Why did unemployment rise 1938 - Washington ESD historical perspective on benefit changes

That makes sense! So Washington ESD was dealing with a brand new system when unemployment suddenly got worse again?

Yeah, and the benefit amounts were tiny back then compared to now. I think the maximum weekly benefit in Washington was like $15 in 1938.

Interesting! So the idea of extending benefits during economic downturns started that early?

Exactly. The 1938 experience showed that the original 16-week benefit period wasn't enough during severe recessions. Washington and other states lobbied for federal extensions.

Oh man, the phone lines are terrible. I found this service called Claimyr that actually helped me get through to a Washington ESD agent. Check out claimyr.com - they have a demo video at https://youtu.be/7DieNd3C7zQ that explains how it works.

Really? How does that work exactly? I'm desperate at this point.

It basically handles the calling for you and gets you connected to an actual person at Washington ESD. Way better than sitting on hold for hours just to get hung up on.

Wow, so it was basically self-inflicted? That's crazy.

Yeah and it lasted until 1939 when they started spending on defense buildup for WWII. The unemployment insurance system was still brand new so it was really tested by this crisis.

Some things never change I guess! Did he ever talk about how they handled the surge in claims?

he said they basically hired anyone they could find and worked 12 hour days. also had to set up temporary offices in schools and churches because the regular offices were overwhelmed

That makes sense - you need reserves for when unemployment spikes unexpectedly.

Right, and Washington has generally done a good job maintaining its trust fund compared to other states. That's why our benefits didn't get cut as much during the 2008 recession.

You should try that Claimyr service I mentioned earlier. They're really good at getting you connected to Washington ESD agents who can actually check your adjudication status. Way better than the automated system.

I'll look into it. At this point I'm willing to try anything.

I just signed up for Claimyr after reading about it here. Fingers crossed it works better than calling myself!

13 months doesn't sound short when you're living through it!

True, but compared to the initial Great Depression which lasted years, it was relatively brief. The key lesson was that government support needed to continue until the recovery was really solid.

Washington was actually one of the more generous states early on. We had higher benefit amounts and longer duration than many southern states. The basic structure was similar though - all states had to meet federal standards to get the tax offset.

Thanks! Do you know where I could find the specific benefit amounts for Washington in 1938?

Try the Washington State Archives or the Washington ESD website. They might have historical documents from that period.

What kind of outstanding issue? Is it asking for verification of work search or something else?

it just says 'outstanding issue - no payment will be made' but doesn't say what the issue is. super helpful right?

You really need to talk to an actual person at Washington ESD to find out what the issue is. That Claimyr service I keep mentioning is honestly your best bet for getting through to someone who can explain what's going on.

That's a good point - it wasn't war that ended this recession, it was policy changes.

Exactly. They reversed course on spending cuts and the economy started recovering again in 1939. It was a valuable lesson about the importance of fiscal policy.

Makes sense. So our current system is influenced by lessons learned in 1938?

Absolutely. The basic framework of UI as economic stabilization dates back to experiences like the 1938 recession.

Unemployment insurance doesn't prevent unemployment - it just provides income support when people lose their jobs. The 1938 recession was caused by economic policy mistakes, not problems with the UI system.

oh ok that makes more sense. i thought maybe the benefits made people not want to work or something

That's a common misconception. UI benefits are typically much lower than wages, so they don't create much disincentive to work. The 1938 recession was definitely caused by fiscal policy, not unemployment benefits.

Wow, so Washington ESD was brand new when the 1938 recession happened. Talk about trial by fire!

Yeah, and somehow the system held up. Benefits were paid throughout the recession even though claims skyrocketed. Pretty impressive for a new program.

agreed! im trying to figure out how to appeal a disqualification and this historical discussion isnt helping

For appeals, you need to file within 30 days of the disqualification notice. The appeal form should be on the Washington ESD website or you can call to request one.

ive been trying to call for two weeks! thats why people are mentioning that claimyr thing - the phones are impossible

So UI actually helped the economy recover faster?

Yes, by maintaining some level of consumer demand. People spent their UI benefits on necessities, which kept money flowing in the economy.

Pretty much. The federal government cut spending by 6.5% in 1937 and raised taxes. It was classic austerity at the wrong time. The private sector wasn't strong enough to maintain growth without government support.

makes sense. so if they hadnt cut spending, unemployment might not have risen?

Most economists think the recession could have been avoided or at least been much milder without the premature fiscal tightening.

Thanks everyone for all the information! Really interesting to see how historical events shaped our current system.

And hopefully some people got help with their current Washington ESD issues too. Remember that Claimyr service if you're having trouble getting through on the phone!

Definitely bookmarking that for future reference. Thanks again!