Immigration, Obama and Bloggers

Tomorrow legions of workers' compensation professionals will descend upon Las Vegas for the annual Bacchanalia commonly known as the National Workers' Compensation and Disability Conference at the Mandalay Hotel.

Of course I'll be there, part of the popular Blogger's Panel in which we debate the workers' compensation issues of the day.

On Thursday at 3:45 p.m. Joe Paduda, Becki Schaffer, Bob Wilson, and I will field questions from Mark Walls.

Walls decided to prime the pump yesterday by sparking interest in President Obama's announcement that he is considering amnesty to undocumented workers by executive order.

"If President Obama makes 5 million illegal aliens legal by executive order, what impact positive or negative could this have on the workers comp industry?" Walls wrote to the group.

This started off a firestorm with Paduda and Wilson trading barbs at each other all day long by group email.

Great Mark, thanks for getting these guys fired up!

Schaffer threw up a graphic demonstrating that incurred losses would go out of control, at least for a year or two, based on statistics from when President Ronald Reagan pushed for immigration reform back in 1986.

Schaffer's graphic

In 1986, Congress and Reagan enacted a sweeping overhaul that gave legal status to up to 3 million undocumented immigrants, if they had come to the U.S. before 1982. Spouses and children who could not meet that test did not qualify.

This segregation incited protests that the new law was breaking up families.

Early efforts in Congress to amend the law to cover family members failed. In 1987, Reagan's Immigration and Naturalization Service commissioner announced that minor children of parents granted amnesty by the law would get protection from deportation.

Spouses and children of couples in which one parent qualified for amnesty but the other did not remained subject to deportation, leading to efforts to amend the 1986 law.

Likewise, the Senate acted in 1989 to broaden legal status to families but the House never took up the bill. Through the Immigration and Naturalization Service, Bush advanced a new "family fairness" policy that put in place the Senate measure. Congress passed the policy into law by the end of the year as part of broader immigration legislation.

Obama's anticipated executive order could come as early as this coming week and cover as many as 5 million people. Like Bush, Obama is expected to extend deportation protections to families of U.S. citizens or permanent residents.

Whether or not there is any big impact on workers' compensation is, of course, subject to debate. Paduda argued to the group that there would be no great impact and that the nation's immigration policy was a waste of money - that funds presently used to support a massive presence at the borders was better put to use on real criminal enforcement.

Wilson argued that there are laws in place for a reason and that Obama was being arrogant and had no legal authority to declare 5 million people "legal" by his fiat.

Separately, Peter Rousmaniere, not on this upcoming blogger panel but one who also has a distinct opinion on immigration, feels that there may be a slight up tick in claims because these workers tend to occupy the most injury prone jobs.

"This may happen in earnest in selected situations, where undocumented workers have reported relatively few of their injuries and now feel empowered to file claims, with claimant bar and activist group encouragement," Rousmaniere writes in a WorkCompCentral column (free to all). "For the workers' compensation field as a whole, the impact could be modest. Even if the number of lost-time compensable claims of undocumented workers increased by 50%, the total increase of such claims in the workers' comp field would be, I expect, a couple of percentage points, spread over several years."

The reason, Rousmaniere notes, is because, "Among the largest 100 jobs, undocumented workers account for about 4.5% of all workers. Because they tend to hold more injury-prone jobs, they likely incur about 8% of lost-time compensable injuries – or would if they filed claims at the same rate as authorized workers do."

As with any big issue the questions and the answers are not so clear and easily established. There will be winners and there will be losers.

Potential winners in this program, at least in the short term, are the insurance companies that should see increased premiums as a result of increased payroll reporting; that is assuming that the employers which traditionally tend to skirt employment laws actually comply when their workers are no longer "undocumented" and because, experience has taught us, once these workers become "documented" and, ergo, "legal" their wages tend to increase.

In addition, the industries in which the most undocumented workers are found are among the highest in occupational risks: farming, construction, hospitality, and institutional (building and grounds maintenance). Those occupational codes rate much higher and thus produce much larger premiums.

My best guess is that there isn't going to be any great impact on workers' compensation overall, that the industry will move along like it nearly always does with the various parts doing what they do best, California will be most heavily impacted (because it has, by far the largest immigrant population employed in the most hazardous occupations) and there will be some scapegoat identified somewhere upon whom we can foist collective discontent.

Come to the Bloggers' Panel Thursday at 3:45 to get more of this barb tossing (breakout session CM6).