Seeking to slap a “radical” label on a sensible, middle-of-the-road deal on workers compensation reform, the Washington Federation of State Employees wrote this about the Senate’s bipartisan agreement Saturday:
“It’s the first sign that the kinds of attacks on workers we’re seeing in Wisconsi
n can happen here.”
In labor-friendly Washington, it’s a departure from reality almost on the order of Moammar Gadhafi or Charlie Sheen. And coming from the state’s leading labor lobby, it suggests a lack of seriousness regarding the dire financial condition of the system that pays claims to workers hurt on the job.
The state auditor’s office described it this way in December: The system has a 95 percent chance of becoming insolvent in the next five years.
Its reserves have taken a hit during the recession, with lower investment returns and fewer employers and workers paying into it, but it has also become unaffordably generous over time. While the volume of injured worker claims has declined, costs to employers continue to rise, making Washington less competitive for new jobs.
To rebalance things and put workers comp back on the road to fiscal health, the Senate passed ESB 5566 on Saturday, which would, among other things, establish an option for injured workers to take a lump-sum settlement rather than a lifetime pension. Workers would be free to decide which way to go; if they chose a pension, current benefit levels would still apply. They could be represented by a lawyer, or be consulted by a state settlement officer.
The voluntary lump-sum option is hardly a radical idea — it’s available in 44 other states.
The Senate bill also includes subsidies for employers who bring recovering workers back for light-duty work, which studies show leads to healthier outcomes. Labor supports that provision.
Creating a lump-sum option is important because it’s likely to reduce costs in a system that’s bleeding money. Its liability fund is $275 million in the red. That’s largely because 85 percent of the system’s costs — for workers receiving benefits for long periods and for lifetime pensions — come from just 8 percent of all claims.
Bare facts like that helped convince 12 Senate Democrats, including Majority Leader Lisa Brown, to side with Republicans and pass the bill by a 34-15 margin.
Labor hopes to find a friendlier audience in the House. We urge lawmakers there to get past the hyperbole and take a sober, long-term look at what’s best for workers and employers alike — and for the kind of job growth our state needs to truly put the recession behind us.
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