By Doug Porter
A study released today by the Center for Economic and Policy Research (CEPR) makes the case that so-called reforms to workman’s compensation programs at the state level are tied to a rise of the number of workers receiving Social Security Disability Insurance (DI).
Over the past quarter century, the number of beneficiaries in this program has gone from 25 per thousand to 59 per thousand, bringing the DI trust fund close to depletion in 2015.
Republicans are claiming the rise in claimants for disability benefits is being fueled by lower-wage workers seeking an easy way out of the labor force. It’s just the latest wrinkle in the old “poor are shiftless and lazy meme” at the heart of so-called reform schemes.
Here’s the Economic Policy Institute’s Monique Morrissey:
Congressional Republicans are trying to block a routine reallocation of funds to the SSDI Trust Fund, insisting that they will only allow reallocation if “reforms” to SSDI are implemented. The intellectual underpinning for their demands is that there is an unfolding fiscal crisis caused by workers who are able to earn a living but are instead choosing to claim disability benefits.
A chief proponent of this view, Stanford economist Mark Duggan, testified before the Senate Budget Committee earlier this year, claiming that disability benefits are increasingly attractive to lower-wage workers, who respond by leaving the labor force. According to Duggan, a key piece of evidence supporting this claim is an increase in the share of beneficiaries suffering from musculoskeletal disorders and other “subjective” health conditions who have a “substantial” employment potential.
Claims like these have become a mainstay of attacks on the disability program. However, a closer look at the evidence shows that SSDI benefits have become, if anything, less generous. Moreover, even research cited by critics shows SSDI receipt has a negligible impact on work effort because few applicants, including marginal applicants who were denied benefits, are able to earn a living afterward. Meanwhile, there are good explanations for the increase in the share of beneficiaries suffering from musculoskeletal disorders, including an aging population, rising obesity rates, and fewer workers able to retire early when their health deteriorates.
And, of course, the GOP’s solution to this problem is to raise the bar so that benefits are denied to as many people as possible.
Privatizing Profit, Socializing Risk
A summary from CEPR outlines the findings of researchers Dean Baker and Nick Buffie, indicating that 20% of the rise can be attributed to the shifts in state legislation on workman’s comp:
Using data from the National Council on Compensation Insurance (NCCI), the National Academy of Social Insurance (NASI) and the Social Security Administration (SSA), Baker and Buffie explore the relationship between WC and DI. In the course of the report, the authors examine the correlation at the national and state level between the percent changes in WC benefits and new DI awards and the correlation between the change in the number of WC and DI beneficiaries with changes in state WC legislation.
The authors find:
- In a variety of specifications there is a strong relationship between the decline in state level WC beneficiaries and rise in new DI awards. This suggests that people are turning to DI because they are less able to collect WC benefits.
- A test of whether the rise in DI awards by state can be explained directly by policy changes to the state WC program found some evidence of a direct relationship. Given the difficulties in capturing the policy changes in the relevant variable, this is strongly suggestive that the rise in DI benefits was in part the result of state-level policy decisions to make the WC program less generous.
- These estimates suggest that more than one-fifth of the rise in the percentage of workers receiving DI awards can be explained by cuts to the WC program.
Opt Out Means Left Out for Injured Workers
In recent years 33 states have cut workers’ comp benefits, made it more difficult to qualify or given employers more control over medical care decisions. The most odious of these changes have taken place in states allowing privatized injury benefit plans. More than a dozen states are considering legislation allowing these “opt-out” plans.
An industry-sponsored lobbying group, the Association for Responsible Alternatives to Workers’ Compensation (ARAWC), and the American Legislative Exchange Council are seeking to make these privatized plans the law of the land in all 50 states.
From Mother Jones:
Laws mandating workers’ comp arose at the turn of the 20th century as a bargain between employees and employers: If a worker suffered an injury on the job, the employer would pay his medical bills and part of his wages while he recovered. In exchange, the worker gave up his right to sue for negligence.
ARAWC’s mission is to pass laws allowing private employers to opt out of the traditional workers’ compensation plans that almost every state requires businesses to carry. Employers that opt out would still be compelled to purchase workers’ comp plans. But they would be allowed to write their own rules governing when, for how long, and for which reasons an injured employee can access medical benefits and wages.
In recent years, companies have used that freedom to severely curtail long-standing benefits.
Abandoning the Principles of Workman’s Comp
The companies utilizing such plans make the claim that, in addition to saving money on costs, they’re now more ‘hands on’ in dealing with workplace injuries, which benefits workers. The devil, however, is in the details:
The fine print of opt-out plans contains dozens of opportunities for companies to deny benefits. Employers can terminate workers’ benefits for being late to doctors’ appointments, failing to check in with the company or even consulting their personal doctors.
One truck driver for a food and beer distributor complained in court documents that his direct supervisor accompanied him to medical appointments for his hernia — a requirement under the plan.
Some plans have restrictions that read like the terms of criminal probation. While they’re healing, injured workers at W. Silver, a steel products manufacturer in El Paso, are prohibited from leaving the area, even temporarily, or engaging in any “pleasure” that may delay recovery.
Sometimes the plans of PartnerSource and others abandon fundamental principles of workers’ comp.
For nearly 40 years, every state has covered occupational diseases and repetitive stress injuries, recognizing medical research that some conditions develop over time. But in Texas, a number of companies, including McDonald’s and the United Regional Health Care System, don’t cover cumulative trauma such as carpal tunnel. U.S. Foods, the country’s second largest food distributor, also doesn’t cover any sickness or disease “regardless of how contracted,” potentially allowing it to dodge work-related conditions such as heat stroke, chemical exposures or even cancer.
When workman’s compensation benefits are denied, people have little choice but to look elsewhere. Often it’s MediCal, Medicare or Social Security Disability paying the bills. What employers are doing amounts to shifting their costs on to the public.
Sen. Bernie Sanders Calls for an Investigation
The recent investigations by ProPublica and NPR have prompted ranking Democrats on key Senate and House committees to urge the Labor Department to look into these changes.
“State workers’ compensation laws are no longer providing adequate levels of support and compensation for workers injured on the job,” the lawmakers wrote. “The race to the bottom now appears to be nearly bottomless…”
The letter is signed by Bernie Sanders, the Democratic presidential hopeful and ranking minority member of the Senate Budget Committee, Patty Murray, D-Washington, the ranking member of the Senate Labor Committee, Bobby Scott, D-Virginia, the ranking member of the House Workforce Committee, and seven other senior Democrats on House and Senate Budget, Finance, Employment, Workforce, Ways and Means, and Social Security Committees.
In a statement, the Labor Department said the agency “shares the concerns. Every year injured workers and their families are bearing more and more of the cost of workplace injuries and illnesses.”
On to other matters…
Gender Wage Gap Increases, Again
You’d think that companies would get a clue about paying women less than men for the same work. But apparently testosterone triumphs when it comes to pay.
From the Wall Street Journal:
“The median weekly earnings for full-time male workers was $889 in the third quarter, the Labor Department said Tuesday. That’s a 2.2 percent increase from a year earlier. Meanwhile, full-time female workers’ earnings were $721, up 0.8% from a year earlier.”
“The latest data marks the third straight quarter that the increase in male earnings was at least double that of female workers. As a result, women who work full-time earned 81.1 cents for every dollar a man earned from July through September. That’s down more than a penny from a year earlier.”
Bill Kristol’s Crystal Ball Wrong Again
Neoconservative political analyst and commentator Bill Kristol has the second worst track record in politics when it comes to predictions. (Dick Morris holds the first spot.)
This guy just says whatever random stuff enters his brain and spins it out there. Yesterday, responding to release of the trailer for the upcoming Star Wars film, Kristol took a stand on the evil empire:
Bill Kristol, editor of the Weekly Standard, a neoconservative opinion magazine, called the Empire “a liberal regime w meritocracy, upward mobility. Neocon/reformicon in spirit.” Kristol added: “Needless to say, I was rooting for the Empire from the first moment. It was a benevolent liberal empire, after all.”
He’s also been the source for too much of the Joe Biden is definitely running for President crap we’ve seen in the media recently. Given that he’s the guy who predicted (and hyped) Sarah Palin as a great Vice President, I don’t know why anybody trusts him.
Yesterday he was telling the world that Joe Biden was having lunch with President Obama to inform him of his decision to enter the 2016 presidential contest.
And a few days before…
I’m told by Democrat I trust that Biden “almost certain” to run, will announce this week in time to speak at the Iowa J-J dinner Sat night.
— Bill Kristol (@BillKristol) October 18, 2015
Biden announced this morning that he’s not running. His candidacy was doomed the minute Kristol started talking it up.
On This Day: 1933 – Wisconsin dairy farmers began their third strike of the year in an attempt to raise the price of milk paid to producers during the Great Depression. Several creameries were bombed before the strike ended a month later. 1964 – The movie musical “My Fair Lady” made its world premier in New York. 1967 – Thousands of demonstrators marched in Washington, DC, in opposition to the Vietnam War.
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