Tuesday, August 13, 2013

Comp Drives Business Out?! PUHLEEZE

Two things in this morning's WorkCompCentral news that, in my opinion, demonstrate what a political scapegoat of a red-herring workers' compensation is to legislators who pander to special interests, be it business, labor, medicine or whom-ever.

It was disclosed that in Texas, where workers' compensation is optional, the Workers' Defense Project pushed for Apple to require the builders of its new $300 million facility to obtain workers' compensation coverage as part of the group's general stance that construction workers tend to fare better under Texas' workers' compensation system than under nonsubscriber plans.

Emily Timm, policy director for the group, told WorkCompCentral that the project has successfully negotiated with other employers to obtain workers' compensation coverage for their construction projects, too.

"Most of the construction industry in Texas does not have regular health insurance," Timm said. "Without workers' comp and without health insurance, you have absolutely no insurance provider to pay for medical bills, which means the family ends up with them or - what is very common - is that the hospitals that provide emergency care end up with large, uncompensated care costs."

Apparently Apple does not see the cost of workers' compensation as being an impediment to its expansion into Texas. Maybe that's because Apple is a California corporation and used to high workers' compensation bills. But that's another story.

Or, maybe the cost of workers' compensation to Apple is like the proverbial pimple...

And apparently neither does Boeing see the cost of workers' compensation in California as an impediment to relocating about 375 engineers who work on modifications, such as performance upgrades, interior refinishing and passenger jet-to-freighter conversions, from Puget Sound, WA to Long Beach, CA.

Much to my amusement, Sen. Rodney Tom, a Democrat from Medina, WA and leader of the bipartisan Majority Coalition Caucus, issued a statement following Boeing’s announcement that said the inability of the Legislature to “control labor negotiations” is driving Boeing out of the state.

“Instead of taking action, we allow common sense workers’ compensation reform to languish – reform which would have saved both workers and the company money,” Tom said in his statement.

In the last Oregon Dept. of Labor study, Washington ranked 13th in workers' compensation costs, compared to California's third ranking. Apparently Tom didn't review the Oregon survey before engaging the propaganda machine.

Said former Washington state Rep. Brendan Williams, a Democrat who held office from 2005 to 2011, in an opinion-editorial published in the Everett Herald:

“Trying to understand why a multi-national corporation does things is not easy,” Williams wrote. “Washington’s workers’ compensation costs are considerably below California’s, which were the third-highest in the nation in 2012. We ranked 13th, with the employer burden even less given we are the nation’s only state requiring workers themselves to pay a share of premium costs.”

Everyone talks about a "broken system." Everyone talks about "reform." Everyone has an answer that generally means they want some special treatment (for example the NFL's professional athlete's jurisdiction restriction campaign across the nation).

What it all really comes down to is one simple fact that we, as professionals in the industry, need to come to grips with lest we drive ourselves crazy: workers' compensation is a political construct that uses legal fiction to obfuscate medical science to underwrite a financial proposition.

What this means is that workers' compensation only becomes an issue when some interest is seeking some special advantage, usually financial. Otherwise, in the grand scheme of things, it is just another expense that gets passed through to the ultimate consumer.

By the way, I'm not saying this is bad. It is just reality and without this reality none of us would have careers in workers' compensation.

Or, as I often tell my employees, "now, get back to work!" You know what to do...

1 comment:

  1. David,

    Workers' compensation is rarely the deciding factor in where jobs are created. It is just one of a myriad of considerations businesses ponder. More often than not personal preferences carry more weight in the decision making process.
    That said, work comp not a factor, PUHLEEZE.
    (My apologies, I am weak willed and just couldn't resist.)
    Your examples in this piece are not exactly typical, for all that they are illustrative. Apple's willingness to require workers' comp coverage in construction of its new facility is undoubtedly a "pimple". While it is common in Texas for construction and trades to be non-subscribers it is also common for large employers to require comp coverage for their projects. As to Boeing's transfer of engineering jobs from Washington to California it is unlikely comp was even a pimple. I have to agree Sen. Tom's statement is amusing.
    Personally I also agree California's system is worse than Washington's. I just don't think it was a consideration for Boeing in this case.
    Over the past ten years or so most workers' comp reform legislation has been driven by the perception (whether well founded or not) that the system was not working and business was so unhappy they were either expanding or moving entirely out of the jurisdiction. As a union business agent once told me, in cases like this, "perception is reality".
    Those of us in the workers' comp business tend to think business decision makers get as excited as we do about these things. Mostly they don't.
    As you remind us system participants can be counted on to enthusiastically support their interests. Workers' compensation is a century old concept which has been stretched, twisted and tweaked (in some areas almost beyond recognition) mostly by those with something to gain. At the core it is still about employees and employers.