Workers’ compensation laws are designed to ensure that injured workers receive some compensation for their injuries and during their recovery. Because many injured workers are out of work for week or months, they would otherwise need to go without income and be unable to provide for their families. Employers are always attempting to lower their costs and increase their profits.
Workers’ Compensation insurance premiums are paid by employers, so they have a strong incentive to weaken the payment of benefits to injured workers, as they hope it will lower the cost of their workers’ compensation premiums. This argument is often shrouded by claims that lowering the cost of insurance will create jobs. This red herring makes a powerful argument because it is often difficult to prove otherwise.
If a state lowers the cost of workers’ compensation insurance, and the economy is booming, there will be more construction jobs, but it is very unlikely that the lower workers’ compensation awards caused the increase in jobs. No business hires contractors to construct a new building simply because some small component cost of the overall project has decreased. They must need the building for their own business purposes.
In New York, attacks on their Scaffold Law have been turned back for this legislative session, and one argument raised was the claim that when Illinois repealed its Scaffold Law, construction jobs increased 25 percent. They failed to point out that at the same time in New York, construction job increased 29.6 percent with the Scaffold Law untouched.
Workers’ compensation laws provide essential support to injured workers in New Jersey, New York and all states, and weakening those laws would eventually lead to higher costs for taxpayers.
Source: Syracuse.com, “Scaffold Law protects New York workers: Commentary,” Edward J. Walsh, June 7, 2013