Governor's workers' comp and unemployment proposals worth considering

GOV. Chris Gregoire's proposals for change in the state unemployment and workers' compensation systems contain some very good ideas. Let's hope they survive the Legislature.

Workers' comp, which is run by the Department of Labor and Industries (L&I), pays the medical costs of employees injured on the job. The program's purpose is to take care of workers permanently disabled on the job and help other injured workers get well and go back to work.

The system's big costs are lifetime disability pensions. The average recipient of one of these is 51 years old and costs the state a fortune. Gregoire said Tuesday what many business people have been saying for years — that the state gives up on too many workers and gives them one of these pensions.

The results have been tax increases on employers — 12 percent this year — that act as a direct penalty on the creation of jobs. And even these increases are not covering the increases in costs, which alarmed State Auditor Brian Sonntag in a recent report.

Here are two of the governor's ideas to control costs. One is to offer a worker recovering from injury a chance to go back to work on light duty, with the state paying half his wages for 66 days. The idea is to reconnect the worker with his boss, co-workers and paycheck, instead of having him sit at home on state benefit. Oregon has proved that such an approach saves millions and is good for workers and employers both.

Another good idea is for the state to begin to manage the doctors who treat worker injuries. The level of oversight would be light at first, but over time, says L&I Director Judy Schurke, the state would "look at patterns of practice," so that "physicians who live off the L&I system" could be cut out.

Gregoire also has proposals for the state unemployment system. The most promising is to cancel a scheduled 36 percent tax increase for the part of the system's costs that is spread across all employers. Unemployment taxes also include a part that varies from employer to employer, depending on how many people an employer has laid off in the past four years.

Her proposal calls for Employment Security Department to draw down the state fund instead of increasing the tax on employers. This is not a sustainable idea — Gregoire and the Legislature should find a sustainable solution — but it can be done for a year. Gregoire's plan would reduce the fund, which now covers a healthy 14 to 15 months of benefits, by about two months.

The common idea among these three proposals is to limit the costs that have to be borne when an employer hires a worker. The greater the costs, the fewer the jobs — and this state's employers need to create as many productive and sustainable jobs as they can.