There’s an old saying that
”
One man’s trash is another man’s treasure.
”
A trip to a neighborhood garage sale proves the point. This is
not an adage, however, that one would expect to apply to
California’s business environment.
There’s an old saying that “One man’s trash is another man’s treasure.” A trip to a neighborhood garage sale proves the point. This is not an adage, however, that one would expect to apply to California’s business environment.
In many ways, however, this time-tested cliche is appropriate because the Legislature and then-Gov. Gray Davis let California’s business climate erode. One of the biggest failures was that they failed to address a growing problem: the workers’ compensation system – one that the business community had been complaining about for several years.
Businesses such as Patterson Frozen Foods, a Stanislaus County business, saw their workers’ compensation premiums more than triple in the last four years. The high workers’ comp premiums have eroded the company’s profits over the past four years as well as make it virtually impossible to hire new employees.
Workers who survive job losses due to the increased cost often bear the burden of skyrocketing premiums as well. Workers often are affected with losses in cost of living allowances, raises and job benefits.
As a result, in just five years, workers’ compensation costs in California skyrocketed from $11.3 billion to $24.9 billion. This is in spite of the fact that most California businesses have safety records that are better than ever and fewer on-the-job injuries are being reported.
Because the Legislature neglected the workers’ compensation crisis, other states are taking advantage of our situation. For example, the Nevada Commission on Economic Development has started an advertising campaign known as “Expand2Nevada.” Their newspaper ads and Web site, funded by the State of Nevada, target California’s business community and focus on the “broken workers’ compensation system.”
It isn’t just businesses suffering as a result of this crisis. Agencies at all levels of government have seen huge increases in workers’ compensation premiums. In three years, state and local governments have seen premium increases of 18 to 55 percent.
The City of Turlock has seen its workers’ compensation costs triple in just two years from 2000 to 2002 and the City of Salinas reports that workers’ compensation costs have increased 250 percent from 2001 to 2003.
To keep businesses from cutting jobs, closing or moving out of state and to provide much-needed relief to local governments, I’m supporting a series of bills proposed by Gov. Schwarzenegger that will save employers and local governments millions – while at the same time protecting the needs of employees who suffer work-related injuries.
Gov. Schwarzenegger gave the Legislature a March deadline to complete the reforms so businesses around the state can begin to realize a drop in premiums this year. If this happens, we can hopefully save many of the jobs that we would otherwise lose. If reform does not happen, the governor has vowed to put his proposal on the November ballot and let the voters take action.
Jump-starting California’s economy requires that we make our business climate attractive and put people back to work. Reforming the workers’ compensation system is an essential first step to making this happen. But if we do not reform workers’ compensation, we will be kicking California jobs and businesses to the curb where other states will be more than willing to take them and turn into a treasure.
Senator Jeff Denham represents the California 12th Senate District.
