Editorial: Industrial insurance reform hits labor hurdle

Washington’s industrial insurance system ranks as one of the costliest in the nation, and from the mischief that unfolded this week in Olympia, union-friendly lawmakers want it to stay that way.

It’s disappointing to see that Spokane Rep. Timm Ormsby joined in. The 3rd District Democrat and his confederates brought forward a handful of bills that would have made the system even more expensive and, compared with systems in most other states, less appealing to any business thinking of setting up shop in Washington, now or in the future. The point, it appears, was not to enact the measures – which would do workers only nominal good – as much as to thwart a genuine and greatly needed reform that could help stabilize the business climate to the benefit of not only employers but also employees and would-be employees.

The measure that organized labor is determined to block would allow someone permanently disabled from a workplace injury to choose between a lifetime pension (the only option now available) and a negotiated up-front settlement (which most states allow but Washington doesn’t). The measure would require that the individual be counseled, that the settlement be in the worker’s interest, and that the final decision be the worker’s.

Such a system promises savings because lifetime pensions require the state Department of Labor and Industries to maintain the bureaucratic infrastructure that processes the payments, reports and other paperwork. Negotiated one-time settlements avoid many of those overhead costs.

That system, known as a “compromise and release,” would put Washington businesses on a little more equitable footing with competitors in other states. It would take nothing away from injured workers while giving them a choice they don’t have now, yet organized labor has consistently fought the idea.

This year was no exception. When Rep. Deb Eddy, a King County Democrat, tried to salvage the legislation during the waning days of the 2011 regular session, Ormsby and his allies went to work, introducing measures that would have made a troubled system worse. One would have encouraged a proliferation of lawsuits that the workers’ compensation system was designed to avoid. Ormsby’s measure would have transferred to employers the modest share of the system’s cost now paid by workers.

As business representative for the Building and Construction Trades Council, Ormsby understands how badly our region needs an infusion of investment and jobs. Getting them will be hard enough with the impediments now in place and near impossible if more are added.

The strategy that was on display in the Legislature this week may have been designed to benefit organized labor as a political institution but not of laborers.

Spokane’s unemployed and underemployed deserve better.