Washington businesses will save $89 million next year due to lower unemployment and workers’ compensation premiums approved this year by Gov. Chris Gregoire and the state legislature. Now Gov. Gregoire is proposing a six-month suspension of a portion of workers’ compensation premiums that could save employers and workers an additional $315 million.
The rate reductions and suspensions are made possible by higher than expected investment earnings on premiums, and L&I’s success at controlling health care costs. Workers have also filed fewer workplace injury claims.
This is great news for both employers and workers. A typical building contractor employing 25 full-time workers would save about $22,000 over the six-month suspension, a vegetable farmer with a similar sized work force about $5,300. And workers who have premiums deducted from their paycheck will also see substantial savings: $267 for an agricultural worker, $378 for food processing and manufacturing, $153 per health care worker.
You’d think such a win-win proposal would elicit cheers from business groups like, say, the Building Industry Association of Washington (BIAW), but so far… crickets. One reason for their silence I suppose is that when state government actually works efficiently and saves their members money, well, they lose their favorite rhetorical stalking horse. Another reason, just perhaps, is that these lower workers’ comp premiums actually cost the BIAW money.
See, the pro-business/anti-government BIAW earns most of its money managing a workers’ comp “retro rebate” program, in which it pools members premiums to spread out risk, and then earns a rebate from the state for filing fewer claims than anticipated. BIAW members get this money back, minus the twenty-percent the BIAW skims off the top to support its “operations”… operations which mostly consist of spending millions of dollars supporting right-wing judges, politicians and initiatives.
But if due to greater efficiency on the part of the state, businesses and workers pay lower premiums going in, they’ll get lower rebates coming back, and that means the BIAW will have lower revenues. And thus, less money to spend on politics.
I’d call that a win-win-win.