On Wednesday, the Washington State Department of Labor and Industries announced its recommendation to lower workers’ comp rates in 2018 by 2.5 percent. The decrease is an opportunity for chest-thumping; the challenge is to separate the wheat from the political ballyhooing.
A proposed decrease in the amount Washington employers pay for workers’ compensation insurance teases out a broader question: Are rates falling because of a statewide decline in logging and a shrinking manufacturing sector or because of improved workplace safety and government efforts to help injured workers rebound quickly?
The answer depends on where you sit.
On Wednesday, the Washington State Department of Labor and Industries announced its recommendation to lower workers’ comp rates in 2018 by 2.5 percent, a move that will save employers $67 million in premiums, according to the department.
The decrease is a cause for celebration; the challenge is to separate the wheat from the political ballyhooing.
L&I is more responsive now, offering help and vocational support earlier in the claims process, it says. The department’s Stay at Work Program could be helping with outcomes, offering employers $58 million to “help keep more than 25,000 workers on light duty while they heal.”
Tim Church, an L&I spokesperson, checked and said that he didn’t have any information to tie a decrease in manufacturing to lower rates. So nonempirical speculation is just that.
“These and other workplace safety and health improvements have allowed us to build our reserves, while at the same time propose a cut to the average premium rate employers and workers pay,” said L&I Director Joel Sacks. “It’s a win win.”
The captains of industry are amenable to “win-win.” For years, employers have chafed at Washington’s cumbersome workers’ compensation system, a program that underwrites medical treatment for injured workers in addition to providing disability and wage benefits.
“Washington’s workers’ compensation system remains one of the most expensive and administratively complex in the nation, so any reduction in the rate is welcome,” said Kris Johnson, president of the Association of Washington Business. AWB still complains that cost-saving reforms dating back to 2011 haven’t yielded all of the promised results.
But other forces, some more difficult to quantify, could be contributing to the downward trend in workplace injuries. A sign outside of the Kimberly-Clark mill on Everett’s waterfront once highlighted the number of days since the last on-site injury. The display resembled a minor-league baseball scoreboard.
But the sign, along with the mill and all of its family-wage jobs, is gone now. Globalization and the rise of the information economy left its mark. The economy has shifted, along with the number of dangerous, blue-collar jobs.
The good news on workers’ compensation is also an incentive to bring together the public sector and business organizations such as the AWB. Employers and government need to work in common cause to lower costs and, ideally, spur more growth.
No one will accurately trace the paternity of the workers-comp rate drop. As John F. Kennedy said, success has a thousand fathers.