Self-Interest Dominates Workers’ Compensation Debate

Altruism has never been a widespread phenomenon, and the furious debates in Sacramento over proposals to dramatically increase benefits for injured workers indicate that self-interest is still the prevailing mode.

The proposed legislation would raise benefits for workers with short-term disabilities to as much as $800 a week from the present maximum of $224. It would also make major changes in the workers’ compensation system, reducing the role, and therefore the costs, of lawyers and doctors.

Under the proposed reforms, the state would set up special panels of doctors to determine the extent of a worker’s permanent injury if the worker and the insurance company or employer cannot agree on a doctor whom they both trust. This system, along with other procedural changes, could avoid costly contests between company doctors and workers’ doctors, who often disagree on the severity of injuries and the cost of benefits.

The present $224 maximum for short-term disabilities, reached in 1983, is among the lowest in the nation and is hardly enough for the average $400-a-week worker who is unemployed because of an on-the-job injury.

Employers, unions, insurance companies, doctors, lawyers and legislators have been embroiled for two months in the latest debate on proposals to reform the system. The outcome still isn’t clear. And it is equally unclear whether unions or workers’ compensation attorneys actually represent the best interests of injured workers.

Except for the unions, all of the other factions have an obviously selfish motive for their position on the issue. The lawyers and doctors do not want workers’ compensation reform to decrease their share of the nearly $6-billion-a-year system. Employers, who pay the costs, want their expenses to drop--or at least go no higher--despite increased benefits. Insurance companies want to take in more money and pay out less. Legislators want political credit for helping the injured, but few of them want to change the law so drastically that their political contributors will be offended.

Union leaders, ardent proponents of substantial benefit increases, have nothing to gain personally from such increases, although they might be helped indirectly if their role in boosting benefits attracts new members. Most of the attorneys involved in the arguments are those who represent injured workers. These lawyers, or their firms, also often represent unions in other legal disputes. They insist that, like unions, they are primarily concerned with helping workers.

The workers’ compensation attorneys complain that top California union leaders--even with the help of their own lawyers and experts in the field--are not competent to evaluate the complex legalese in the proposed legislation.

This lack of knowledge, the lawyers warn, may result in legislation that would actually hurt workers. They contend that the reforms would take away many of the protections that the workers’ own attorneys can best provide.

But union leaders charge that the lawyers are far more concerned about the fees that they get than about the workers themselves. The result, union officials contend, is that many union lawyers, because of their self-interest, have been fighting proposals to give injured workers the greatest single benefit increase in the history of the workers’ compensation system.

The California program began in 1917, and attempts to increase the benefits it provides have always met with stiff resistance. This year is no exception.

To overcome that resistance, there have been many private meetings between union leaders and employer representatives seeking compromises that would help persuade the Legislature to reform the present law and increase benefits.

Doctors and union lawyers whose practice includes workers’ compensation cases have been excluded from those sessions. One reason for this is that John F. Henning, head of the California labor federation, regards both doctors and workers’ compensation attorneys as “exploiters” of workers.

Henning charges that the California Applicants’ Attorneys’ Assn., whose members represent injured workers, has a program “hostile to . . . the basic needs of California’s injured workers. (The lawyers) obviously have a conflict of interest between money for attorneys and money for injured workers.”

When the doctors who specialize in such cases asked members of the California Society for Industrial Medicine and Surgery to contribute up to $5,000 each to fight the proposed reforms, Henning responded furiously: “The jackals are closing in.”

Richard Cantrell, president of the attorneys’ association and also a union lawyer, says his group is simply trying to persuade individual unions that the state federation may be making a terrible mistake in pressing reforms as they are now proposed. The reforms, Cantrell maintains, will really mean little for the average worker and will give millions of dollars to the insurance industry and employers.

“The sad part of this situation is that the attorneys who have the most knowledge about workers’ compensation have intentionally been locked out of the negotiations,” Cantrell complained.

But it is difficult to know when altruism is really the prime motive of participants in an argument. When Gov. George Deukmejian vetoed an increase last year, he claimed that because the legislation did not include reforms, among other things, he was looking out for the best interests of the workers.

Even the original idea of workers’ compensation was not conceived in altruism. The first German chancellor, Otto Von Bismarck, devised some social security programs in the late 1800s, including benefits for injured workers. But his motive was not to help workers. He saw the programs as a weapon that he believed would halt the spread of liberal, democratic tendencies in Germany. His theory was that giving workers some new, government-sponsored benefits would reduce their attraction to democratic-minded liberals and socialists.

When workers’ compensation programs followed in other European countries--and, by the early 1900s, in the United States--one prime motive was selfishness, not concern for others.

At the turn of the century, U.S. employers fought efforts by progressives to get workers’ compensation laws. But as more and more injured workers won legal battles for substantial claims, employers became worried and dropped their opposition to such laws. They agreed to the “no-fault” benefits system for on-the-job injuries. In return, they got sharp limits on the amount of money an injured worker could receive.

It is difficult enough for the average worker, and for me, to understand the complexities of 70 pages of legal language ostensibly designed by pro-worker union representatives to increase ridiculously low benefits for injured workers. But it is almost impossible to know what to believe when union leaders and union lawyers give diametrically opposing views of the proposed changes.

The self-interest of the lawyers does diminish their credibility, but I know many of them to be attorneys of integrity.

It is too late to do anything about it for this latest effort to boost workers’ benefits. But it would help if the unions and their lawyers could begin now to reduce their mutual mistrust. Then the hundreds of thousands of workers injured each year would be more likely to get advice that truly represents their best interests.

Low-Income Need Help

Low-income workers almost never get the attention they need. The minimum-wage law, which is supposed to be “protecting” about 15 million workers whose income is at or below that level, has not been changed since 1981, when it reached the present rate of $3.35 an hour.

Congress is not even considering an increase, despite inflation over the past six years. And the California Industrial Welfare Commission, which could raise the state’s $3.35 minimum, is holding a series of extensive hearings around the state before deciding what it wants to do.

However, even though it would take a minimum of $5.31 an hour to bring workers to the same level that they had in 1968, Deukmejian’s appointees almost certainly will do nothing at least until next year. And the odds are overwhelming that they will not approve any hike then.

The Legislature is considering a boost in unemployment benefits--now a maximum of $166 a week--but chances of an increase are, at best, slim.

The working poor depend on the minimum-wage law to help them. Jobless benefits are inadequate. Increases in both are urgently needed and long overdue.