Deukmejian Appeals for Support of Worker Compensation Reform

Times Staff Writer

Gov. George Deukmejian appealed Thursday to a highly receptive group of 200 Los Angeles apparel industry executives for support in his efforts to pass legislation reforming the worker’s compensation system.

Deukmejian, addressing the group over a lunch of chilled salmon at the downtown California Apparel Mart, urged the fashion industry executives to “do everything you can” to support the worker’s compensation legislation because costs of the $8-billion system are among the highest in the nation, while benefits to injured workers are among the lowest.

The legislation, the product of months of private negotiations between labor, business and insurance carriers, is being carried by Assemblyman Burt Margolin (D-Los Angeles). Margolin, who agreed to carry the bill although he still has not endorsed the plan, will begin legislative subcommittee hearings on the proposed legislation next week in Sacramento.

Deukmejian unveiled the proposal last month. Under the plan, maximum weekly benefits for injured workers would increase from $224 to about $511 by 1992, the year it would take full effect. The total benefits to employees would increase by about $2 billion over three years, according to estimates.


Restrict Freedom

Businesses, which pay the entire cost of the workers’ compensation system, favor the plan because it would restrict the freedom of workers to choose their own doctors. Businesses believe legal costs would also be reduced because payments for psychiatric stress injuries, now a chief point of litigation, would be eliminated.

The fashion executives interrupted Deukmejian’s speech with applause when he mentioned the proposed changes in the worker’s compensation system.

Deukmejian called the maximum weekly benefit of $224, which has not been raised since 1983, “unfair” to workers because it is too low and said overall costs of the system were “a major concern” because they are so high.


Responding for the other side, Don Green, a Sacramento-based lobbyist for the California Applicants’ Attorneys Assn., said, “It’s ironic that the governor gets up in front of this particular group to say that this would be good for their workers. It’s good for employers, it’s particularly good for insurance carriers, but it’s a travesty for workers, particularly workers in the garment industry who make minimum wage.”

Green noted during a telephone interview that the agreement worked out between union leaders and employers would extend the maximum benefit increase only to workers who now receive $8.40 an hour. By 1992, when the bill takes full effect, workers would have to be earning $19.60 an hour.

‘Hoops and Hurdles’

The attorney said that while low-paid workers would not benefit by the increases in the maximum benefit, they also would suffer because the proposed legislation sets up new “hoops and hurdles” for them to go through before they qualify for any benefits.


Deukmejian also discussed the state’s minimum wage, a sore point among industry executives because California’s minimum wage is higher than other states. While some garment workers are members of unions and receive relatively high hourly wages, many others work at the state’s minimum wage of $4.25 an hour.

Margo T. Wilson, executive director of the Coalition of Apparel Industries in California, which sponsored the luncheon for Deukmejian, said, “We would like to see the minimum wage raised everywhere in the country because we feel California companies now are operating at a competitive disadvantage.”

Deukmejian told the fashion industry executives that he is asking Congress and President Bush to raise the federal minimum wage from the current $3.35 an hour to at least the $4.25 paid in California.

The governor said “no state should be placed at a competitive disadvantage” because it raises the minimum wage.


Negotiations currently are under way in Washington between Congress and Bush over just how high the minimum wage should be raised. The House and Senate recently compromised on a raise to $4.55 an hour, but the White House said that was too high and warned that Bush would veto legislation raising it to that level.

Major Issue

During his speech, Deukmejian was silent on another major legislative issue of concern to the fashion industry executives: proposed legislation by Assembly Speaker Willie Brown (D-San Francisco) that would require firms employing five or more employees to provide health insurance plans to their workers.

Bernard Z. Brown, president of the fashion industry coalition, said after the speech that he was disappointed that Deukmejian did not take a position on the health insurance bill. In introducing Deukmejian, Brown said that even though the Assembly Speaker’s bill has undergone substantial amendments, it is “still very difficult to swallow” because of “the high cost” to clothing manufacturers of providing health insurance to employees. The coalition president said his group is going to try “very hard” to defeat the bill, which is pending in the Assembly Ways and Means Committee.


Brown said in general that Deukmejian’s remarks were well received by the executives, noting that it was the first time Deukmejian or any other governor made a special trip to downtown Los Angeles to talk to industry officials.