Washington’s average annual wage grew by 10.1% in 2020 to $76,741, according to the state Employment Security Department—representing the largest percentage increase in the average annual wage year over year on record.

The average annual wage is calculated only using wages from those in the workforce that are covered by unemployment insurance. The average weekly wage rose from $1,340 in 2019 to $1,475 in 2020.

The increase was driven by a 4.9% decrease in covered employment and a 4.7% increase in total earnings, which grew by nearly $10.9 billion in 2020. Overall, the average number of workers in Washington covered by unemployment insurance decreased by just over 164,161 workers in 2020.

The higher-than-normal increase in reported average wages can be attributed to the fact that thousands of lower-paid workers lost their jobs during the pandemic and higher-paid workers remained employed. While it is common for the average wage to rise during recessions, since lower-wage workers are more likely to be laid off than higher paid ones, the shift during the pandemic recession was much more dramatic than during the Great Recession.

In 2020, while there was an historic loss of jobs in accommodation and food services — one of the lowest wage industries — at the same time, higher paid professionals were able to work remotely from home and therefore experienced relatively few layoffs.

The industries with the largest average wage growth in 2020 were in information, up 16.9%; retail trade, up 14.6%; and arts, entertainment and recreation sector, up 14.3%.

The average annual wage is used to calculate unemployment benefits for jobless workers and paid family and medical leave benefits. The minimum weekly unemployment benefit, calculated at 20% of the average weekly wage, will increase by $94 to $295, for new claims opened on or after July 4t. At the same time, the maximum weekly benefit, which is the greater of $496 or 63 percent of the average weekly wage, will increase by $85 to $929.

Currently, about 17% of unemployment insurance claims are paid the maximum benefit amount, and 17% receive the minimum.

In addition to unemployment and paid leave benefits, the average annual wage is used in computing employers’ unemployment taxes. Beginning in 2022, employers will pay unemployment taxes on the first $62,500 paid to each employee—up from $56,500 in 2021.

The state average wage also is used by the Department of Labor & Industries in calculating worker’s compensation benefits.