In a state that just saw its unemployment rate bubble up to 9.2 percent, where jobs are easily lost, where economic recovery is excruciatingly slow, you would think it would not be a good time for the state to increase its tax on employment.

It isn’t, but it will.

It’s not something you will hear a lot about, even when it comes out of your paycheck. The state Department of Labor and Industries Monday announced its intention to increase workers’ compensation insurance premiums by an average 7.6 percent in 2010. You will pay part of it and your employer will pay part of it, but the money all comes from the same place. It is the money deducted from your pay for industrial insurance, to help if you are hurt or disabled on the job.

The hike only comes to a few cents an hour. It is, people are happy to note, much less than the projected 15- to 20-percent hike the state warned about a few weeks ago. But still, basic economics tells you if you want more of something, jobs in this case, do not tax it. Raise the cost of something and people will buy less, jobs in this case. The state is about to raise the price of employment by $120 million statewide. This is not good. The timing is exceptionally bad. The Department of Labor and Industries, which runs the workers’ compensation system, seems to recognize this.

“I know that any increase adds to the challenges that businesses and workers face in this tough economy,” said L&I Director Judy Schurke in a release. “We have pushed this proposed rate increase down to the lowest possible level given the uncertain state of our recovery from this deep recession.”

Yes, the timing is bad, but the choices few. The state’s industrial insurance fund has to stay solvent, and recent investment losses, medical inflation and other factors make a rate hike unavoidable.

That did not keep the inbox from filling up soon after L&I’s announcement. The state’s workers’ comp system has been a sore point for business for decades. For labor unions it is a workers’ benefit to be protected. They have been arguing about it for years, and are not in agreement now.

Business says the system is costly for employers and employees, pays the most generous and long-lasting benefits in the country and can’t seem to keep its expenses under control. It is a rare state monopoly. Rates have risen three years in a row and 53 percent in a decade, even while the number of claims drops, even while premiums in neighboring states with private policy options are stable.

Rep. Cary Condotta, R-East Wenatchee, the ranking Republican on the House Commerce and Labor Committee, issued a dramatic statement. “An increase in workers’ compensation taxes, as was announced today, will push my business to the brink.” A rising tax on wages for mandatory benefits is a “job killer,” he said. “No matter when the recovery comes, the more the state piles on increased costs and taxes, the worse our unemployment outlook will be. After 27 years in business I am downsizing my company, and even if the economy recovers I will likely never expand again because of the increasing burdens the state is placing on employers.”

Business wants the system reformed. The Washington State Labor Council, however, issued its own release, President Rick Bender saying Washington’s is one of the best and least costly workers’ comp systems in the nation, and it should stay that way.

The debate goes on, among Olympia’s hardy perennials. Someday it may change, but for workers it will be as it is with all creeping payroll taxes — close your eyes and pretend you’re not the one who pays.

Correction: Rufus Woods’ column Friday had an incorrect date for the Wenatchee Valley Transportation Council’s open house to discuss options to improve North Wenatchee Avenue. The meeting will be held this Wednesday, 3 to 7 p.m. at Town Toyota Center.

Tracy Warner’s column appears Tuesday through Friday. He can be reached at warner@wenworld.com or 665-1163.