Dr. Richard Victor, an economist who founded the Workers’ Compensation Research Institute (WCRI) 35 years ago, just presented a paper at the WCRI National Conference in Boston. He indicated that federal policies on immigration and health insurance promise to make worse the challenges the United States faces by an aging workforce and a widespread labor shortage. He noted that workers’ compensation claims could double and overall costs could expand by over 300% in the next dozen years, without any increase in benefits to workers. External forces could bring far more cases into the system because of a number of forces, including an aging workforce, labor shortage, slowdown in immigration, and more shifting to workers’ compensation claims that should be paid by group health insurance. Dr. Victor projected current claims out a dozen years to 2030 indicating that claims should actually be down to about ¾ of today’s numbers, but external factors will more than overtake that favorable percentage. Labor shortages caused by baby boomers retiring will increase injury rates. Research indicates that the older workforce will mean an increase in lost work days and more injuries and a real impact on labor shortage as more baby boomers retire. Dr. Victor indicated “These labor shortages, which will be longer and deeper than anything we have experienced, will lead to significant increase in workers’ compensation claims and longer durations of disability.” During a period of labor shortages, employers relax hiring standards and hire workers they would not have hired in a normal labor market, including workers who are less capable. The overall labor shortfall leads to more workers’ compensation claims.
The Immigration Factor:
Economists have seen immigration as a factor that mitigates against the impact of the labor shortage. The Trump Administration, changing federal immigration policy, will further tighten labor markets and prolong the duration of a labor shortage. Moreover, Trump’s “anti-immigration rhetoric” also discourages people to come to America. In health care, Victor noted that one in six health care workers is foreign-born including 27% of physicians and surgeons, 15% of nurses, and 22% of home health aide, each of which effects the workers’ compensation system.
A shortage of people with adequate health insurance is also a problem for workers’ compensation. Health insurance deductibles have risen from the hundreds to many thousands of dollars, and this new reality causes more workers to go without or delay getting medical care for an injury or illness. When they can no longer ignore their condition, many claim it as a work-related condition and seek workers’ compensation (he cited a Rand Research study indicating workers with high deductible or co-insurance plan postponed care in over one-third of cases of the most common kind of workers’ compensation claims – soft tissue injuries.” As the number of workers who lose their insurance grows (since the Trump Administration and Congress ended subsidies and other aspects of the Affordable Care Act) case shifting form health insurance to workers’ compensation could have a major effect, ballooning workers’ compensation claims by as much as 35% in the next dozen years.
Victor’s conclusion: “You end up with a 300% increase in workers’ compensation costs without increasing benefits to injured workers.”
Specifically, in terms of worker and consumer safety, the Mine Safety and Health Administration is revising a mining inspection rule published three days after Obama left office by allowing examiners to do their reviews while miners are working letting companies not record hazardous conditions if they are immediately corrected.
The Trump Administration Interior Department ordered the National Academy of Sciences, Engineering and Medicine to stop a study of health risks for residents near surface mining operations in the Appalachians.
The EPA delayed implementing a rule that would have changed how agricultural workers are protected from pesticides.
The EPA is delaying implementation of rule to require manufacturers to label formaldehyde and composite wood products.
A Coast Guard plan to regulate firefighting systems on tanker ships and helipads on offshore platforms was withdrawn.
Additionally, a Coast Guard rule that would have required all ships and berths to maintain equipment and technical systems for safety was withdrawn.
OSHA delayed implementing a rule regulating construction worker exposure to silica (linked to lung disease and cancer).
The House and Senate passed a bill signed by President Trump eliminating worker safety regulations aiming to track and reduce workplace injuries and death.
The Labor Department removed from its agenda a proposal to stiffen exposure standards for chemical solvents.
The Labor Department cancelled plans to lower permissible exposure limits for some substances that had been set in 1971 and cancelled plans to revoke obsolete permissible exposure limits for other substances.
The Labor Department removed from its agenda a proposal to tighten exposure standards for styrene, a chemical used in plastics identified as a carcinogen.
This laundry list of anti-worker executive actions, Cabinet-level agency decisions and Congressional review acts reveals the hypocrisy of Trump’s campaign promises to help working families. Rather, it reveals his completely anti-worker policy.
Mike Elk of Payday Report recently ran an article detailing that workplace deaths among Latinos were the highest in 2015 than they had been since 2007. This spike was attributed in part to aggressive immigration enforcement by the Obama administration which immigrant advocates believed made workers afraid to speak out about working conditions over fear of deportation.