NCPA - National Center for Policy Analysis

Washington vs. Oregon

October 26, 2010

In the battle to promote growth and job creation, Washington state is especially important this election year.  While the Bill Gates family and government unions work together to impose a state income tax, the business community is bidding to bust the state monopoly over workers' compensation insurance, says the Wall Street Journal.

The fight is over ballot initiative I-1082, which would allow private insurers to compete in the market for insurance providing medical benefits and wage replacement to workers injured on the job.  Many large Washington companies self insure, but others are required to buy this insurance from the state Department of Labor and Industries.  

Washington is one of four states that retains a monopoly, with predictable results.

  • The average worker in Washington with a time-loss claim misses 270 days of work, twice the national average.
  • Nearby Oregon, which privatized workers' comp long ago, averages 70 days.
  • Washington's rate of awarding lifetime pensions for workers it deems permanently disabled is also the highest in the nation.
  • In 2007 and 2008, Washington pensioned 3,600 workers; Oregon pensioned 24.

There's more, says the Journal.

  • Despite a 52 percent decrease in job injuries since 1990, Washington's insurance taxes have climbed 53 percent in 10 years.
  • These premiums are borne by employers and employees, as Washington is the only state in which workers must still pay a portion of workers' comp premiums.
  • Last year the Labor and Industries department hit the business community with a 7.6 percent premium increase, essentially a $117 million tax hike.
  • Oregon hasn't raised its premiums in two decades and this year it returned $100 million to employers.

The Building Industry Association of Washington, one of the state's few free-market groups, was moved to push this initiative after the legislature again punted on reform.  If it passes, everyone wins save public unions and the plaintiffs bar.

Source: "Washington vs. Oregon," Wall Street Journal, October 23, 2010.

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