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The Proof is in the Pudding: Restricting Workers’ Compensation Does not Pay

Governor Rauner’s Turnaround Agenda has focused on one simple argument: State businesses are being unfairly burdened and need to be freed from expense for the state to flourish.

It may seem simple and direct, but simplicity does not equal truth, especially when that argument is applied to several other portions of the state’s budget – specifically workers’ compensation.

In a recent statement from the Illinois Trial Lawyer Association, president Perry Browder directly addresses the myth that workers’ compensation settlements restrict the business and actually hurt Illinois workers.

Quoting directly from Gov. Rauner’s Turn Illinois Around agenda available at Illinois.gov, the document states:

Twenty-nine states have a higher causation standard than Illinois. Missouri, Kansas, Oklahoma and Tennessee recently passed laws requiring the workplace to be the primary cause for workers’ compensation to be compensable. Florida’s major contributing cause standard is identical to the one we are proposing.

Often, when making a decision about any political action, voters try to make the best decision based on speculative data, but in this specific instance, the citizens of Illinois now have the luxury of comparing outcomes to states who have already enacted workers’ compensation reform.

Household Income National Average 2003: $32, 678

Household Income National Average 2014: $44, 569

Difference: 11,891

Illinois household income 2005: $60,929

Illinois household income 2014: $57,444

Difference: -$3485

Tennessee household income 2003: $37529

Tennessee household income 2014: $44361

Difference: $6832

Florida household income 2003: $ 38,572

Florida household income 2014: $ 47,212

Difference: $8640

Oklahoma 2014: $47, 529

Oklahoma 2005: $45,000

Difference: $2529

 When comparing household income trends to national averages, the numbers do not forecast a trend that can be attributed to the states which instituted workers’ compensation reform. While all wages went up, there was no consistent percentage of a measurable increase and the increase in earnings consistently falls below the amount reported on a national scale. It is also important to note that while wages in IL appear to have decreased, they remain above the national average and above the all household income averages in the states which Gov. Rauner mentioned.

 

Looking at these results, proponents of workers’ compensation cannot make a legitimate claim that changing workers’ compensation laws directly causes or even correlates to increased wages.

 

A report released by the state of TN does note the ease at which arbitration has increased, but this again holds no direct benefit to working employees.

 

Simply, the governor’s argument, while compelling, is misleading. Yes, business may benefit from revised workers’ compensation laws, but that does not mean workers will as well. Aren’t workers the people whom the Turnaround Agenda is meant to benefit?