The Fourth Corner: Labor & Industries By Rep. Doug Ericksen
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Creating jobs begins with real reform at the state level:
When we buy auto insurance, there are a lot of options. This healthy competition provides us with better products to choose from and lower costs.
Employers in Washington are not as fortunate when it comes to workers’ compensation insurance. They only have one option – a state-run system operated by the Department of Labor and Industries (L&I). We need to end this government monopoly and allow the private sector to offer this product to employers.
Back in my football days we used to say, “The eye in the sky doesn’t lie.” The eye in the sky was game film. Regardless of how good we thought we were, the camera always revealed the truth.
A TVW camera revealed the truth when, at a recent Greater Spokane Incorporated legislative forum, House Speaker Frank Chopp praised Washington’s failing workers’ compensation system. As one of the panelists, I felt terrible for the stunned business leaders in attendance. Speaker Chopp made it clear he is going to fiercely defend the status quo.
The problem with this business-as-usual approach is it is destroying our economy. Our workers’ compensation system is just one example of how the state is failing to address the needs of employers.
Unfortunately, the news is getting worse for employers that are already contemplating layoffs and closings. At a time when a majority of states are cutting workers’ compensation premiums, L&I is increasing premiums by an average of 7.6 percent in 2010. This is paid for by employers and their employees. Unemployment insurance premiums, another system with problems, will also increase for 170,000 employers in our state in 2010.
L&I has shown no interest in meaningful reform. Its approach has been to raise premiums, avoid comprehensive reviews of policies and expenses, and ignore tough questions. For example, why is it the average Washington worker who receives workers’ compensation benefits misses 257 days of work, which is nearly three times the national average? In comparison, Oregon’s average is 70 days.
Employers are not to blame. In fact, they have made workplaces safer. Despite significant increases in population, the number of workers’ compensation claims has dropped by 55 percent since 1990. Meanwhile, premiums have increased by more than 40 percent over the last five years. This suggests an inefficient system.
It is time for real reform in our workers’ compensation system. Step one is to freeze premiums immediately. This would give employers some financial certainty in 2010.
Step two is to pass a bill in the 2010 legislative session that would eliminate the state-run monopoly on workers’ compensation insurance, and allow competition and choice for employers. I have introduced legislation that would accomplish this goal.
Other states that have enacted real reform in their workers’ compensation systems, such as privatization, have experienced lower costs. In West Virginia, a state that privatized its system in 2006, premiums have dropped by 30.3 percent.
This is about more than just helping employers and creating jobs. It is about prioritizing state government. Every minute and dollar the state spends on running an insurance company is time and resources taken away from the priorities of education, public safety and protection of our most vulnerable citizens. It is also about the best use of your tax dollars.
We cannot sit idle as employers – from mom and pop stores to the Boeing Company – close shop or leave our state. Our state is full of entrepreneurs and hard-working business leaders who need government barriers knocked down. They are not looking for handouts or bailouts – they are looking for fairness. Our state can start by providing a fair and affordable workers’ compensation system.
State Representative Doug Ericksen represents the 42nd Legislative District. He can be contacted at ericksen.doug@leg.wa.gov or (360) 786-7980
For a Washington State Auditor Office report (December 31, 2009) on the state’s workers’ compensation insurance system, visit here:
For workers’ compensation insurance information from the Washington State Department of Labor and Industries, visit here:
To see what other states are doing with their workers’ compensation insurance systems, visit here:
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