Ask any worker and their union representative about the state-based system of workers' compensation and you'll probably get the most cynical response imaginable. There are real reasons that produce that reaction. It doesn't start with workers and their unions. On the contrary, it is employers and the workers' comp insurance carriers who cultivate that reaction and perception. They are the root of the problem.
Corporate America works overtime against any progressive reform of the workers' comp system. And they've been doing it for 100 years. Union shop stewards are the answer to changing the system. They are in a position to support the legal and worker rights that are now disregarded and shamelessly opposed by employers and publicly elected officials. Profits are the mission of employers and the workers' compensation insurance carriers that they hire to oppose worker claims. This also keeps working conditions hazardous. Employers don't pay for their mistakes and conscious exposure of employees to killing dusts and other hazards; worker themselves pay.
The System
Workers' compensation is a system that was enacted as a state-based system in the US, starting in New York State in 1910. It was declared unconstitutional at the time. Laws then were not allowed to infringe on the profit rights of corporations. The "Robber Barons" were in charge. But the human carnage mounting from the industrialization of the US in the steel and mine operations; on the railroads and in the agricultural fields was becoming a nation catastrophe. On-the-ground the nation's religious and social welfare organizations simply could not take care of the industrial victims. There was no unemployment insurance or social security to help victims. In 1914, New York State changed its constitution to allow for workers' compensation to become the law of the state. Other states followed suit over the years.
Before 1914, workers were allowed to seek financial remedies from their employers in state courts by proving employer negligence. There are few if any cases of workers winning any money in those courts. The reasons were simple. The judges were clearly on the side of employers; rarely sympathetic to worker interests.
When a case was grievous enough to have a chance for a successful verdict, employers were allowed to use three defenses:
1. Workers "knew about" the hazards when they took the job;
2. The worker "contributed to" the accident;
3. A "fellow worker: caused the accident.
Given those defenses, workers didn't stand a chance in the courts.
If the disabled worker successfully navigated that tortuous road and the judge was about to award him or her money and medical benefits, employers often step forward to offer an out-of-court settlement. That closes the case without any evidence of employer wrongdoing.
Background
In Germany, Bismarck enacted a national system of both workers' compensation and national health insurance in the 1880s to head-off revolutionary forces. Germany decided to establish a national system with no private insurance carriers.
England, which was facing similar industrialization and radical worker reactions later in the century, also enacted a national workers' comp system, but while keeping it nationwide, allowed for private insurance companies to write the insurance.
In the US the worst of all solutions was adopted. There would be no national system, only state-based systems, and private carriers would write most of the coverages. Only federal workers, longshore workers and a few others would benefit by a federal system of workers' compensation. The federal workers' comp system is far better than any of the state-based systems. It pays wage replacement at a far higher level and the medical benefits are superior.
OSHA & MSHA
When the Occupational Safety and Health Act (OSHA) was passed in 1969/70 by a Congress that was heavily pressured by labor and worker support groups; they also asked for a complete re-evaluation of workers' comp. The Mine Safety and Health Act (MSHA) has passed at the same time. Both tied the failure of strong federal and state regulations to the rising toll of injuries and illness. A commission was established and reported back 5-7 years later. Some reforms were put forward, but by and large, the system was not changed. Congress rejected practically all of the pro-worker proposals put forward by the commission. Corporate America absorbed the battle defeat of the passage of OSHA and MSHA, and regrouped to defeat workers' comp reform that would help workers.
Coal miners, their union, the United Mine Workers Union and their supporters didn't wait for the national government to act. In the 1960s, they demanded in the state capital of West Virginia that Black Lung Disease, the respiratory disease that combined rock and coal dust and killed coal miners in a very predictable way, be recognized. That predictability meant that the word "Presumption" must be used. And, the Black Lung Association, the UMWA and physicians who diagnosed victims and stood up to the coal operators won this battle. Starting in West Virginia and then in Washington, DC a "Presumption" was established that if a coal miner works for a defined period of time, it is "Assumed" the miner qualifies for Black Lung Benefits. The use of x-rays and blood tests would not be the final test determinant. This was and remains a historic victory. The "presumption" concept was violently opposed by all other employer.
But, as you can imagine the struggle to protect miners from coal and rock dust is endless. The laws and regulations are not working as they should. According to the Charleston Gazette, Joe Main former Director of Occupational Safety and Health for the UMWA and now President Obama's head of MSHA, over 10,000 miners died of this dread disease in the last decade. And, there is fear that many are dying with not having extensive exposure.
The workers' comp system for everyone else is a system which replaces a portion of wages and gives medical care for disabilities for work-related injuries and illnesses with some money for death on the job. And, that has remained extremely low for decades. There is a very wide range of benefits between the 50 states.
Permanent Partial Disability
Having successfully won the battle to keep wages low and medical benefits meager, employers focused on cutting back on the benefits to workers suffering with PERMANENT PARTIAL DISABILITIES. These disabilities are the ones which workers suffer permanent respiratory damage to their lungs or other partial physical injuries, but may still are legally allowed to return to their previous job and collect some money. In New York State, for example, permanent partial disability payments for non-respiratory illnesses were fairly good. But, it is next to impossible to collect for permanent partial for occupational respiratory, lung illnesses, e.g. silicosis.
One particular event took place in Gauley Bridge, West Virginia when Union Carbide, in the Depression years of the early 1930s, drilled a public works tunnel through "Hawks Nest" mountain, near Gauley Bridge. The purpose was to harness the Kanawha River for hydroelectric power. Over 5,000 miners died of silicosis since the rock they were drilling had very high silica content and Union Carbide knew it. They even expanded the breadth of the tunnel when they discovered its high percent silica (sand) content. Some workers died with as little as five months of exposure. That industrial killing is still one of the most severe cases of workers being murdered by employers. After Vito Marcantonio, Congressman from NYC, many of those miners were from NYC, held hearings, New York State passed a Permanent Partial Disability for respiratory diseases. The law lasted ONE YEAR and corporations in NY State forced the state legislature to remove that law; and, it did. That situation exists today.
Union Carbide, which is now owned by Dow Chemical, the manufacturer of napalm war materials, is the same company responsible for the deaths of over 15,000 people in Bhopal, India 25 years ago, this year. In that instance it was the release of poison chemicals.
Medical Exams
Any complicated medical diagnosis and determination brings a powerful corporate response. For example, often a medical dispute arises. The injured worker's doctors submit regular reports saying he is still disabled. The insurance company submits a report saying that the worker is fully recovered, able to go back to work and no longer entitled to benefits.
A trial follows. Testimony is taken from both doctors, the worker and the employers. In three, four or maybe six months the judge makes a decision as to which doctor is more credible. In NY, probably 85 percent or more of these cases are eventually decided in favor of the worker. But the judge must, by law, stop payment to the worker as soon as the insurance company presents its "no disability" report. The worker remains without income throughout the months it takes to resolve the dispute. The priority, written into the law, is to protect the insurance company from paying out money that, possibly, the worker is not entitled to, rather than protecting the worker's right to benefits that, in the vast majority of cases, he or she is entitled to, and the cutting off of which often results in destitution, hunger and homelessness.
In the above scenario, the Board is required to schedule a hearing within 20 days from receiving the "no disability" report from the insurance company. But an injured worker, unable to work, who seeks payment, can never get a hearing that soon, even with the new, in NY State, so-called "expedited hearing process."
But, that was not enough for Corporate America. They wanted more. So, recently, in order to get a very small increase in the maximum weekly wage replacement, NY State agreed to limit the length of time a worker could collect permanent partial workers' comp. This legislative act put millions dollars of profits back into the treasuries of the corporations.
But, if you think they are satisfied, you would be dead wrong.
Corporations still complain. Oh, how they complain. They threaten to leave a state if workers' comp wages and benefits are increased. Get the State vs. State scenario? These threats are worth million of dollars of profits for the corporations.
They continue to complain. They never stop complaining. Their fundamental, basic complaint is if you give workers too much on workers' comp, they won't return to work. Employers and the workers' comp carriers spend millions of dollars on attorneys and "billed time" fighting against any improvements and for cutbacks.
The mass media is a crucial part of the corporate strategy. For example, liberal oriented "Sixty Minutes" annually has a segment showing a disabled worker collecting benefits and still doing difficult, usually recreational fun. In New York City, for example, the NY Daily News, at least two times a year will print stories, given to them by the New York Transit Authority [NYC bus and subways] about the worker abusing the system. NY City Transit is a self-insurance company which challenges workers' comp plains two the three times private sector employers. But, these stories and the media attack have its affect.
Like other insurance carriers, they spend millions of dollars to influence every state capital politician; and, of course, Congress in Washington, DC. The money they use is the premium dollars they accumulate. The medical payout ratio that keeps benefits low and awards that practice with loads of money for payoffs to politicians.
The net result of all of their millions and anti-worker strategy is that too many workers force themselves back to work far before they should.
In Europe and other industrialized countries, workers' wage replacement is almost the same as their working wages. Workers are regularly paid 90% of their wages. There is no problem with returning to work. Life for workers in Europe is not great, but compared to the US, laws passed and respected and enforced to a greater extent than the US.
The exploitation of workers in the US, around the issue of workers' comp, is at its gravest worst.
The cartoon image of disabled workers being thrown on to the scrap heat, ala a Charlie Chaplin movie, is an everyday reality in the US.
Public Health
The American Public Health Association, an organization over 30,000 health oriented members at their Annual Meeting in Philadelphia, where over 12,000 gathered, viewed this crisis and passed a resolution to begin to correct it.
The resolution said that the current system of workers' compensation is characterized by "mistrust, denied claims, stigmatization, payment delays, and refusals to pay benefits."
Currently, each state administers its own workers' compensation system and individual states differ, "often dramatically, on the level and scope of permanent disability benefits, coverage of mental health conditions resulting from work, and insurance and claims administration regulation."
The resolution called for the system to be re-vamped by "put[ting] prevention of injury and illness, and rehabilitation of those unable to return to work after injury an illness, as its foremost goals."
The resolution said that the "current fragmented workers' compensation system should be replaced by a national program with uniform coverage of health care and adequate loss-of-earnings benefits for all occupational injuries and illnesses."
The APHA resolution made the following recommendations:
· "The system should include a national standard of coverage for all workers, including all federal and state government workers. Individual state exemptions for seasonal agricultural workers, home care workers, domestic workers, part-time workers, contractors, immigrant workers, employees of small companies and all other special categories should be removed.
· "The system should be integrated in a seamless manner with the Social Security disability program (SSDI); benefits should be provided for all permanent injuries and illnesses.
· "Health care for injured workers should be provided by a national health care system independent of industry involvement and insurance industry control; health care providers should be removed from the responsibility of determining eligibility for benefits.
· "The system must have money set aside for: training of occupational health and safety professionals; preventive initiatives based on root injury and illness analyses; worker health and safety training; and mandatory reporting by health professionals.
· "There should be a national medical and statistical database on worker injuries, worker illnesses, worker toxic exposures and resultant diseases. A national database would lay the groundwork for research into the causes and consequences of occupational illnesses, and lead to improved diagnosis, treatment, prognosis, and ultimately, prevention of occupational diseases."
The Cost of the System
You'll note that the APHA policy statement and most worker and union advocates do not quote any numbers in regard to workers' compensation. Why? All of the numbers, i.e., the cost of the system; the number of workers seeking and successfully gaining their claims; and similar data is completely controlled by the workers' comp insurance companies, themselves. They are regulated; if that is what they would call it, buy themselves. Yes, "peer reviewed" regulation is what dominates in state governments. There is rarely if any independent review and analysis of their data reports.
With all of the popular talk about asbestosis, silicosis, coal workers pneumoconiosis, lead poisoning, occupational cancer and other occupational illnesses and diseases, in any one state of the union, less than 3% of all successful claims are for occupational illnesses and diseases. This means that the negotiated health benefit program pays the medical and related costs of work-related illnesses and diseases, if there is a union. If the worker has no union and no health insurance, the victim, he or herself pay it. This more often than not is the rule not the exception.
While in most states, the breakthrough in asbestos related workers compensation claims took place about 20 years ago, for most other illnesses and diseases, it is next to impossible to win those claims.
Liberty Mutual is the top insurance carrier among many and, they have successfully financially influenced state government to agree with their positions. At the same time they virulently influence Congress to keep workers' comp a state-by-state issue.
What is Lost With No Enforcement?
A good question would be: What is lost with no enforcement of already lax insurance laws and, essentially, permitting these practices? Simple. While compensating workers for work-related illnesses and diseases is the primary mission of workers' comp the other, and equally important reason is to penalize employer for not protecting their employees form the hazards that create the conditions that give workers those disabilities.
The penalty system is simple. Insurance carriers increase premiums for employers with records of hurting their employees. Successful claims translate into higher premiums and forcing employers to fix the workplace. It is the old fashion incentive system.
When this doesn't happen, workers and their unions are left with OSHA and MSHA to regulate the workplace. Well, we know the record of both OSHA and MSHA to force employer to do it right. Extremely bad! This is a "Lose-Lose" situation for workers.
Union Shop Stewards: First Line of Struggle
Yes, the crucial ingredient to protect workers is the elected (and appointed) shop stewards who are trained to protect their comrades from injuries and illnesses. They are the first line of defense and must be able to enforce their labor contract; and, strategically use OSHA (Public Employees S&H Laws for public workers) and MSHA laws. Shop stewards have historically been the called upon to perform these duties, but, an alert and aggressive local union leadership must provide the spark and support for this important union shop floor responsibility.
That is right, without a union, workers are essentially defenseless. They need aggressive regulation enforcement by state and federal laws and administrators. But without strong union enforcement, these regulations are just words on paper. Union shop steward make aggressive union action possible. Few workers will risk their jobs to call in OSHA inspectors. Without a union contract, and strong stewards the law protecting the right to report safety and health hazards and violations is almost impossible to enforce. Stewards can help workers file claims. Thousands of work-related injuries and illnesses are routinely not reported.
Those who want to help reduce these injuries and illnesses must also support measures to increase unionization of U.S. workers, such as the Employee Free Choice Act.
Public advocates in groups like the locally based Committees for Occupational Safety and Health (COSH groups) are very helpful.
The accumulation of shop steward generated data/experience with work-related injury, illnesses and diseases from a few key places could be used in state capitals to force real changes in workers' comp laws. A moderately long-term strategy to mount this strategy in a few key states could do what the Black Lung struggle did 40 years ago. These are the real life experiences that can change the situation toward workers' interest by arming state and national organized labor organizations to fight in state capitals and Congress.
The Crisis Demands Action
The Obama Administration is in a perfect position to take steps to correct workers' comp laws. The first step should be to enforce the National Commission's proposals to federalize state workers' comp system that don't achieve certain goals. Democratic Party control of the White House and Congress, in the past, gave some improvements to workers in this area of workers' rights.
The National Commission on Workers' Compensation has already set the basis for major workers' comp reform in the 1970s. We don't have to reinvent the wheel. The system is still the same anti-worker, anti-worker family since then. The only change has been for the worse.
The capitalist economic and financial crisis is making this bad system much worse for workers. For many disabled workers, either by physical injury, occupational illness or diseases and mental damage, the choices are few and none. They are reporting less of their disabilities and staying on the job as long as possible. The fear of unemployment, with the official jobless rate above 10%, especially when the worker might be the only earner in the immediate or extended family, forces workers to stay on the job. In these instances, a mild physical injury would grow worse. And, a respiratory problem would become more severe. In both instances, the source of the problem would go unchanged.
Corporate American is turning up the heat to produce more with fewer workers. The stock market is going great and the bonuses are high and wide at the big corporations like Goldman Sachs. Wall Street is sitting pretty. And, they continue to lay off more workers; and, of course, not employing them with their bail out money and super profits.
It is the US worker who is paying for all of this greed. And, make no mistake about it; the greed that produced the economic bubble and the mortgage crisis is just as rampant now as then.
The sparks from the labor movement show that a rising tide of rage is taking place across the country. Workers' comp produces the kind of slow, deep-seated worker rage that is rarely understood by government and university policy makers. But, be sure that union leaders who have their ears to the ground understand it well.
The White House demand of Congress to pass the Employee Free Choice Act would be an important step.
Special Note: Lessons For Current National Health Legislation
Over the last decades' struggles for national health legislation, some community-based groups, rarely labor unions, have opposed a national health legislative program, rather they supported State-based health insurance programs. And, in fact, given the corporate/Wall Street ability to hamstring and kill off a national health program, some progressive political activists have called for the abandonment of a national program and for a State-based program with seed money coming from the Federal Government. Some of these progressive have clouded the demand by supporting the former Senator Paul Wellstone "Single Payer" proposal, which was entirely state-based. Wellstone was the popular deceased, former US Senator from Minnesota.
There is mostly just bad experience with states enacting health coverage for its people. The recent Massachusetts Health Plan started off fairly good, but is now in terrible disarray and cutbacks are rather dramatic. Twenty years ago Massachusetts passed a similar state-based health bill that was also a disaster. Other activists have unsuccessfully spent great effort to get their state government to enact state-based health systems. Hawaii has a state plan which seems rather good, but its hard to extrapolate from the example, given the rather isolated location of the state.
The US state-based workers' compensation programs as compared to the federal workers' comp system has the federal system winning hands down. It wins with far higher wage replacement, lasting a lifetime; and, far superior medical and mental health benefits. And, yet, that experience has not been considered in the Congress or the White House in the current national health discussions. National health care advocates, hopefully, will redouble their national health efforts, and forego state strategies for a while.
(Photo by jbcurio, courtesy Flickr, cc by 2.0)
