The workers comp issue is likely to heat up in the legislature — again. The big question this time: How many businesses will fight and how many will run right out of the state?
A week ago, Sacramento Bee columnist, Dan Walters, wrote about the perennial struggle over workers compensation. Labor unions, employers, insurers, attorneys and medical care providers constantly battle for a financial advantage in the area of worker related injury and payments. Walters noted that a new move would be made against employers who gained from reductions in workers comp costs under the Schwarzenegger administration.
I remember that last workers comp debate well. I was the proponent of an initiative to lower workers comp costs for businesses. Governor Schwarzenegger used the initiative to convince legislators to come to the negotiating table and work out an agreement to reform the system and cut costs.
Had the negotiation not been successful, I’m convinced the initiative would have passed. Company owners, especially small businesses, were angry. I saw it everywhere I went in trying to drum up support for the initiative. And I went everywhere. I remember a large turnout late at night in the oil fields near Taft.
Big business was concerned as well. All business spoke with a unified voice. The California Chamber of Commerce had broken precedent during the recall election by endorsing a gubernatorial candidate for the first time under the belief that California needed a business friendly chief executive who, among other things, would reform the workers comp system.
Economic development officials from other states were trying to convince California businesses to come to their states boasting of their much lower workers comp rates. States like Idaho boldly advertized their “escape from California” ads in state and local business journals.
Businesses fought back with the initiative and supported Schwarzenegger’s efforts.
If workers comp is adjusted again, if the unions, attorneys, and providers convince the legislature and governor to shift a bigger burden on business, will the business community be as resolute as before?
After being battered by the poor economy, more regulations, the threat of increased taxes, will a dramatic increase in workers comp costs convince businesses that California is hopeless for business?
It is possible that should an increase of workers comp costs occur, many businesses might just throw in the towel and respond to those ads that other states are certain to start running in the business journals again.