Number of the Week: Businesses’ Unemployment Taxes Rise

37%: The rise in businesses’ unemployment-insurance payments in 2010.

The sheer depth and duration of the U.S. job-market slump has created all sorts of unique problems for the economy. Now, it’s hitting businesses in a new way, through the taxes they pay to support unemployment insurance.

In 2010, the amount employers paid into state unemployment-insurance funds rose 34% as a share of total wages, the Labor Department estimates. Total wages also rose a bit, so the sum private businesses paid out increased some 37%, to about $43 billion, data from the Commerce Department suggest. The payments are small as a share of total wages, amounting to less than 1%. But that can represent a much bigger chunk of profits.

The boost in businesses’ tax bill has two main sources: Businesses automatically pay more when the ratio of laid-off to employed workers rises, and states are cranking up tax rates to replenish unemployment-insurance funds. Those mechanisms are typically designed to kick in with a large lag, so they shouldn’t hit businesses when they’re down. But the current slump has lasted so long that the tax increases are coming at a time when many businesses are still struggling to recover.

Even with the higher tax payments, states’ insurance funds are falling deeper into the hole as they pay out benefits to millions of unemployed, often with money borrowed from the federal government. The Office of Management and Budget estimates that by 2013, state unemployment trust funds will be about $90 billion in debt, up from about $3 billion at the end of the 2009 fiscal year. So businesses should expect the tax bill to keep rising.