Tuesday, May 26, 2009, 03:44 PM - Political developmentsUnless you've been living as a hermit on a remote mountaintop, chances are you've run into friends and family who've been laid off this year.
Even friends who were living high on the hog in recent years.
Workers' comp claim frequency has been plunging in California. While layoff notices may provide incentive for some to pursue claims they wouldn't have pursued otherwise, many workers are loathe to pursue comp claims when their jobs are in jeopardy.
Many of the workers I've seen over the past year are very concerned about the future of their jobs. They see companies retrenching and downsizing.
Undoubtedly some of those companies are fighting for their lives. Some are bleeding red ink.
Many are fighting to cope with changes in their business model that have been dictated by recent events. Others are just evolving and innovating, with some workers being in the wrong place with the wrong skills at the wrong time.
Some are outsourcing. In our little "comp community", I've known a number of comp law firms that outsourced their dictation/word processing to India.
A big argument in past debates over workers' comp has been the notion that California could lose jobs to other states with less worker-friendly benefits. It's a concern, though never very well documented.
Labor advocates believe such arguments are a ruse for surpressing humane and adequate benefits for all California workers. In Los Angeles there has been a successful effort to organize car washes, which all too often have been uninsured for workers' comp and systemic violators of wage and hour standards.
In any event, for many folks the current economic situation is bad.
Today I saw a worker who had recently received a layoff notice under the WARN act. At his age, it's not clear whether he will ever be competitive for a job which pays even half of what he has made.
Last week, at the deposition at a large Northern California bulk building materials firm, I asked the manager whether the federal stimulus money was tricking down to get regional infrastructure projects rolling. The answer? No. The company recently laid off more than a dozen workers who supply concrete, rock, and other base buildng materials.
Federal deficits may be rising fast, but if "stimulus money" is coming, it's slow.
So it's not surprising that companies are turning to layoffs.
Do companies (big and small) have some ethical duties toward their workforce? That's the argument made by Randy Cohen, who writes a New York Times Magazine article on ethics. Here's the link to Cohen's piece:
http://ethicist.blogs.nytimes.com/2009/ ... amp;st=cse
Some readers may find such considerations quaint. After all, we live in a world where capital and information technology are very mobile. Free trade ideology and the emergence of multiple world financial centers have accelerated trends toward trans-national capitalism.
And innovation may be painful.
Critics of high executive pay have gotten considerable attention in the press. But ethics-and corporate ethics in particular-get very little focus.
Corporations clearly have obligations to their shareholders, but Cohen raises issues about the obligation
corporations have to their workers and their communities.
I'm a CNBC fan, but it's not an issue you'll see being raised often by the talking heads on Fast Money or Mad Money. The business press does (and will) focus on return on investment.
But we're getting to the point as a country where we're setting up a circular firing squad, as layoffs breed more and more economic contagion, and bigger and bigger deficits.
Here's a thought provoking piece from columnist Bob Herbert on our crumbling foundation:
http://www.nytimes.com/2009/05/26/opini ... rbert.html
Herbert thinks we need to keep our workforce busy rebuilding our country before it's too late. Unfortumately I don't see the "stimulus' as meeting Herbert's vision. What do you, dear reader, think?
Just some thoughts for my readers as we interact with workers and employers.......
Meanwhile, those of us "stakeholders" toiling in the vineyards of workers' comp press onwards.
(have feedback? a gripe? a tip? a vision? you can share it with me at firstname.lastname@example.org)
Sunday, May 24, 2009, 10:13 AM - Political developmentsI've got to start doing something else first thing on Sunday mornings.
Perhaps I should take up Yoga. Read those P.G. Wodehouse novels I always promised myself. Learn to make a better beignet. Make coffee, put on ambient music and sit by the window looking at a book of Richard Diebenkorn's Ocean Park paintings. Stare at the water.
But I'm in the political junkie habit.
These Sunday morning political talk shows are too depressing. Is Iran seeking a bomb? Of course. Do we have a workable plan for Afghanistan? Yes, but not really. Will California get a federal guarantee so the state can sell debt to avoid bankruptcy? No, but maybe yes. Is the USA on the verge of losing its credit rating? Yes. Are we closing Guantanamo? Only if we can find another place like it, but NIMBY.
Perhaps the media should just abandon the talking head format. Just let opposing groups wrestle for primacy.
Ultimate fighting promoters could make a bundle if they could get Dick Cheney in the ring with the ACLU's Anthony Romero. Let the one who can get the other in a headlock win! Hannity and Rachael Maddow can be in the wings, ready for tag team duty. Just like Bobby Flay's "Throwdown", only physical.
Here in California every interest group is starting to wrestle to protect turf. Everyone is waiting to see how the budget debacle affects their bailiwick.
And so what awaits the comp world? It's not clear what cuts await the DIR.
There's still nothing much publicly surfacing about a possible sale of SCIF's book of business, an idea (essentially a commission on sale of loss reserves?) floated by the Schwarzenegger administration. But the idea was questioned by Legislative Analyst Mac Taylor, which probably means the idea is in some trouble already.
Meanwhile, like the swallows of Capistrano and the Monarch butterflies of Pacific Grove, it's time for that annual treat from the California Chamber of Commerce. The CalChamber's "killers" list.
Job killers, to be exact. On the list are the major bills sponsored by labor and applicant attorneys to advanced the interests of disabled workers. Here's the list:
http://www.calchamber.com/GovernmentRel ... s2009.aspx
The Governor has been quite willing to veto bills that were on past versions of this list. 2009 is unlikely to be different.
Enjoy your Memorial day weekend.
(have feedback? ideas you want to share? you can reach me at email@example.com)
Thursday, May 21, 2009, 10:12 PM - Political developments(Governor Schwazenegger, clad solely in jockey shorts, kneels on the rug in his Pacific Palisades bedroom, looking out the window). Muttering to himself, his consciousness streams and riffs with his heaving chest....
"Santa, Dear Santa, I need you now. Need my stocking filled with some goodies from my new best friend, Barack. The voters sure ain't in a Santa mood. They busted my chops. So glad I decided to be in D.C. yesterday.
But what to do?
Geithner says that federal loan guarantees to California will require Congressional approval. Barack's got to know how crazy this is. Without some bridge financing, we can't pay our bills next month. This ship is sinking.
Somebody's gotta get Pelosi and Harry Reid on board with financing guarantees. Forget the waterboarding stuff and this crazy Truth Commission stuff. Do you really want them looking at what you knew and what you did about torture? Panetta pretty much already backstopped the spooks, anyway.
Most folks wanna hear about surfin' rather than waterboardin' anyway.
Surfin' Safari and Two Girls for Every Boy and all that good old California dream stuff. That's what people want. I thought I was going to give them that dream again. Collyforneeya!
Spending my last years in office keeping this place on life support.
And those little jerk-offs in my own party. Putting me, and even my beloved California Chamber, on the list of losers:
http://www.flashreport.org/commentary0b ... 8162202504
And can you believe the goofballs that Fleischman calls "winners of the special election"?:
http://www.flashreport.org/commentary0b ... _offsetP=0
Oh, well. No more Mr. Nice Guy. I can reinvent myself as the ultimate slasher! I'll slash and burn and cut and blow up boxes like you've never seen. I really will go out as The Terminator.
That'll show some of those purple-shirted union folks who opposed my intiatives. Overplayed their hand. Wait till I get a shot at their IHSS funding. Welfare cuts, here we come:
http://latimesblogs.latimes.com/lanow/2 ... -aid-.html
By the time they get their California Constitutional Convention or their
budget vote initiative, I'm going to have smoked em.
Gonna Budget Cut like its 1999! (apologies to Prince and KQED's John Myers....)
In 99 K-12 education was $26.3 billion; now it's $36.3 billion. Prisons were $3.3 billion in 99; now $9.6 billion. Higher education was $7.7 billion in 99; now it's $11 billion.
Workers' comp better be glad they got some user funding. I'd love to get my hands on some of that targeted dough. We'll be looking at borrowing from them. Oh yeah.
Slash, baby, slash.
That's my new mantra. I'm not a pussy and I won't go out as one. Let the groveling and whining begin. I'll dictate life and death of scores of programs.
But Barack, I need a short term Santa. Will you help?
Sunday, May 17, 2009, 09:09 AM - Political developmentsCould SCIF be for sale?
That's one idea that's been mentioned by Governor Schwarzenegger as he announced possible budget solutions to the current crisis, particularly if the Tuesday vote goes as predicted, with Props 1A, B, C, and D being rejected by the voters.
SCIF would join California landmarks targeted by the Guv: San Quentin, Cal Expo, Del Mar fairgrounds, the L.A. Coliseum, etc. But as bloggers Jerry Roberts and Phil Trounstine have suggested, why stop there?
The list could be expanded to some other gems, including Hearst Castle, Fort Tejon, Old Town San Diego, Asilomar and the La Brea Tar Pits:
For the most part it ain't gonna happen. With a few exceptions, unloading some of these properties would be exceedingly difficult and would constitute the ultimate gimmick to solve structural budget problems.
Yet, Sacramento is in crisis. I was at the legislature last week and I have never heard so much panic and doom and gloom. Legislators are petrified that they will need to ax programs near and dear to their core constituencies.
But back to SCIF. Could it be sold in whole or part? Could it's "book of business" be sold?
Exactly how this would work isn't clear. It's unlikely anyone would want the "runoff" exposure attached to past underwriting, particularly if loss ratios are deteriorating for that book of business.
Would other insurers pay for access to SCIF's small business base or its
underwriting and claims handling staff?
This observer is having a hard time wrapping my head around that concept. Keep in mind that SCIF's market share has plumented over the last 5 years and is now probably less than half of where it was before the 03 and 04 reforms. "Safety groups" have been a problem for SCIF.
SCIF is a hybrid, subject to special rules. Recent efforts to furlough
SCIF personnel were rejected by the courts.
The California Constitution includes language providing for a state compensation insurance fund:
SCIF goes back to the time of the Boynton Act, in the early 1900s.
For a history of SCIF, click here:
So any sale of SCIF or it's "book of business" might involve issues under the California Constitution as well as union contractual issues and State Personnel Board issues.
All of that could make it a minefield even if there was a ready buyer or there was the legislative will to pursue this.
It's clear that we're on the verge of some previously "unthinkable" solutions, however.
Take a look at this piece by Dan Weintraub of the Sacramento Bee that
summarizes the enormity of the problem:
http://www.sacbee.com/325/story/1866188 ... ia%20Forum
Here's a good summary of the cuts announced that might affect the disabled community:
http://www.californiaprogressreport.com ... eas_1.html
Stay tuned. I'll continue to cover this issue.
Saturday, May 16, 2009, 08:05 AM - Political developmentsWhile some of you use a warm Saturday morning to clean out the garage
or get ready for Little League games, others may be getting their Bay to Breakers race costumes ready.
But for those of you in the comp community who prefer a cup of coffee and political ephemera, note that next year's Democratic race for governor is looking less and less likely to be won by anyone from Southern California.
We have the fascinating possibility that the next Governor will be one of 3 Bay Area Republicans or a Bay Area Democrat. In the past 30 years our governors were mostly Southern Californian (Reagan, Deukmejian,
Wilson, Davis, & Schwarzenegger; Jerry Brown has ties to several locales).
L.A. Mayor Antonio Villaraigosa has been getting some exceedingly bad press recently. The kind of press that would make it hard for him to get any traction in a statewide race. Whether that will dampen his aspirations may be another story. Villaraigosa could figure that he starts with a shot at the expanding Hispanic Democratic vote.
Villairaigosa is on the cover of the latest edition of LA Magazine, with the headline "Failure....So Much Promise, So Much Disappointment".
Take a look at this piece by Ron Kaye, former editor of the Los Angeles Daily News, "Tony V's Governor Bid Won't Get Off the Ground"
http://calbuzzer.blogspot.com/2009/05/l ... nt_16.html
My next post will be on the SCIF "sale".
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