Next time you hear some company threaten to move overseas because of high labor costs, just remember this.....

Capitulate.

We shouldn't, can't and won't compete against this....:
http://www.dailymail.co.uk/news/article ... awake.html

It's an amazing picture of a Microsoft workforce working under pathetic working conditions.

Stay tuned.

Julius Young
www.boxerlaw.com

Those of you from other parts of the state have likely never had the pleasure of driving from Oakland to San Jose at rush hour.

That's where I found myself this morning, headed to an appearance at the San Jose WCAB.

It always amazes me that traffic can be so clogged in one of the nation's most important incubators of technology and innovation. Many of the world's most visionary companies are located in the area, but commuter traffic is often a crawl.

But there's more time to gaze at overpasses. There today were a gaggle of tea-partiers, holding signs decrying too much government. But what would they cut? Medicare? Social Security? Mine safety? Wage and hour enforcement? Wish someone would survey them to get some concrete answers.

And there's more time to read billboards.

And lo and behold, there was a huge billboard, emblazoned with "No workers' comp? That's criminal".

Sponsored by the Santa Clara County District Attorney Dolores Carr, these ads are designed to educate that not carrying workers' comp is a crime. There are 21 of these billboards.

Good ad campaign.

In case you missed it, here is a reprise of my post, "It's the Employer Fraud, Stupid-Part 1"
http://www.workerscompzone.com/index.ph ... 670342ae49

And, "It's the Employer Fraud, Stupid, Part 2":
http://www.workerscompzone.com/index.ph ... 818-110358


Julius Young
www.boxerlaw.com

The WCIRB (California's Workers' Compensation Insurance Rating Bureau) has just released its report on workers' comp through 12/31/09.

These reports are always a treasure trove of information about how the industry is doing.

I'll be sharing some reflections in upcoming posts.

A couple of snapshots in the interim........

The average insurer rate for 2009 was $2.35 for every $100 of payroll. That compares with $2.37 in 2008 and $2.46 in the last half of 07. By comparison, in 2003 the rate was $6.45 for every $100 of payroll.

That's the kind of comparison that gets the CalChamber enthused.

Written premium declined to $8.9 billion ($6.3 billion when deductible credits are factored in). In 2006 the premiums were $16.4 billion (or $11.3 billion when factoring in deductible credits).

It's striking to see how premium has declined so much over the past few years, presumably reflecting the poor overall economy/financial meltdown and perhaps reflecting a continuing shift in the mix of California businesses.

More to come. Meanwhile, here is the WCIRB report:
https://wcirbonline.org/wcirb/resources/data_reports/pdf/123109_insurer_exp_report.pdf

Julius Young
www.boxerlaw.com

California workers' comp lawyers see very few mining injuries. Mining is a small sector in the California economy, and below the surface mining is negligible.

Our hearts go out to the families of the injured and deceased miners in the recent West Virginia Upper Big Branch mine disaster, where some 29 miners were killed.

As the story unfolds, we learn of a company that repeatedly cut safety corners and a mine safety enforcement bureaucracy that was outmatched by the coal company, Massey Energy company.

Massey has been notable for its union-busting efforts.

In a report written for Truthout.com, Art Levine tells the story of Massey and the shrinking of the United Mine Workers. Levine notes a "safety gap" between the safety records at union mines and non-union mines:
http://www.truthout.org/missing-lesson- ... death58501

Also worth checking out is the film "Mine War on Blackberry Creek", a documentary which details some of the efforts by Massey CEO Don Blankenship to destroy unions in the mines. You can find a link to stream the video on the following website:
http://www.annelewis.org/

Stay tuned.

Julius Young
www.boxerlaw.com

There's growing focus on public employee pensions and concern that those liabilities are unsustainable.

For example, today several California newspapers focus on budget horrors befalling California counties with large pension liabilities.

The Fresno Bee's piece by Philip Reese and Brad Branan notes that San Mateo county's pension liabilities exceed its public works spending, that San Luis Obispo County spends more on pensions that prosecuting criminals, and that "Fresno County will pay nearly as much into its pension plan as it does for it's Sheriff's office, which can't afford to keep inmates locked up."

Reese and Branan write:
"The initial logic of increasing retirement benefits to retain quality employees has been turned on its head: Paying for those benefits is forcing local governments to lay off employees-and cut programs."

The Bee study claims that a review of the state's 80 largest city and county governments reveals $28 billion in unfunded liabilities.

I know many of us are anesthetized to talk of budget shortfalls and long term deficits. But that's $28 billion.

Here's the Bee piece:
http://www.fresnobee.com/2010/04/10/189 ... ments.html

In Stanislaus County (which has had nearly 20% unemployment and thus a great need for social services), the pension system is only 71% funded, leaving a shortfall that is more than twice the size of the county's general fund budget:
http://www.modbee.com/2010/04/11/112320 ... -cant.html

Governor Schwarzenegger requested a study of public pension liabilities. Here's the report by the Stanford Institute for Economic Policy
Research:
http://www.stanford.edu/group/siepr/cgi ... oke_pb.pdf

It's very unlikely that we'll see the federal government or the state coming up with bailouts. The money is not there.

Chatting the other day, one colleague remarked that his investment banking contacts are worried about a wave of defaults by some major state or municipal governmental entities. Another noted that the bond insurer market has been decimated.

The focus on the pension issues may well be perceived by some in public employee unions as merely another well-orchestrated attack upon those in public service. But if these projected numbers are even close to accurate, then this is an issue which is not going to go away.

Some public entities have considered outsourcing:
http://calpensions.com/2010/04/02/outso ... ion-costs/

Readers who are aware of other studies or projections are invited to send them to me so they can be posted. This will be an issue in this year's governor's race. (UPDATE: CalPERS AND CalSTRS have responded to the Stanford study:
CalPERS:
http://www.calpersresponds.com/issues.p ... licy-brief
See also this analysis:
http://calpensions.com/2010/04/12/stanf ... ion-funds/

The reality is that many in public service either forgo more lucrative careers elsewhere or assume great personal safety risk on behalf of the public. They need to be paid fairly.

It's just another piece in the puzzle of the conundrum of what services we the people need and are willing to tax ourselves to pay.

Stay tuned.

Julius Young
www.boxerlaw.com