August 9, 2005


State Employers Reaping Benefits of Workers' Comp Overhaul
(Marc Lifsher, August 9, 2005, LA Times)

Owners of small and medium-sized companies in California are beginning to see significant benefits from the cost savings that followed two years of retooling the state's program for providing benefits to injured workers.

Premiums for workers' compensation insurance fell an average of 14.6% for policies written or renewed after July 1, Insurance Commissioner John Garamendi reported Monday, reflecting renewed competition among insurers and sharp cuts in the benefits collected by workers.

Since July 2003, when the state began overhauling a program that is routinely listed by employers as the most onerous aspect of doing business in California, premiums on workers' comp policies now have fallen an average of 26.5%.

"Do I believe we've turned a corner? Hugely," said Seth Marshall, vice president of Santa Monica Seafood Co. Marshall's Rancho Dominguez firm, which employs about 200 people, saw its workers' comp insurance bill fall by about 45% in July.

The big reason is increased competition among insurers. Many had fled the state or gone out of business since the late 1990s as the state's system for treating victims of workplace injuries was hamstrung by rising costs and skyrocketing premiums.

Stabilizing the $24-billion-a-year program through legislative cost cutting and streamlining has attracted 15 new insurers to the California market in the last two years.

"It's a competitive market right now," said Scott Hauge, a San Francisco insurance broker. "I've never seen the rates go down as dramatically as they did in July."

The decline in rates, combined with another cut of at least 5% expected in January, fulfills a pledge made by Gov. Arnold Schwarzenegger, who predicted that the workers' comp bill he shepherded through the Legislature in April 2004 would lower premiums by 30%.

Design a market intelligently and you get competition.

Posted by Orrin Judd at August 9, 2005 11:33 AM

Then why hasn't man gotten any competition in the marketplace of civilization-building?

Posted by: Al Cornpone at August 9, 2005 11:54 AM

That's how He Created the world.

Posted by: oj at August 9, 2005 11:58 AM

So He is anti-free market? Interesting.

Posted by: at August 9, 2005 12:03 PM

Mr. Cornpone:
No disrespect intended, but what the heck are you talking about? Intra-species competition (that is, man vs man)for civilizational domination has been rampant for tens of thousands of years. If you mean inter-species competition, well hey, don't blame Adam Smith's economic theories just because the dolphins can't get their act together. And of course, there's always inter-planetary conflicts but we haven't seen any of those...yet!

Posted by: at August 9, 2005 12:20 PM

No, He, like we, is free market after certain rules are established. The myth of the free market is that it springs forth from Nature fully blown. The reality that it is a function of intelligent design. Smith was right. Darwin wrong.

Posted by: oj at August 9, 2005 12:22 PM

Well then, it's a rigged marketplace. It strikes me that the bloodiness of the last century can be accounted for in God's favoritism towards man. Perhaps if He allowed in a couple of ambitious upstarts with comparable intellectual capacity, we'd have to clean up our act, or else face a mass emigration of our own kind into the better, more efficient world constructed by a competing race. I suspect we've gotten rather decadent in our monopoly on civilization.

Posted by: Al Cornpone at August 9, 2005 12:37 PM

All marketplaces are rigged, because the market exists to serve a purpose and functions under a regime of rules.

Posted by: oj at August 9, 2005 12:41 PM

Cornpone doesn't seem to get that "competition" with an "upstart species" would make WWII look like a soccer game.

Posted by: Timothy at August 9, 2005 1:02 PM

He's also not really clear what he means bu "upstart species." Apes, as in "Conquest of the Planet of?" Ants, like in Phase IV? Aliens? I don't think I've ever heard anyone use the non-existence of aliens to disprove the existence of God.

Posted by: Governor Breck at August 9, 2005 1:17 PM

I'm not trying to disprove the existence of God, merely noting that he's not a free market advocate in the purest sense. I'd further suggest that this state of affairs is the main source of friction between the neocons and theocons.

Posted by: Al Cornpone at August 9, 2005 1:34 PM

No one advocates a free market in the truest sense.

Posted by: oj at August 9, 2005 1:37 PM

Dear Mr. Cornpone:

Thank you for the suggestion.

Posted by: god at August 9, 2005 2:14 PM

We're traveling, so I haven't been keeping up as carefully perhaps as I should, but have a "couple of ambitious upstarts with comparable intellectual capacity" recently surfaced (pun intended)?

Posted by: erp at August 9, 2005 4:55 PM

Hayek lives.

Posted by: Brooks at August 9, 2005 10:25 PM

Anonymous and Timothy have the right answer to Al Cornpone, as far as the answer went. Let me add that it never gets to that point. The sentient nitch is quite full, thank you. How likely is it that we would suffer an upstart species to reach the point that it would be any kind of threat, or where more effort would be required than the issuance of a few hunting licenses?

It is not clear that interspecies competition for domination of the sentient nitch has not taken place, with the score, H. Sapiens 1, H. Neanderthalis 0.

Posted by: Lou Gots at August 10, 2005 1:00 AM

[A] mass emigration of our own kind into the better, more efficient world constructed by a competing race.

This should remind us of something, though it may not be the answer that Mr. Cornpone is looking for.

Posted by: David Cohen at August 10, 2005 8:17 AM