Washington state's new workers' comp law hurts those already in pain
Gov. Gregoire joined Republicans and quite a few Democrats to create a system that transfers money to businesses, at the expense of injured workers and the surviving relatives of workers who are killed.
You'd be hard-pressed to find a better example of "kick-em when they're down" politics this year than the workers' compensation legislation rushed through Olympia on Monday (May 23). By the governor’s own estimate, the bill will take about $1 billion that injured workers would have received over the next five years, and give it to their employers instead.
Washington was the first state in the nation to create a workers' compensation program. Legislators acted at the behest of businesses that feared being sued by injured workers or by their survivors if they were killed in industrial accidents.
This was the bargain: Workers gave up the right to sue their employers for workplace injuries; in exchange, employers participated in a compensation program to give workers some measure of dignity after sustaining injuries and illnesses at their workplaces.
One of the good things about Washington’s workers' compensation system is that it keeps private insurance companies out. They can't profit from injured workers, because we have a state system. As a result, costs to employers are among the bottom third for states, while benefits for workers are ranked third best in the country. Voters like it that way. Last November, the people drubbed Initiative 1082 (60 percent voted "no"), which would have given our workers’ compensation system over to private insurers.
But these benefits are hardly generous. For example, if you are married with one child, make $50,000 a year, and are permanently disabled from an on-the-job injury, you will receive $33,500 annually — not exactly big money. If your foot is cut off in an industrial accident, you will receive one-time compensation of $18,900. If you lose a leg "above the knee with short thigh stump," you will receive $54,000. If you are killed on the job, and your kids are grown up, your spouse will receive three-fifths of your wages. If you have a dependent child, your spouse will receive 62 percent of your wages.
After the 2010 explosion at the Tesoro refinery in Anacortes killed seven workers, the state levied a fine of $2.39 million for 39 willful violations of workplace safety and health regulations. That’s $341,428.57 for the life of each worker. Of course, Tesoro has appealed the fine. Tesoro’s profits in the first three months of this year? $107 million.
You might think that Olympia would decide it was time to treat injured workers with a little more respect and a little more compensation. But led by Gov. Chris Gregoire, the Senate and House passed legislation to decrease benefits for injured workers. Sure, the debate was around workers’ compensation "reform." That's how you make anything look good — you call it "reform."
But look at what the bill actually does, and you’ll see that it simply transfers money from workers who are injured on the job to their employers. What a deal! You get hurt, and some of the money that used to let you live with some dignity goes to the company where you were injured.
Other than the governor’s own $1 billion estimate, it’s hard to get a precise figure on how much money is being transferred from workers to employers – because unlike every other bill with financial impacts, this one did not even get a fiscal note. One immediate result is that injured workers will not get any cost-of-living adjustment this year that was previously due them.
Who helped the governor with this gift to business? Republicans of course, but, hey, they are just being honest about what they believe in and who pays for their elections. Democrats helped out, too.
Seattle voters rejected Initiative 1082, the attempt to enable private insurance companies to feed off of injured workers, by a 3-to-1 margin. In the 36th Legislative District (Magnolia, Queen Anne, Phinney Ridge) and 46th (Greenwood, Northgate, Lake City and Laurelhurst ), the vote was 73 percent in opposition. In the 43rd (Capitol Hill, University District, Madison Park, Washington Park, Broadmoor, Montlake, Wallingford, Madison Valley) and 37th (Rainier Valley, Madrona, North Beacon Hill, Rainier Beach, Mt. Baker, Leschi, Columbia City, southern Capitol Hill, Skyway), more than three out of four voters opposed I-1082.
So did Seattle legislators embrace the shrinking of injured workers’ benefits, in the guise of reform? Their ambivalence as a group says a lot about the muddle the Democrats are in.
State Reps. Mary Lou Dickerson, Joe Fitzgibbon, Bob Hasegawa, Zack Hudgins, Phyllis Kenney, and Sharon Tomiko Santos all sided with injured workers, as did state Sens. Adam Kline, Ed Murray, Sharon Nelson, and Scott White. They remembered their constituents. But too many Democratic legislators gave in to corporate demands to take benefits from injured workers. These included state Reps. Reuven Carlyle, Eileen Cody, David Frockt, Ruth Kagi, and Jamie Pedersen, joined by state Sen. Jeanne Kohl-Welles.
A handful of legislators actually spoke up for injured workers. In the House, Rep. Chris Reykdal (D-Olympia) led a lonely fight to allow workers and their survivors to sue companies in the event of workplace injury or death. This one amendment could have held Tesoro accountable for the deaths due to its refinery explosion. (State workers' compensation law generally forbids suits; families of six of the dead Tesoro workers, and one surviving contractor who was injured, filed suit in February, citing what their attorneys say is an exception in law for "deliberately" intended injury.) Reykdal's amendment would have made employers actually abide by laws protecting workers' health and safety, instead of flaunting them.
In the Senate, Karen Keiser (D-Des Moines), Steve Conway (D-Tacoma), Maralyn Chase (D-Shoreline), and Sharon Nelson (D-Maury Island) offered amendments to reduce the takeaways. Sen. Nelson’s suggestion that the new benefit design should provide no less than 85 percent of the old benefits was rebuffed. But it showed the nature of the beast of this legislation, punishing injured workers while moving more money to business.
These legislators, isolated in their own party, knew this was no reform. They understand that in a democracy the Legislature is supposed to advance the quality of life of the people who elect their representatives. On Monday, that American ideal was sacrificed in backroom corporate deal-making with the governor and her friends.
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Comments:
Posted Thu, May 26, 7:56 a.m. Inappropriate
If that's the case, then why is the expense of Washington's plan so frequently cited as one of the major disadvantages of doing business in this state?
Posted Thu, May 26, 8:28 a.m. Inappropriate
@dbreneman: Because the business lobbyists want costs to be even lower. Preferably zero. And they'll cite whatever stats or opinions they can to make their case, even though:
- A state-by-state comparison performed by the Oregon Department of Consumer and Business Services found employers’ costs for coverage in WA are the fifth lowest of any state in the nation.
- The Insurance Information Institute, Risk and Insurance magazine and a performance audit conducted for the state by an outside firm also found Washington to be a low-cost state while paying relatively high benefits.
- A.M. Best, which measures national insurance industry performance, found that total overhead costs for Washington’s public nonprofit system were about one-quarter of the national average.
Posted Thu, May 26, 9:22 a.m. Inappropriate
@ba FTW
Posted Thu, May 26, 3:17 p.m. Inappropriate
A few legislators display serious leadership under difficult circumstances, some failed
I-1082 and this first step in responsible workers' comp reform are far from the same thing.
Initiatives can be a dangerous way of implementing policy - the writer gets to put whatever they want into and can't participate in the meaningful push-pull dynamic that legislators can to get a good final product that can pass. The bill passed got to go through that legislative process.
Several legislators particular showed exceptional leadership in bringing two parties with diverse interests to the table to put together a package that will bring the workers' comp a step closer the sustainability and prevent massive hits to small businesses as they try to hire and expand.
Voting against the budget, one State Rep. even said, “I asked for a balance of revenue and cuts, this is all cuts. Unfortunately, this budget is too similar to what we’ve seen out of Washington, D.C. It cuts family planning, education, and the safety net.” While I'd love to support the idea of that statement, combined with a no vote all it does is show an inability to work with anyone to get anything done and shows a totally irresponsible outlook on how to serve the people of Washington while illustrating ignorance of the circumstances created by voters who supported an Eyman initiative.
Posted Thu, May 26, 9:50 p.m. Inappropriate
This is a polemic that has little to nothing to do with how the workmen's compensation system actually works, the parameters of voluntary settlement programs throughout the 50 states and what we in the legislature did, substantively, in this legislation.
Crosscut editors, please, can we add some symbol to stories on your site that indicates when a post is supposed to have some relation to reality (that old-style journalism that includes some research, fact checking and the like, analyzing the real world for the public at large)and this sort of completely fact-less editorializing?
The relationship between labor and business needs tension, yes, in order to balance interests overall. But the level of win/lose, high-stakes drama seen in recent years does not bode well for us in this state or region. We need for business, labor and the government to work in concert, finding ways to temper the challenges raised by a global, changing economy.
I just don't see how hte public interest is advanced by editorializing like this (and Crosscut's sanctioning of it) wherein our hard work to find a decent compromise is described thus: The "American ideal was sacrificed in backroom corporate deal-making with the governor and her friends." Shame on you, John Burbank. Shame on you.
Posted Fri, May 27, 7:21 a.m. Inappropriate
Dear Rep.Deb Eddy (debo):
I will not attack you personally like you attacked John Burbank, but as you know, I have as little regard for pathological centrism as I do for right-wing rapacity.
The business interests who pushed this bill, and the Democrats who enabled it, do not appear to care that workers who accept these settlements will be left high and dry, with no recourse, when the money runs out. Burbank gets that. All you appear to be interested in is finding some middle ground, apparently for its own sake, no matter how extreme one of the poles is.
Posted Fri, May 27, 8:09 a.m. Inappropriate
Ivan: Sorry, yet again, fact-free assumptions. The truth of the matter is that the settlement is voluntary, subject to rigorous criteria ... we took out any incentive to coerce (or even appear to be coercing) with numerous sideboards. And it is paternalistic to the max to think that dribbling pension payments out through a government program is ALWAYS the best choice for a worker's life; it is not.
Once I got into trying to understand this complex system, wading through one highly technical report after another, I started getting really irritated with the special interest groups who fuel the fire, us-versus-them, ranting about extremism and bad motives. That diminishes the very hard work done by many people this session, including some labor advocates, to find a solution. The VS program that we proposed would be a model for the entire country; I'm quite proud of that work.
Solving this country's problems will take more than polemics, Ivan. I'm going to be unrelenting in promoting problem-solving over hysteria. You and John are entitled to your extremism; I just don't have to accept it as helpful in working out what are tough issues. You want to call that "pathological centrism", you are entitled to it. I'm not sure how calling me "pathological" doesn't amount to a personal attack, but ... whatever.
Posted Fri, May 27, 9:12 a.m. Inappropriate
The assumption that there was a problem to solve is about as "fact-free" as it gets.
Posted Tue, May 31, 8:04 a.m. Inappropriate
The purpose of settlement agreements is to lower the number of people being awarded "permanent total disability" awards (pensions.) Why? Nearly 1800 people receive such awards in Washington, despite significant numbers of those people not being permanently and totally disabled (BTW, Oregon had 9 last year in comparison.) Instead, those people are awarded pensions because of where they live, a lack of education, or an inability to return to work at the job they had ... not because the injury itself is disabling. That doesn't mean they can't work. In fact, many DO return to work doing something, despite not being permanently and totally disabled. Labelling someone permanently and totally disabled when they aren't, doesn't help and isn't compassionate to the worker.
The so-called Oregon Study that Mr. Burbank touts is based on premiums paid, NOT on claims costs. Because our premiums are based on hours worked, rather than payroll, our boom times hid the true cost of our system. On total claims costs Washington is consistently in the top three most expensive states in the country [you can check the National Commission on Compensation Insurance, the National Council on Social Insurance, and other sources if you wish.] The fact is you can't have high benefits without high costs. You can artificially keep premiums low (for a time), but eventually it catches up with you when the economy tanks and the return on investments falls below the 15-20% a year we were getting. Voila! That's where Washington is today.
When the only two options (beyond return to work) in Washington's workers' comp system are to vocationally retrain someone or pension them, the result is more pensions. Settlement agreements (btw, they are VOLUNTARY) are a way to let workers receive fair compensation, and then go on with their lives without having to see if some investigator is looking over their shoulder every time they mow the lawn, play with the kids, or take a new job. They're eminently fair, honest, and they work in 44 other states. Only in Washington do you hear the whining and gnashing of teeth over something that's entirely voluntary. Only in Washington do you have labor and the trial lawyers treat injured workers as if they're stupid and can't make decisions for themselves. And only in Washington is the attitude that employers (you know, the ones who actually create and pay the family-wage jobs) are "getting too much."
Well, workers aren't stupid. They know their own interests far better than labor, trial lawyers or employers ever give them credit. It speaks volumes that even modest proposals get knee-jerk reactions from those whose real interest is maintaining control of a workers' compensation system stuck in the 1900's.
We are in a competitive economic environment. Employers need to be able to get a better handle on their employment costs if they are to hire or expand their hiring. Workers' compensation is one of those cost inputs. The bill that passed this year (EHB 2123) is a modest step forward, with many more protections for workers than exists anywhere in the country.
Posted Wed, Jun 1, 8:13 p.m. Inappropriate
Excellent summary!! Thank you so much for the best 500-word treatment of this issue that I've seen, to date. And clearly deserving of a crosscut shout-out.
I didn't know much about the workmen's compensation system before I started working on the question of whether we could come up with a better version of SB5566, the bill sent over from the Senate. Thank you so much for acknowledging the fact that the program described in EHB2123 contains more protections for workers than anywhere else in the country, all of which first surfaced in our bipartisan bill, HB 2109.
Rep Deb Eddy
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