Tuesday, November 18, 2008, 06:18 PM - Political developmentsI'm in transit from Taipei to California. I'll be missing the dumpling and noodle shops, but the California comp world beckons.
In the meanwhile, I commend to you thw following article by David Brooks, New York Times columnist and NPR contributor. Brooks writes about the middle class caught up in this recesssion, but much of what he writes about could just as well be about disabled workers:
http://www.nytimes.com/2008/11/18/opini ... nted=print
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Sunday, November 16, 2008, 05:56 PM - Political developments(Note: workerscompzone is in Taiwan for a few more days; later next week I'll resume commentary on California workers' comp topics. But while I'm with my wife on her Far East business trip, I'll look at the bigger picture.)
Undoubtedly you've seen it pictured in Chinese or Japanese art. Rugged mountains. Drifting clouds. A pagoda atop the mountain. Buddhist temples. Peaceful desolation.
Can't envision it? Then click on this:
http://lookingaround.free.fr/Taiwan/Tar ... lcome.html
That's the Hsiang-Te temple and pagoda in Taroko Gorge in Taroko National Park, near Hualien on Taiwan's East Coast. Think Big Sur and Yosemite combined, as this park stretches from steep canyons of marble to surfside cliffs.
Hsiang-Te was badly damaged in a severe earthquake a few years ago, a quake that produced spectacular rock falls and slides in the park. Highways are still closed years later.
Walking around the complex yesterday, "work" and the world of this blog was not exactly foremost on my mind. A river rages below, but on the mountaintop, it's a spot that is possibly the most serene place I've ever seen.
But as I looked around, what struck me were some materials describing the rebuilding of the temple complex after the earthquake/side damage. They told of the community of monks and volunteers who labored to rebuild.
In the modern world some of us love our work and some of us hate our work. Some of us are workaholics ; others just pray for a job to pay their bills or a job that will accomodate their disabilities.
Here, in their own words (with slight editing), are some comments from those who worked to rebuild this special place after the quake:
"In the hustle and bustle of this world,
Where people just pass by one another striving for what they think
the most important.
Striving for their family, for living, for self....
I am ashamed!
I have never come to know what is called "unselfish contribution".
Today, I experience shouldering the bricks and sand
Under the radiant sun
I have come to an understanding of such "dharma-joy".
It is a transcendental deliverance to break through the concept of
"I really wonder,
What kind of will power makes these young ascetics so inconceivable
Steel bars, cement and sacks of sand on their shoulders
Together they transport with all their might
Along the sinuous and sloping path
To the long long stairs.
Plastic ducts, chutes.....
Sack by sack,
They transport to the area of construction.
Wheelbarrows and pulleys are all their implements.
They are bending down,
Soaked by sweat,
Mud from head to toe,
They operate the machines
With all attention because,
Not a handful of sand,
Not a single stone
They run along the sinuous path.
To grasp the handle
Surely needing strength....
Along the way,
Stones and holes are their hindrances.
the bumps, injuries, and bleedings,
Ahead they run.
How can they stop
If the project of reconstruction
If the financial and human resources
Are not enough?"
And the words of one other:
The sweat emerging,
When the breath
Is becoming more and more rapid
When the strong arms
Have made their efforts to the extreme.
When the sore waist
Is unable to be straight further.....
Another sack of cement,
I should stick it out.
The broken ridges are
Very close at hand!
The collapsed steep cliffs are
I will protect Hsiang-Te Temple!"
"We want to firmly reconstruct
The gorgeous and majestic Hsiang-Te Temple
With our wisdom, life, and strength....."
For those of us who work-and who deal with workers-there are lessons to be learned from this.
An interesting book about work as a spiritual practice is this:
http://www.amazon.com/Work-Spiritual-Pr ... 0767902335
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Thursday, November 13, 2008, 04:15 AM - Political developmentsWorkerscompzone is in Formosa this week. The beautiful isle. You probably know it as Taiwan.
I'm not here on law business. But why not use some of the time to reflect on some of the issues facing workers here?
Taiwan-like Korea and Singapore-is one of Asia's small tigers. Its economy came roaring out of the martial law period, bringing increasing prosperity. Its gross domestic product divided by its population puts it at around 30th in the world (by contrast, Mexico is 64th and Singapore at 6th).
But like many other economies, it has struggled with the effects of outsourcing. In Taiwan's case, entrepreneurs have shuttered factories only to reopen them at lower wage scales in China, Vietnam and Cambodia. The shift has been toward higher value-added manufacturing.
Taiwan is really struggling right now. Exports dropped over 8% last month as part of the global slowdown. Capital outflows from Taiwan have recently dwarfed capital inflows; it's a worrisome pattern for folks here.
Like those in many countries, Taiwanese workers have struggled with health issues and environmental damage at their workplaces. If you bought a TV in the 50's or 60s (before Japan and Korea became dominant in TV manufacture) chances are good it was an RCA set. Here's a link to a piece on problems at the RCA factory in Taiwan:
Undoubtedly such toxic legacy problems are spread across many industries.
Sitting on a bus from the airport to downtown Taipei, the contrasts flood one's mind. In between large industrial estates you will find small betelnut sale shops. Scantily clad young women sit behind large glass windows, offering the red nuts for sale to truck drivers and working class folks who chew the nut for stimulative effect.
In Taipei itself, waves of workers flood the rush hour underground trains. Clean and efficient, the mass transit subway is a system that makes San Francisco and LA's transit systems look pathetic. Yet workers still construct many buildings with bamboo scaffolding here.
Most of Taipei looks rather dated. But interspersed are world class structures. Taiwan 101 was the world's tallest building until Dubai's Burj Dubai grabbed that crown.
Medical students and electrical engineers outside the Harvard of Taiwan-the National Taiwan University-pull up on scooters to eat red bean desserts.
On snake alley, near one of the world's finest Taoist temples and amidst various noodle shops, small foodstands offer fresh snake soup. Snake handlers prepare it from a live snake right in front of the you, the diner.
Politically, the struggle continues between the KMT party that seeks better or at least stable relations with China and a party (the Green Party here, not an environmental monniker) that seeks to assert permanent independence from China. The current bad feeling between the political parties makes the Democrat-Republican divide look like a lovefest. The Green Party accuses the KMT of handing Taiwan back to China. Police apparently went overboard in cracking down on demonstrators protesting a Chinese delegation's visit. The recent President of Taiwan, a Green, was just arrested for massive financial fraud.
The country is more politically transparent than most, yet has continued to struggle with graft and corruption at high levels.
Taiwan has a skilled and hardworking labor force. Chances are good that your laptop or cellular phone were assembled here. Biotech and applied life sciences are an increasing area of specialization.
How about the quality of life scale?
Crime is exceedingly low. Racial tensions are low. Yes, there are some minorities-the Hakka (a non-Han Chinese race) and aboriginal peoples-but there are no major problems.
Workers here enjoy a national health plan that provides universal coverage at low cost.
California may still be building its high speed rail system 10 years from now. Taiwan has one already. Business workers can commute between Tainan and Taipei (roughly the distance from Ventura to San Francisco).
Workers rights are far from ideal, but workers here now have much more protection than they did years ago.
Here's a link to the Council of Labor Affairs site:
http://laws.cla.gov.tw/Eng/FLAW/FLAWDAT ... d=FL014980
And here's a summary of Taiwanese employment laws for any wonks out there who enjoy following such things:
http://books.google.com/books?id=cuU4vG ... iwan&s
Stay tuned. And if you can find it in your neck of California, try the red bean shave ice. It's delicious.
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Monday, November 10, 2008, 03:42 PM - Understanding the CA WC systemIs California's State Disability Insurance system subsidizing California workers' comp? Are California workers partially funding the the comp system?
Yes, according to an important report unveiled this week by CHSWC (the California Commission on Health, Safety and Workers' Compensation). A link to the report (a draft at this point, though posted on the DWC website) is included at the bottom of this post.
This study finds that 8.4% of work injuries and two-thirds of occupational diseases (66.2%) are being misclassified as non-industrial.
Among the startling findings in the study done by UC Berkeley faculty are these nuggets:
-13.1% of SDI claims should be defined as industrial, including 7.4% of SDI claims for illness and 21% of SDI claims for injury
-9.7% of employee SDI contributions are going to subsidize occupational claims that are misclassified as industrial.
-this represents a transfer of about $400 million, which is .08% of employee wages in California
Bottom line? A massive cost transfer is happening. Workers are subsidizing employer workers' comp costs in California.
Frank Neuhauser, the study's co-author, noted that he was surprised by the results. He had expected to find that workers were over utilizing the comp system, putting many non-industrial claims through the comp system. He expected to find workers' comp was subsidizing SDI.
Workers' comp is a costly vehicle to deliver benefits. SDI delivers benefits at a cost of about $.05 per dollar of SDI benefits paid.
Let's do a double take on that. Five (5) cents to deliver a dollar of wage replacement benefits. Not bad.
The real shocker is the expense of benefit delivery under workers' comp. The UC Berkeley researchers find that averaging from 1995 to 2007, benefit delivery costs were $.80 for each $1 of benefit delivered, some 17 times the costs under SDI. Costs after the 2004 SB 899 reform may have gone as high as $2.40 for each $1 of benefits delivered.
That's appalling. But it's hardly a surprise, given figures over the last several years that show less than half of insurer premiums actually being paid out to or on behalf of disabled workers.
One cautionary note. To this author, it was not clear whether the UC Berkeley researchers were claiming to be able to separate out costs of benefit delivery for income replacement (temporary disability) from costs of benefit delivery for medical treatment and permanent disability.That's an important point, because medical treatment disputes and disputes over permanent AMA impairment and permanent disability require much of the same carrier overhead costs. So even if there is an integration of SDI and comp, would loss adjustment expenses really be that much lower? Before this report becomes final, that point needs to be clarified by the authors.
I attended the CHSWC meeting where Frank Neuhauser presented the study results.
Neuhauser's presentation didn't sit well with some of the insurance industry lobbyists attending the CHSWC session. Leaning forward to consult with colleagues, at least one industry attendee muttered that "this is bullshit" as his colleagues nodded approvingly.
The Neuhauser-Mathur study should eventually be peer reviewed. It may be subject to arguments on its methodology. But for now, the draft report serves as a provacative argument for further workers' comp reform.
The report argues for integration of SDI and workers' comp TD into one system. There are significant differences in SDI and TD, of course:
-SDI is limited to one year, while TD can extend for 104 weeks
-SDI pays only 60% of wages (within maximums/minimums) while
workers comp pays 66% within the maximums/minimums
-SDI is tied to base earnings in a way that does not apply to TD
But the UC Berkeley study projects net savings to both employees and employers by integrating the systems. Specifically, the authors make the following claim:
"Employers could fund the current portion of SDI that workers are subsidizing and still save $750 million annually by integrating all temporary disability under the SDI program instead of retaining separate temporary disability programs under SDI and workers' comp".
Despite differences in the systems, the UC study argues that the savings would be sufficient to entice labor and California employers to compromise on issues regarding integration of the benefits.
This is, of course, merely one debate which is raging about the direction of the comp system. Also under study by some is the idea of folding workers' comp medical treatment into a comprehensive healthcare reform. Healthcare reform efforts died in the 2007 legislature, and with California's budget troubles, it's unlikely we'll see any grand healthcare reform emerging from Sacramento in the next couple of years. It's starting to appear that Obama is unlikely to make a move on a grand healthcare reform right now, for many of the same reasons (Obama is likely to move incrementally, offering first a children's health bill).
The integration of SDI with comp is actually more practical than the comp/group health integration.
But injured worker advocates will be seeking to restore the right of workers to receive more than 104 weeks of TD, a cause that may be championed by a future governor. Before 2004, workers who remained disabled (for example, workers who had repeated surgeries) could receive at least 5 years of TD if the facts warranted payment. So locking in an SDI/workers comp integrated benefit may have a downside for workers that needs to be highlighted.
Labor union leaders should think carefully before agreeing to such a deal. Perhaps the "cost savings" in an SDI/workers' comp integrated benefit could go towards funding extra years of benefits for those workers who are severely disabled for long periods.
The draft by Frank Neuhauser and Anita K. Mathur of the UC Berkeley Survey Research Center is titled "The Impact Of Occupational Injury and Ilness on Pricing an Integrated Disability Benefit".
The report by Neuhauser and Mathur can be found here:
http://www.dir.ca.gov/chswc/Reports/SDI ... Oct_29.pdf
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Monday, November 10, 2008, 01:50 AM - Political developmentsAIG will be getting even more taxpayer money, and under different terms.
When all is said and done, AIG will be getting an investment of $150 billion.
That is the largest government investment in any private enterprise.
Repeat: the largest government investment in any private enterprise.
Chrysler, GM and Ford may dream of such a deal, but are unlikely to see that kind of money, even between all of them. And that's an industry which will probably fail, throwing the Rust Belt into total chaos. Clients and former clients of mine who work for the GM-Toyota joint venture, New United Motor Co., are looking at an uncertain future.
We can officially dub AIG as having "most favored enterprise status".
Here is the New York Times piece on the revised GM deal, hot off the press:
http://www.nytimes.com/2008/11/10/busin ... nted=print
Stay tuned. Check back later today for my piece on the study on SDI/workers' comp integration that was presented last week.
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