitals, social assistance, food services and drinking establishments, and public administration.