The Department of Labor & Industries announced yesterday that workers' comp wage and pension benefits will go up a tad over 5% starting July 1st as a result of wage inflation. From the announcement:
Workers currently receiving Washington workers’ compensation wage-replacement or pension benefits will receive a 5.018 percent cost-of-living increase effective Tuesday, July 1. State law requires that benefits be recalculated each year to reflect the change in the state’s average wage from the previous calendar year.
The fact and timing of this announcement underscores some of the difficulty with Washington's labor-friendly wage calculation system. Using wage data from the previous calendar year, and including high wages in industries (think: tech sector) that have comparatively little workers' comp claims experience, drives results that seem entirely out of place.
In other words, at a point right now where consumers are anxious, the state and national economy is slow, unemployment is rising, and companies are forced to consider trimming payrolls, does a 5% increase in benefits seem justified by current economic realities?
Washington already has among the highest workers' comp benefits in the country. And with higher benefits come higher payroll taxes for employers. The tax level for 2009 is being developed now and will be announced this fall. Expect yesterday's announcement to play a role.
