1%

Betcha thought I was going to write about the 1% versus the 99%.

No, today the 1% in the news is the 1% that CalPERS earned during its fiscal year that ended June 30th. CalPERS is working off of projections of over 7% annual return per year, so returns of a mere 1% can cause severe funding gaps in a system that is already underfunded.

Lately we've seen municipal bankruptcy filings by Stockton and San Bernardino, so possible future problems at CalPERS and ongoing funding shortfall in California's unemployment fund aren't welcome news.

This is all background noise for California's workers' comp system, but it all has potential effects as workers' comp does not operate in a vacuum.

Worthy of your attention is a study highlighted in a New York Times article today on the State Budget Crisis Taskforce. Here is a link to that study, which compares the long term budgetary challenges of many of the largest states including California, Illinois and Texas:
http://www.statebudgetcrisis.org/wpcms/ ... e-Full.pdf

The article in The New York Times, titled "Fiscal Crisis in States Will Last Beyond Slump", by Mary Williams Walsh and Michael Cooper, can be found here:
http://www.nytimes.com/2012/07/18/us/in ... nted=print

Stay tuned.

Julius Young
www.workerscompzone.com
www.boxerlaw.com

Fireworks are a'poppin.

Maybe a few are celebrating discovery of the Higgs boson particle.

Bust most are folks celebrating their concept of freedom.

According to a recent NBC News/Wall Street Journal Poll, 61% of Americans feel the country is on the wrong track. But that's not going to stop them from celebrating America's independence. We're an optimistic people.

Attendees at the CAAA summer convention in San Francisco that wrapped up a few days ago saw no fireworks.

But there was a fair dose of optimism about the future.

Rosa Moran spoke about success in eliminating backlogs in the QME system. Efforts to schedule intensive WCAB lien calendars later this year are
under consideration. Moran referenced meetings about revision of the PD schedule but gave no indication as to the status of that effort.

Both Moran and Christine Baker noted that additional judges had been hired and that the department had filled positions, though budget cuts will place some constraints on the DWC that the department will have to work
around.

The WCAB was well represented, with Chairperson Ronnie Caplane being joined by new Commissioner Marguerite Sweeney as well as by Commissioner Deidra Lowe and Commissioner Alfonso Moresi. The WCAB still has two vacancies awaiting appointment by the Governor, and no one was able to predict with confidence when those will be filled.

But the collegiality of the current board and the extensive practical experience in the comp system of its members stands out to this observer.
Moreover, strong, competent women are clearly in the forefront in setting policy both at the administrative and judicial level in California workers' comp.

Interestingly, there was no mention of a possible comprehensive workers' comp reform scheme which may surface later this summer. And there were no questions from the audience addressed to Ms. Moran or Ms. Baker about
whether the DWC is aware of the status of those negotiations, has a position on them or indeed has helped staff development and drafting of those
reform notions.

The DWC listening tour is over. The legislature will be on July recess.

Will it be a quiet August, or will the fireworks appear then?

Stay tuned. In a coming post I'll be taking a close look at the QME process, particularly Rule 35 and its relation to Labor Code 4062.3. That's at the heart of an issue over what are the rules for attorney advocacy letters to doctors, an unsettled legal issue following a much criticized 2010 decision known as Ferniza v. Rent A Center.

Julius Young
www.boxerlaw.com
www.workerscompzone.com

We may see some frowning faces behind the counter at the WCAB district offices.

California's budget crisis has resulted in Governor Brown entering negotiations with various state worker unions, of which SEIU Local 1000
is the largest.

Many of the clerical employees at the WCAB are members of Local 1000, which has around 93,000 members.

It's been unclear whether we would see another round of furloughs as occurred under the Schwarzenegger administration or whether there would be a 4 day workweek. Brown had proposed a 9.5 hour workday for 4 hours per week.

Instead, the deal apparently calls for a 5% salary reduction but allows for flexibility in time off.

Union members will be voting on the package this week.

Should the union membership vote to opposed and the deal fail, presumably furloughs or layoffs would be imposed.

Currently there has been no announced deal with the union which represents workers' comp judges.

Clerical staff and judges at the WCAB aren't immune to the economic challenges facing state government and many California workers.

But pay cuts do have heavy affects on many of those workers at the WCAB.

So if you see a frown now and then, that may be why.

Here is a link to the SEIU Local 1000 website which has more on the proposed deal:
http://seiu1000.org/2012/06/breaking-ne ... -state.php

Stay tuned.

Julius Young
www.workerscompzone.com
www.boxerlaw.com

The last several weeks I've had to follow the California workers' comp scene from afar.

That's because I was traveling in Asia. It's always interesting to engage another culture and see one's own through that other lens.

One can see wacky trends. For example, the nerdy girl look seems to be quite in vogue. Even girls who don't need glasses were wearing glass frames without......glass.

But what about more substantive stuff?

California's high speed rail venture is looking quite wobbly now. The Central Valley route under consideration and the economic assumptions of the project are questionable. But a ride on the Hong Kong airport train or Taiwan's high speed rail makes it crystal clear that high speed rail is a concept worth fighting for.

Like China, Taiwan has been in an infrastructure building boom. Freeways, subways and other transportation projects appeared to be in process al over Taipei and Hong Kong.

Here in the Bay Area, traffic often is snarled between San Francisco or Oakland and Silicon Valley. Taiwan's Silicon Valley is Hsinchu, about the same distance from Taipei as San Jose is from San Francisco. Yet, Taiwan's High Speed Rail zips passengers to Hsinchu in about 20 minutes, all in air-conditioned comfort with wi-fi.

There's plenty of shave ice with red beans awaiting as you disembark.

In Hong Kong an efficient train will whisk you off to Hong Kong Disneyland.

The huge Computex trade show was on in Taipei while I was there, and the HSR as it is called was filled with tech folks making their way to and from Hsinchu.

Hong Kong and Taipei are among earth's most densely populated cities, however.

So building Asian high speed rail clearly was a logistical feat, but one destined for success, with a huge potential ridership base.

One can't say the same thing about a California high speed rail plan that would begin by linking some smaller towns south of Fresno.

The urge to build more miles and at cheaper cost in the Central Valley may make sense to some planner or bureaucrat, but the risk is that even if the plan proceeds, it will be a train to nowhere with no riders.

And ultimately a system which never gets built.

I'll be sad if California's high speed rail never gets built. Should that be the case, it would appear to be a collective failure of imagination.

We can do a lot better than we are doing.

Julius Young
www.boxerlaw.com

It's a strange time.

There's a lot of populism in the air. Folks on the left and right are suspicious of big money.

But unions have not been able to capitalize on these conditions.

Unions are seen by many as part of the problem, particularly public worker unions. Labor suffered a grievous loss in Wisconsin after staking a large amount of political capital on the recall of Scott Walker. Any alliance between the union movement and the occupy movement fizzled.

Here in California the role of unions is about to come to a boil. In November an initiative will be on the ballot which would prohibit direct union contributions to individual candidates and which would limit use of payroll deductions for political purposes.

The effect would be to limit labor union political power in California. While some independent expenditures could still be undertaken by unions, there would be significantly less money for them to distribute.

An article by Jon Ortiz in the Sacramento Bee notes that:

"Last year, public-sector and general-trade unions contributed $2.7 million to California political candidates and causes, according to campaign finance tracker FollowTheMoney.org. Business interests, from the telecommunications industry and hospitals to computer firms and beer companies, gave $4.3 million."

The initiative is sponsored in part by Charles T. Munger, Jr., a Stanford physicist whose father is a partner in Berkshire Hathaway with famed investor Warren Buffett. Berkshire Hathaway owns insurers who write significant amounts of California workers' comp.

The fight over this initiative will be huge, given that a loss could cripple the political power of California unions and drastically change the California political landscape.

A recent article in the New York Times noted that in New York state there are tensions between public unions who oppose pension reform and building trades unions that are concerned with the impact of pension obligations on the New York budget which may affect construction trade worker employment prospects. But with the upcoming California campaign reform initiative those sorts of issues will not come to the fore, and labor will be united.

It's curious, though, that we may be in the runup to major California workers' comp reforms just a couple of months before the vote on the November initiative.

Any perception that California labor signs onto a package that despite some benefit increases has significant takeaways would be a divisive and bad development for labor as the campaign over the campaign finance initiative heats up. A political brawl in the Capitol over workers' comp or a tepid deal revealed in a "September surprise" carry similar risks. Given what occurred in 2004, there will be intense focus on whether any deal really helps workers or whether benefit increases are illusory for most workers.

The political power of the California labor movement could be on life support if this initiative passes. A workers' comp deal would come just as unions are trying to muster rank and file enthusiasm and help from progressives to fight the initiative.

For more information about the initiative, including links to its language and information in its funders, here is a link to ballotpedia:
http://ballotpedia.org/wiki/index.php/C ... nitiative_(2012)
Julius Young
www.boxerlaw.com
www.workerscompzone.com