* From the Senate Democrats…
As workers’ compensation reform talks continue, the Senate President reminded the caucus that as a result of 2011 changes, rates are dropping. There may be more that we can do, but we should acknowledge the progress that has been made. The attached visual illustrates that point.
* Click the pic for a larger image…
Discuss.
*** UPDATE *** Our resident workers’ comp expert Louis Atsaves responded in comments…
Before everyone does their happy dance, let’s keep things in perspective here. Premiums in Workers’ Comp are basically based on payroll totals. Payroll figures alone do not determine premiums but the type of jobs that generate those salaries that appear on the payroll. For example, an office secretary payroll premium is far less than a manufacturing worker who grinds metal. the premium for an office security guard is less than that of a flagger on a road construction site.
I would opine that the current job market with the loss of those high paying, higher premium jobs, coupled with less salary to service employees (department stores, non-union groceries, restaurants) that many of those workers moved into, is more evidence than a simple “premium” comparison.
The rates have declined on an average because of the loss of manufacturing jobs, steady construction jobs (road and bridge building) and other heavy industry (trucking, shipping) that have left this state since the year of the start of that chart.
If anyone plans on cherry picking those numbers by waiving that chart around as “proof” that Workers’ Comp is not in need of reform, then we truly are in sad shape. It means there are folks still out there that don’t fully recognize the problem the loss of higher paying blue collar jobs has created in this state.
- Anon - Wednesday, Aug 5, 15 @ 9:27 am:
Don’t go ruining a good political standoff with facts that demonstrate the problem the Republicans are complaining about doesn’t really exist.
- Anonin' - Wednesday, Aug 5, 15 @ 9:30 am:
And raises bigger question of why the Senate “reform” takes the insurance companies out of the spotlight….that sounds like something one can expect from TeamBungle
- Ducky LaMoore - Wednesday, Aug 5, 15 @ 9:31 am:
Sham illustration drawn by career politicians controlled by Mike Madigan who want to raise your taxes.
- 47th Ward - Wednesday, Aug 5, 15 @ 9:32 am:
Is this the report Rauner has allegedly not seen or read yet?
This might be a good time for one of the Superstars to brief him on it.
- Anonymous - Wednesday, Aug 5, 15 @ 9:32 am:
Only the people who pays Workmen com knows how bad it is comparing to neighboring states
- Former Hoosier - Wednesday, Aug 5, 15 @ 9:33 am:
I’ve not seen/heard any acknowledgment from Gov. Rauner that the worker’s comp. situation is improving due to the 2011 changes. I guess any such acknowledgment would interfere with his continual negative messages about Illinois.
- Anonymous - Wednesday, Aug 5, 15 @ 9:37 am:
when it really happens , he will acknowledge.
- truthteller - Wednesday, Aug 5, 15 @ 9:38 am:
The governor must be a deli man, selling baloney.The w.c. issue is as phony as he is. Outrageous that vital social services are being held hostage so that Rauner can pay back his wealthy supporters…
- Get a Job!! - Wednesday, Aug 5, 15 @ 9:39 am:
Hoosier,
Cullerton in a recent presser actually said he doesn’t think the Governor was “aware” that reform of WC happened in 2011. It’s tough to acknowledge the positive effects of reform you’re ignorant of.
- ChicagoVinny - Wednesday, Aug 5, 15 @ 9:39 am:
I co-founded a tech company with offices in Chicago and Cambridge, MA. If there’s a workman’s comp difference between the two states, it’s not enough that we noticed.
I don’t care what the rates in Indiana are because the employees I’m recruiting generally aren’t interested in living in Indiana. They want to live in world-class cities like Chicago. Let’s not get in a race to the bottom.
The cloud tax on the other hand… SMH.
- Tone - Wednesday, Aug 5, 15 @ 9:40 am:
How does this compare to other states? Illinois should be middle of the road in terms of cost. Not near the top.
- Louis G. Atsaves - Wednesday, Aug 5, 15 @ 9:43 am:
Before everyone does their happy dance, let’s keep things in perspective here. Premiums in Workers’ Comp are basically based on payroll totals. Payroll figures alone do not determine premiums but the type of jobs that generate those salaries that appear on the payroll. For example, an office secretary payroll premium is far less than a manufacturing worker who grinds metal. the premium for an office security guard is less than that of a flagger on a road construction site.
I would opine that the current job market with the loss of those high paying, higher premium jobs, coupled with less salary to service employees (department stores, non-union groceries, restaurants) that many of those workers moved into, is more evidence than a simple “premium” comparison.
The rates have declined on an average because of the loss of manufacturing jobs, steady construction jobs (road and bridge building) and other heavy industry (trucking, shipping) that has left this state since the year of the start of that chart.
If anyone plans on cherry picking those numbers by waiving that chart around as “proof” that Workers’ Comp is not in need of reform, then we truly are in sad shape. It means there are folks still out there that don’t fully recognize the problem the loss of higher paying blue collar jobs has created in this state.
- Former Hoosier - Wednesday, Aug 5, 15 @ 9:44 am:
Wow…Gov. Rauner unaware of legislation passed in 2011 that applies to one of his key issues! Is that how it is when you reign but don’t govern? Agree- we don’t want to be in a race to the bottom with Indiana!
- Downstate - Wednesday, Aug 5, 15 @ 9:47 am:
Former Hoosier,
Ask yourself, if the 2011 reform went far enough, why are the Dems holding talks on further reform?
In my business, our work comp rates are 2-3 times higher than in Indiana (we operate in both states).
- Demoralized - Wednesday, Aug 5, 15 @ 9:48 am:
I think @Louis makes an important point when talking about Workers Comp premiums. There are many factors that determine the premiums so simply trying to compare our rates to other states and say we need to be like them is a silly argument. We can work to lower our premiums. That’s a good goal.
- walker - Wednesday, Aug 5, 15 @ 9:51 am:
Anonymous: These are real data, produced by a commission run by a Rauner appointee. You might be right that many people have the perception that things are not getting better with workers’ comp rates, but that perception needs to be updated.
- JS Mill - Wednesday, Aug 5, 15 @ 9:52 am:
=If anyone plans on cherry picking those numbers by waiving that chart around as “proof” that Workers’ Comp is not in need of reform, then we truly are in sad shape. It means there are folks still out there that don’t fully recognize the problem the loss of higher paying blue collar jobs has created in this state.=
I agree with much of what you are saying. Our costs are down but we have also reduced more than 10% of our employees over the last two years. Our higher cost staff have retired, even wen replacing them the cost is almost 50% less.
The part about the “higher paying blue collar jobs” got a bit of a chuckle though. These are exactly what The “turn Around Agenda” aims to eliminate. These “higher paying blue collar” jobs are mostly union. Cicero was full of them, when they left for the south (as in Mexico not Tennessee) the “higher paying” vanished never to be heard from again. Hyperbole, sure, but significantly true. So long as corporations run by raiders like Rauner exist and have a place where they can pay .50 per hour, that is where they will go and no amount of corporate welfare is going to change that.
- the Patriot - Wednesday, Aug 5, 15 @ 9:53 am:
According to the Workers Compensation Commission Website(under the control of the Governor) Costs in Work Comp cases are down 19.3% since 2011. I don’t think you can attribute that all to loss of jobs. The problem is the insurance companies are not passing savings on to employers.
Also, keep in mind that many changes did not affect cases in the system when the bill was passed. It takes 2-3 years for cases to move through the system, longer for large cases. We really don’t know how much the 2011 amendments are going to work long term.
It should also be clear, this is about benefits to people who were hurt. If the employer does not pay them, the taxpayer will, either through medicaid and other social services, or by paying more more for services when the worker declares bankruptcy. Cutting work comp is a cost shift, not a cost reduction.
- walker - Wednesday, Aug 5, 15 @ 9:55 am:
Louis: Well said. Cullerton said that this doesn’t mean that further reforms are not needed. Best to accept reality rather than political talking points, before taking the next step.
- Joe M - Wednesday, Aug 5, 15 @ 9:56 am:
Perhaps the Governor has a checklist of Koch Brothers/National GOP stances that he works from. The checklist includes such items as weaken workers comp, do away with prevailing wages, establish right to work, weaken or preferably get rid of unions, fight progressive income taxes, etc.
And the Governor just goes down the checklist, pushing its agenda, without even researching the situation in Illinois, and fails to find things like the 2011 Workers Comp laws Illinois passed - or the Workers Comp Board’s recent annual report. Or that Unions are well established in Illinois - and that the GA is largely made up of Democrats. He misses all of that because he is too focused on the checklist he is working from.
- VanillaMan - Wednesday, Aug 5, 15 @ 9:59 am:
…comparing to neighboring states…
Don’t stop there! Compare Illinois to Guatemala, Paraguay or Marrakesh. Keep comparing Illinois to other possible global markets to justify stripping citizens of abilities to pay their bills. Why stop there? Compare Illinois to other planets!
Exactly what is it that you find so much more appealing elsewhere? Are we to start building hills to compete against Kentucky’s rolling farmlands? Should we stop farming the world’s greatest topsoil so that we can reproduce the Ozarks? Should we turn Chicago into St. Louis?
Comparisons like the one above are rarely constructive. There is always a “winner” and a “loser”, depending upon some subjective pre-designed definition.
Comparing Illinois to neighboring states is like comparing Colorado to neighboring states of Oklahoma, Kansas or Nebraska regarding how the Rocky Mountain State’s agricultural production isn’t where it should be. Then demanding changes.
This is market-mentality. This is believing that places really don’t matter. This is believing that communities don’t matter. This is the idea that says oatmeal is the same in a generic white envelope that is made in Macao, or in a box of Quaker Oats.
Stripping what makes Illinois Illinois, in order to create a demand - is just flat out the worse possible way to govern. It is lowest common denominator government. It is Aldi government. It is making one of the biggest, strongest and most important US states, have a government that isn’t better. It is just bad and cheap government.
Illinois needs better government, not-less-than-what-is-not-good government. Rauner was supposed to make state government better, and he is failing.
- Pete - Wednesday, Aug 5, 15 @ 10:00 am:
If not compared to other states, a competitive edge is lost.
Illinois has to compete for the middle class and blue collar Jobs. Our educated populous is drawn to Illinois for it’s centrally located position. This is fantastic for national firms using our airports to travel to East or West Coast and everywhere in between.
Identifying the middle class as union government workers drawing $70-$130K in annual wages neglects the needs of the blue collar workers that Louis G. Atsaves highlights.
- Domino - Wednesday, Aug 5, 15 @ 10:00 am:
Presumably,it’s known that CF’s ” resident Workers Comp Expert” is the husband of Rauner’s selected Chairman of the IWCC. Everyone is entitled to an opinion but readers are also entitled to know such an obvious bias.
- Touré's Latte - Wednesday, Aug 5, 15 @ 10:03 am:
The movement from ‘94 to ‘00 partly reflects the 1995 repeal of the Structural Workers Act, reducing remedies to just the Industrial Commission, which had a big impact on Oregon’s equations. Edgar and Ryan were Governors during that period. Movement over the last fifteen years is statistically insignificant. Illinois ranks 7th highest in country.
- Louis G. Atsaves - Wednesday, Aug 5, 15 @ 10:04 am:
@JSMill, you bring up some good concerns. Remember, your comp carrier is using your payroll numbers that you already paid, so layoffs may not appear as an initial savings unless you push the issue hard with them. Of course, an insurance company would be wary of a report of 10 layoffs in February, that could be rehired later in the year, so that negotiation can be difficult.
The higher paying blue collar jobs I ran (and still run) across representing employees, include union and non-union jobs. A lot of non-union shops pay close to what union shops pay to avoid being unionized. This would include at times work rules. To pin that argument on a sole pro-union/anti-union bias doesn’t seem to overcome that reality.
Rauner has been running around this state preaching for the need for more higher paying jobs, including factory jobs, manufacturing and construction as part of his “Turn Around Agenda.” I don’t necessary have to agree with every single item he is proposing, but I do agree to most of it. More working men and women in this state remains a positive.
- Michelle Flaherty - Wednesday, Aug 5, 15 @ 10:05 am:
If Louis is right, and I don’t doubt that he is, that means payroll plummeted during the 1990s under a GOP governor.
- Oswego Willy - Wednesday, Aug 5, 15 @ 10:06 am:
- Domino -,
If you have a point to make about the work-product of - Louis G. Atsaves -, have at it. If you want to go after - Louis G Atsaves -, make your case about him.
I do hope you feel better, because you missed the point about adding tobthe discussion.
- Louis G. Atsaves -,
Thanks for your thoughtful insight. WC is a very heated topic as of late, with it being, more likely, a “win” Rauner may be able to point to, to get beyond this logjam. Like - RNUG -, your comments add to my growing knowledge because you share your expertise. Thanks.
- Louis G. Atsaves - Wednesday, Aug 5, 15 @ 10:07 am:
@Domino: don’t sweat who I am married to. It is common knowledge here. And don’t feel that my views always mirror that of my wife. She is way smarter than i am!
- Joe M - Wednesday, Aug 5, 15 @ 10:17 am:
Did the Illinois Workers’ Compensation Commission whose chairman was appointed by the Governor, cherry pick its figures in its Annual Report?
https://capitolfax.com/2015/06/24/good-news-on-workers-comp/
Their annual report
http://www.iwcc.il.gov/annualreportFY14.pdf compared Illinois both to neighboring states and large industrial states, and covered more than just insurance premiums.
- Grandson of Man - Wednesday, Aug 5, 15 @ 10:22 am:
“Identifying the middle class as union government workers drawing $70-$130K in annual wages neglects the needs of the blue collar workers that Louis G. Atsaves highlights.”
Right to work and eliminating prevailing wages will further hurt those blue collar workers. What good is it to not only drastically cut government workers’ compensation but to also push down private sector workers by weakening their unions? A job growth trade off? I haven’t seen this trade off as being worthwhile. Some RTW states have among today’s highest unemployment rates.
About workers compensation reform: I support reasonable reform to help our businesses. They are our partners in prosperity.
- OneMan - Wednesday, Aug 5, 15 @ 10:22 am:
VM
== Don’t stop there! Compare Illinois to Guatemala, Paraguay or Marrakesh. Keep comparing Illinois to other possible global markets to justify stripping citizens of abilities to pay their bills. Why stop there? Compare Illinois to other planets! ==
Well, if I move or build the plant in Paraguay or Guatemala I incur other costs (like shipping both my goods and raw materials for example). Virtually everyone who makes a product would like to do it in the place with the lowest costs. It is the way things work and that isn’t going to change unless you end up with some sort of state control of locations of manufacturing.
I would be silly to put a machine shop in the loop when you could put it in Harvey for example because of the costs of real estate.
So if I build a part (lets say a ratchet component for seat belts, I spent a summer working in a machine shop that made those parts for a GM supplier) that supplier isn’t going to pay me more because I am location X or Y, they are going to pay me a fixed amount per unit. It is to my advantage to build that part in the place where I can do it with the least expense, that expense equation does not only include the cost of workman’s comp insurance, it includes the cost of getting the steel shipped to my shop, the costs of getting the parts to the supplier, etc.
So now, how would you propose increasing the level of manufacturing jobs coming (or remaining in this state) because the other thing when it comes to manufacturing that no one likes to talk about is how labor costs (regardless of location) vs the decreasing cost of manufacturing automation is over time going to reduce the amount of manufacturing labor in Illinois and around the world.
- ihpsdm - Wednesday, Aug 5, 15 @ 10:23 am:
More proof that Quinn actually got things done. This joke of a Governor has had countless face palm moments, and there are more to come.
- Party of Interest - Wednesday, Aug 5, 15 @ 10:30 am:
For a real world example of how WC premiums impact both business and employees, this LTE in the BND sheds light…. http://bit.ly/1P3CR88
- Norseman - Wednesday, Aug 5, 15 @ 10:33 am:
Domino, bringing family into an argument shows that you can’t analyze what’s being said. If that’s the best you can do, don’t bother posting anything.
Louis’ comments on workmen’s comp have been reasoned and well stated. JS Mill has also provided interesting insight into the issue. Since I’m not an expert in workmen’s comp and have no role in the decision making, I have to depend upon the information provided and my judgement on the reasonableness of that information. Come up with something reasonable to counter Louis other than his wife’s position.
- Ghost - Wednesday, Aug 5, 15 @ 10:34 am:
Mr astaves argues the numbers are better because we are losing manufacturing jobs since the 2011ish reforms, not the regorms themselves. Is there some data that backs this up? The last thing i saw had illinois growing in mnaufacturing. For example this crains report http://www.chicagobusiness.com/article/20130225/NEWS05/130229912/manufacturing-jobs-growing-faster-in-chicago-than-u-s-study-finds
If we are growing and our rates are going down then yeah for us
- walker - Wednesday, Aug 5, 15 @ 10:38 am:
One thing to remember when comparing state workers’ comp costs — when average salaries are lower in a state, like in all of our neighbors, wc costs automatically are lower. It’s a complex comparison.
- Anonymous - Wednesday, Aug 5, 15 @ 10:41 am:
==A lot of non-union shops pay close to what union shops pay to avoid being unionized.==
I wonder what those workers would be paid if there were not a union.
- Domino - Wednesday, Aug 5, 15 @ 10:43 am:
As stated, everyone has a right to an opinion. But when a news source names someone their “resident expert” it misleads the readership to omit such close ties to the Governor.That’s all.
- Juvenal - Wednesday, Aug 5, 15 @ 10:54 am:
Louis may be “our resident workers’ comp expert,” but he is by no means our resident expert on reading a graph.
He may be correct that the steep losses in manufacturing jobs under Governor Edgar and Governor Ryan account for the decline in worker’s comp rates during the 90’s.
But the number of manufacturing jobs in Illinois is virtually unchanged since the beginning of 2010, and the same can be said for mining and logging.
It is a nice straw man to say that Illinois has lost a lot of manufacturing jobs since 1988, but since no one is claiming that reforms passed in 2011 had a role in declining work comp costs during the Edgar years, I am not sure why it is relevant.
Moreover, according to the Oregon Report and even Rauner’s own handpicked Commissioner, Illinois has improved since reforms have passed.
I’ll add that it is erroneous to lump all manufacturing together when it comes to work comp. Computer and electronics manufacturers - who tend to pay their employees much better wages - have injury rates far lower than the service industry as a whole. While food and beverage manufacturing companies - which are more likely to rely on lower wage, particularly minority workers - have much higher injury rates.
- Joe M - Wednesday, Aug 5, 15 @ 11:02 am:
==The last thing i saw had illinois growing in mnaufacturing. For example this crains report http://www.chicagobusiness.com/article/20130225/NEWS05/130229912/manufacturing-jobs-growing-faster-in-chicago-than-u-s-study-finds==
The Governor sees it differently. “Chicago used to be a job mecca, now we’re a desert,” Rauner said at his press conference today. I guess he missed both the above article and also this article from Crains that stated:
“Land of Lincoln ranked No. 2 among states where businesses are being created the fastest, according to numbers released yesterday by the U.S. Bureau of Labor Statistics.”
http://www.chicagobusiness.com/article/20150619/EMPLOYMENT/150619769/illinois-among-top-states-in-creating-businesses
- steve schnorf - Wednesday, Aug 5, 15 @ 11:09 am:
Walker, you are saying that at least some part of the reason our wc costs are higher than most other states is that our wages in Illinois are higher than most other states, right? Louis, do you agree?
- Arthur Andersen - Wednesday, Aug 5, 15 @ 11:09 am:
I’ll add my thanks to OW’s to Louis for taking the time to help those of us who don’t deal with this complex topic frequently gain insight into the issues.
- Louis G. Atsaves - Wednesday, Aug 5, 15 @ 11:13 am:
@Ghost: “===Mr astaves argues the numbers are better because we are losing manufacturing jobs since the 2011ish reforms, not the regorms themselves.”===
That’s not what I argued. I argued what is shown on that chart, which goes back to a time much earlier than 2011, and yes, includes the Edgar administration days.
- Louis G. Atsaves - Wednesday, Aug 5, 15 @ 11:15 am:
@steve schnorf: Our wages are higher than our surrounding states on the average, so yes, it is a factor.
- Apocalypse Now - Wednesday, Aug 5, 15 @ 11:31 am:
=Presumably,it’s known that CF’s ” resident Workers Comp Expert” is the husband of Rauner’s selected Chairman of the IWCC. Everyone is entitled to an opinion but readers are also entitled to know such an obvious bias. =
Ha! Lots of commenters on this blog have built-in bias based on their connection to elected officials or their employment by a government entity. That is a given.
- walker - Wednesday, Aug 5, 15 @ 11:53 am:
steve: Glad that Louis confirmed for me. That’s part of what makes state to state comparisons so tricky. Also differences in workforce and industry make-up.
However, for any individual company, it remains easy to determine where that company’s costs would be higher. My sense, based on the handful of folks I know who operate in multiple states, is that the problem is not as severe as portrayed, but we still have room for improvement.
DCEO might actually have survey data on this issue.
- nona - Wednesday, Aug 5, 15 @ 12:00 pm:
=== the loss of higher paying blue collar jobs ===
And Rauner is going to bring them back by making sure there are no unions, right?
- JS Mill - Wednesday, Aug 5, 15 @ 12:00 pm:
=To pin that argument on a sole pro-union/anti-union bias doesn’t seem to overcome that reality.=
Certainly not what I was attempting here. The mere fact that unions exist (so far) help even non-union worker’s level of compensation. I think your own words bolster that notion. To what degree that is true is hard to know. Even as Toyota, BMW and other big name manufacturer’s add jobs in the south that pay a wage that, while not higher, is relatively comparative to the wage of a unionized employee doing the same job elsewhere. This would seem to be an indicator that work rules would be the main issue. There is some truth to that.
History provides a better measure/reason for the differences. When I refer to History I am referring to the broader history of the industrial age. Typically, the longer an industry exists in an area the higher the average wage. Workers, over time, expect/demand more say in the workday and their duties. This is where the development of work place rules begin. It may be due to abuse of workers (early industrial age in particular) or simply an increasing awareness of the value of labor and better education that results from increased earnings and the life changes that accompany that. That is a big reason for the decades long migration of manufacturing to the sunbelt. Like other established “rust-belt” states will struggle to compete. Unless wages are lowered (along with the standard of living which will impact all of us, but ownership less significantly). Some of this is simply history in action. Look to England and, more recently, Japan as prime examples.
Illinois is uniquely positioned to globally excel/compete/dominate in two very important areas. Ag and innovation are our best opportunities moving forward.
Most mistakenly take the ag reference to mean only the growing of crops. No doubt, Illinois is a dominant player in soybeans and corn. Along with that comes tech, transportation, manufacturing, education, chemicals, research, sales, services, and processing just to scratch the surface. Only a small portion of that is unionized in any way.
Innovation runs hand in hand with ag. We have an educated work force, research universities, a research corridor, a relatively high level of education among the general populace.
Illinois IS successful in these areas. Haveing a governor bad mouth (my words) Illinois, continue to not pay the bills (he has co-equals in this area MJM et al) does not help and in fact increases the cost of doing business when it costs more to borrow for capital investment (only one example). He needs to lead, not like a guy that made money as a corporate raider, but as an executive and set the tone for Illinois moving forward. I have been in a board room or two, the guys with the smart mouth flunkies always end up on the wrong side of the deal. Our state leader needs to lose those guys and get on to leading for everyone.
Domino- Family is strictly off limits and your approach is simply chicken snot. We all know what Mrs. Atsaves does. Everyone has the right to make a living, all I have ever heard is that she well regarded as a professional and (tip of hat to Louis) the brains of the outfit at home (like most of us!).
- Triple fat - Wednesday, Aug 5, 15 @ 12:33 pm:
Let’s just get rid of Work Comp completely… The “job creators” complaining about Illinois being so much higher than the red anti-Union states around us make me sad. We should just go back to the days before WC tilted the possible results to their favor and allow them to sue their employer in court. That way these poor business people won’t be saddled with those “terrible” premiums that stifle their ability to compete. Any takers?
- Triple fat - Wednesday, Aug 5, 15 @ 12:42 pm:
I meant, …allow workers to sue their employer…
- A guy - Wednesday, Aug 5, 15 @ 2:27 pm:
=== walker - Wednesday, Aug 5, 15 @ 11:53 am:===
Walk, maybe the best areas to compare for apples and oranges are: Construction, Manufacturing, Large scale contracting. There isn’t as much variance across state lines in the skilled labor areas as there might be in other fields.
There remains a significant problem here in Illinois. It’s unreasonably too high. There has been some relief and improvement, but there’s a long way to go to make us competitive on the WC front. It’s a painful expense for starting, growing or staying here. You may even be able to add transportation into the examples I offered.
I’d certainly defer to Louis (or Mr. Schnorf) if I’m mistaken in any area here, but I’ve worked on several task forces working to lower the cost of WC and have spent a lot of time reading and listening.
- Anonymous - Wednesday, Aug 5, 15 @ 3:25 pm:
Notice that the biggest drop is right after the passing of NAFTA. The loss of those jobs is what lowered rates…
- Just Me - Wednesday, Aug 5, 15 @ 3:26 pm:
The logic and numbers that began this discussion do not make sense. Premium is determined by the following formula: rate multiplied by payroll. If both factors involved in the equation, rate and payroll, have gone down, how can it be that premium has gone up? According to NCCI, total premium has certainly gone up since 2010 from $2.4 billion in 2010 to $2.7 billion in 2014. According to NCCI, rate has gone down by 19% during that same period. So the only way to account for the higher total premium is in fact higher total payroll, and significantly higher in order to negate completely the 19% rate reduction and actually cause a premium increase instead. In fact,the insurance industry itself explains the higher total premium in the face of the 19% rate reduction by saying that payroll has gone up. An employer that has the same payroll now as in 2010 should be paying a 19% lower premium. An employer that has a higher payroll now should still be paying 19% less than it would have otherwise without the rate reductions caused by the 2011 reforms.
- Enviro - Wednesday, Aug 5, 15 @ 4:19 pm:
The corporations complain that workers comp is too high, prevailing and minimum wages are too high. But they will never admit that CEO and executive pay, bonuses, and pensions are too high compared to workers pay and benefits. They will not admit that the income inequality is the issue we should be addressing, not workers comp and wages.
- walker - Wednesday, Aug 5, 15 @ 4:28 pm:
A guy: Sounds like you’re pretty well-informed on this. Agree there remains a WC expense problem in Illinois in fairly competing for companies in certain industries with other states. As with a lot of things — it’s not the disaster one side would portray, neither is it fully where it should be. This will be improved with Dem support when all is said and done.
Rauner’s argument I’m guessing is that none of these — workers’ compensation, tort reform, DCEO restructure, some locations with RTW, property tax freeze –is a gigantic fix on its own. But taken all together, and with some fiscal stability, and a savvy salesman Governor, Illinois can attract and retain more big employers. Part of it is purely market perception.
We don’t have to make any one of these things “do or die.” We simply must make enough change to boost Illinois’ selling proposition.
Unfortunately Rauner’s core job requires much more than simply attracting companies. And that this will work as imagined is unclear.
- 1776 - Wednesday, Aug 5, 15 @ 4:51 pm:
The fact that paid losses fell 19 percent is because the number of WC claims fell from 53,000 to 44,000. Fewer claims = less dollars paid.
- Just Me - Wednesday, Aug 5, 15 @ 5:02 pm:
Perhaps a savvy salesman should begin selling Illinois based on the following undisputable facts: Since 2010, Illinois has experienced larger WC rate reductions than any state in the country. Illinois premium index rate is actually lower in 2014 (2.35) than it was in 2004 (2.65), not relatively lower, but absolutely lower. Is it too much to ask that a savvy salesman should try to correct an incorrect perception with actual facts?
- Just Me - Wednesday, Aug 5, 15 @ 5:09 pm:
Fewer claims and less total dollars paid are two more reasons why premiums should have come down, instead of going up. Payroll down, rates down, claims down, total costs down, but premiums up? How does that make any sense?
- Wordslinger - Wednesday, Aug 5, 15 @ 6:01 pm:
Since the Great Recession, the value of Illinois manufacturing output has grown by 25%, a greater rate and more in actual dollars than any neighboring state.
Illinois workers also are paid substantially more than those in neighboring states.
And although Illinois is not nearly as dependent on manufacturing as some neighboring states, it’s still the largest manufacturer in the Midwest (third in country behind California and Texas).
More growth and higher pay? Obviously, radical changes are needed to reverse these troubling trends.
From the National Association of Manufacturers, 2014 state data report.
Illinois
2008: $80B
2013: $101B
12,853 firms
579,600 employed (2014)
$78,971 avg. comp.
——–
Indiana
2008: $80B
2013: $95B
7,283 firms
523,200 employed (2014)
$70,333 avg. comp.
—-
Wisconsin
2008: $48B
2013: $53B
7,970 firms
474,900 employed (2014)
$66,844 avg. comp
—
Iowa
2008:$27B
2013: $28.4B
3,107 firms
214,600 employed (2014)
$63,683 avg. comp
—–
Missouri
2008: $33B
2013: $36.3B
5,598 firms
258,400 employed (2014)
$65,624 avg. comp
—–
Kentucky
2008: $28B
2013: $33.6B
3,362 firms
232,500 employed
$64,955 avg. comp