Wednesday, July 02, 2003

Workers Comp Costs

Here is one more unpublished letter to the NY times by John F. Burton about the workers comp article that I wrote about here, here, here and here. Burton argues workers comp costs have actually only risen 14% or less over the past several years, and not the 50% quoted in the Times.
To the Editor:

Re "Cost of Insurance for Work Injuries Soars Across U.S." (news article, June 23):
The article provides examples of rapidly increasing workers' compensation insurance rates in California, which may be accurate. However, the assertion that nationally the average cost "has risen 50 percent in the last three years" must be used with caution.

The Bureau of Labor Statistics samples almost 7,000 private sector establishments nationally in order to prepare the Employment Cost Index. Employers' expenditures on workers' compensation in the private sector as a percent of payroll in March of the last four years were 2.02% in 2000, 1.92% in 2001, 1.96% in 2002, and 2.19% in 2003. By this measure, employers' costs have increased about 14% from the low point in 2001 to 2003. The increase would be even less for the three years since 2000. Moreover, the March 2003 figure is lower than for any year in the 1990s and is well below the peak of 2.99% reached in 1994.

These figures, provided to your reporter prior to publication, convey a different picture about the national developments in workers' compensation costs. Unfortunately, the impression conveyed by the article of runaway costs and vanishing employers provides inappropriate ammunition to proponents of workers' compensation "reforms" that reduce benefits and limit eligibility.

Sincerely yours,

John F. Burton, Jr.
Department of Labor Studies and Employment Relations
School of Management and Labor Relations
Rutgers: The State University of New Jersey

Burton is Chair of the Workers' Compensation Steering Committee of the National Academy of Social Insurance. He was Chairman of the National Commission on State Workmen's Compensation Laws, which submitted its report to the President and Congress in 1972.