How does workers' comp compare among TPP countries?

Interjurisdictional comparison of compensation for work-related injury is difficult.  Among the Trans Pacific Partnership (TPP) countries, there is wide variation in laws covering work injuries.  The “context” of each jurisdiction is critical to any comparative study.  To complicate matters for comparison in workers’ compensation and OH&S, three TPP member states (Canada, the US and Australia) have laws that vary by state or province.   Some TPP countries integrate work-injury compensation with other aspects of social insurance.  Just to get an adequate baseline on what would seem to be a simple measure can be overwhelming.  

Comparisons of employer cost for work-injury “social insurance” (whether workers’ compensation or some other social security provision) are even more problematic.  Employer costs for work-injuries typically include workers’ compensation insurance costs but these are driven by wage rates, injury rates, compensation or benefit rates, medical costs and, of course, injury frequency and severity.  With a wide variety of mechanisms from individual employer liability to integrated accident compensation in TPP countries, there is no simple approach to a common comparison on the employer cost side. 

To illustrate this challenge for the worker-side comparisons, consider what would be required to compare the most common work-injury compensation cases.  For argument’s sake, consider the effort to compare the compensation a worker with a typical work-related time-loss injury might be entitled to in each TPP member country.  Sounds simple enough but let's make the consideration even simpler; let's look at only the most common work-related injury cases that result in time away from work.  The median days-away-from-work in the US is 8 calendar days, so keep that in mind when you think about employer responsibilities and worker compensation when you consider each jurisdiction. 

A full review of each TPP member state and the individual state/provincial workers’ compensation provisions in Canada, Australia and the US is beyond the scope of this blog post but here are some notes on each member state that focus on coverage for short duration absences and wage-loss due to work injury.   

United States

As a starting point, consider how work-injury compensation cases are handled in the US.  Every US state has some sort of waiting period; in this discussion, a waiting period is a worker deductible in the form of days (3 to 7 calendar or work days, depending on the jurisdiction) without earnings or benefits before compensation for temporary total disability begins.  All but two states have retroactive periods so claims for work absences of greater than a specified number of days or weeks (typically 14 calendar days to four weeks)  are compensated  retroactively for the waiting period.  Benefit rates are typically 66.67% of average earnings but may be capped by other provisions such as statutory maximums. 

Japan

The compensation or benefit rate is 60% of the basic daily benefit plus a temporary disability special supplement of 20% of the basic daily benefit ; it is paid after a three-day waiting period until recovery (but the employer pays 60% of the average daily wage for the first three days).

Malaysia

The compensation or benefit rate is 80% of the worker’s average daily wage in the six months before the disability began.  The Employment Injury Insurance part of the social security program pays beginning on the fourth day following certified disability from work. 

Mexico

The rate is 100% of the insured's covered monthly earnings is paid from the first day of disability until certification of permanent disability.

Peru

100% of the insured's covered earnings is paid after a 20-day waiting period for up to 11 months and 10 days. (The employer pays the insured's full earnings for the first 20 days.)

Vietnam

The employer pays 100% of the insured's earnings from the first day of treatment until the insured is recovered, discharged from the hospital, or assessed with a permanent disability.

Chile

For public-sector employees, the monthly benefit is 100% of net earnings. For private-sector employees, the monthly benefit is the average monthly net earnings in the three months before the disability began. The benefit is paid from the day of injury for up to 52 weeks (may be extended up to an additional 52 weeks).

Brunei

Benefits are 66.7% of the employee's average monthly earnings in the six months before the disability began is paid monthly after a four-day waiting period for up to five years. If the disability lasts more than 14 days, the benefit is paid retroactively for the first four days.  The maximum monthly benefit is B$130.

Singapore

For work-related injury, 100% of the insured's average monthly earnings in the 12 months before the disability began is paid for up to 14 days if not hospitalized (up to 60 days if hospitalized). Thereafter, 66.7% of the insured's average monthly earnings in the 12 months before the disability began is paid.  The benefit is paid from the first day of incapacity for the duration of incapacity, up to one year.

New Zealand

The workers’ compensation idea is integrated into a personal-injury “accident compensation” scheme covering both work and non-work related injuries resulting in incapacity for work.  The system is administered by the ACC.  The benefit is 80% of the worker's average weekly earnings in the period before the incapacity began is paid until he or she is able to return to work. For work-related personal injuries, the employer pays for the first week of incapacity after which the ACC insurer takes over the payments.

Canada 

Provincial schemes with temporary benefits ranging from 75% (Nova Scotia) to 90% (BC, Alberta) of Net  wages.  No waiting period in most provinces (except NS and NB which also have retroactive periods and some waiting period exemptions).

Australia

The benefit varies depending on the state or territory in which the award is made. Generally, the benefit rate is 85-100% of earnings for a minimum of 26 weeks. Benefits may be payable for an extended period at reduced levels. Employers responsible for the first 5 or 10 days (Victoria) of wage compensation. No worker waiting period.

Injured workers with work absences of eight days or less in most TPP jurisdictions are likely to suffer a significantly smaller loss of income  in most TPP member states than most US (and some Canadian) injured workers.  Will increased trade motivate improvements in benefits and safer workplaces?  How will we know?

As the TPP agreement is ratified by the current dozen member states (and perhaps others in the future), questions regarding the cost and comparability of work-injury coverage are likely to grow.  I doubt the backers of the TPP would want to see the agreement result in diminished coverage for work-related injuries but workers’ compensation (whether on its own or integrated into a broader social security system) are real costs with real consequences for employers, workers and their families.  Research is needed now to establish a baseline that will help future studies determine how the TPP impacts worker health, safety and compensation for work-related injury. 

What will the Trans-Pacific Partnership (TPP trade agreement) mean for workers’ compensation?

Trade deals often contain provisions regarding labour, social security (including workers' compensation), occupational health and safety (OH&S).  The Trans-Pacific Partnership text  contains several clauses of note. 

Aside from its aspirational purpose statements in the beginning of the document, Article 19.3: Labour Rights notes [item 2]:

Each Party shall adopt and maintain statutes and regulations, and practices thereunder, governing acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.

You might be forgiven for assuming that this clause implies there will be some external standard-setting body or authority on what “acceptable conditions” might be.  A footnote in the agreement, however, narrows the potential impact of the scope considerably:   

[Footnote 5 page 19-2] For greater certainty, this obligation relates to the establishment by a Party in its statutes, regulations and practices thereunder, of acceptable conditions of work as determined by that Party.

Article 19.10 opens the door to “cooperation” on many issues including:

(c) innovative workplace practices to enhance workers’ well-being and business and economic competitiveness;

(e) work-life balance;

(j) occupational safety and health;

(p) social protection issues, including workers’ compensation in case of occupational injury or illness, pension systems and employment assistance schemes;

There is also an article on “Non Degrogation”.  Article 19.4 reads in part:

The Parties recognise that it is inappropriate to encourage trade or investment by weakening or reducing the protections afforded in each Party’s labour laws.

The TPP clearly anticipates the criticism that trade agreements can put downward pressure on social security, working conditions, OH&S and workers’ compensation.  There were concerns over  “a race to the bottom” on safety, health and workers’ compensation issues that followed the implementation of the North American Free Trade Agreement (NAFTA), for example. 

Will the TPP result in improved workplace health and safety or workers’ compensation overall?  I’m not sure from my quick review that there is any will to fund the independent research necessary to answer such questions.  That sort of research is complex, time-consuming and expensive.   However, the only way the public in every member nation will know if the TPP is helping or hurting the safety, health, and workers’ compensation protections is through objective, well-designed study that assesses each system against common standards. 

The economic benefits of the TPP may well improve the OH&S and work-injury financial protections for workers;  we won’t know for certain unless its implementation and progress is objectively assessed against credible standards.

Hopefully, member states will fund the research necessary to establish the baseline comparison, monitor changes and assess the impact of the TPP on workplace health, safety and compensation issues. 

What will elimination of the waiting period mean?

Workers’ compensation “reform” often means changes that effectively reduce costs and/or benefits.  That is not the case with the recently announced changes to one workers’ compensation system.  If the legislature approves the proposed amendment, the Workers’ Compensation Board of PrinceEdward Island will eliminate the waiting period effective January 1, 2016.  That will leave New Brunswick and Nova Scotia as the only two Canadian provinces with waiting periods.  (All US jurisdictions continue to have waiting periods of 3 to 7 days.)

A three-day waiting period was introduced in PEI as a cost-cutting measure in 2002.  In 2014 this “worker-deductible” was reduced to 2 days.  Stuart Affleck, Chair of the WCB, notes in a news release:

Eliminating the wait period will provide wage loss benefits to all workers from the day following an accident.  This measure will have a direct impact on our most vulnerable injured workers who might not have access to sick leave benefits during this timeframe.

The emphasis on the “most vulnerable” injured workers is important.  Day labourers, minimum wage earners,  new entrants to the workforces, or migrant workers must often rely on personal savings (or credit), welfare or the charity of neighbours to cover uncompensated wage loss due to work-related injury.  For these workers, the elimination of the waiting period for work-related injuries can provide 85% of net earnings (maximum annual earnings for 2015 are $52,100) tax free, substantially reducing the financial burden they must otherwise bear. 

Mr. Affleck’s focus on those “who might not have access to sick leave benefits during this timeframe” should not be read narrowly.  I am certain he doesn’t mean to imply that sick leave is a suitable alternative to workers’ compensation—it’s not. Even where sick leave is available, it is not intended to cover absences for work-related injury. 

Sick leave pay is typically available in medium to large firms and government entities.  In unionized organizations, sick leave is a negotiated benefit; in other words, the amount and structure of sick leave provisions (as well as short and long term benefit plans) are wage or salary cost items arrived at in the collective bargaining process; changes to wages, hours of work and even working conditions may well have been bargained to achieve sick leave provisions in collective agreements.  In non-unionized environments, sick leave provisions generally reflect industry standards—to be competitive in order to attract and retain talent. Whether or not the specific sick leave plan was the product of negotiations or market conditions, the value of sick leave is part of the financial compensation for the job.  Unlike workers’ compensation, sick leave pay is taxable and its benefits typically not intended to cover work-related injury, illness or disease.   

A key fact facilitating PEI’s policy shift has been the decreased frequency of work injuries.  The rate of workplace injuries and illnesses has fallen dramatically over the last three decades.  Recent “reforms” in Canada and the US have generally reduced employer costs; yet, rarely have reforms increased the worker access to or compensation for work-related injuries.  Waiting periods, long (or no) retroactive periods, low insured earnings (or weekly benefit) maximums, low benefit rates, and limits on benefit adjustments for cost of living  continue to shift a significant portion of the cost of work-related injury and disease to workers, their families and other systems. 

Work-related injuries that have durations shorter than the waiting period are essentially costless to workers’ compensation insurers.  Aside from some medical costs that may be payable, there is little financial incentive from workers’ compensation premiums to eliminate these short duration claims.  Uncompensated days of waiting period in longer duration claims also shift costs to workers and reduce the potential incentive workers’ compensation costs can have on improving workplace health and safety. 

For workers in PEI (particularly the most vulnerable), the elimination of the waiting period will mean improved access to compensation and less externalization of the cost of work injury to workers, families and communities.  It is also likely to increase the number of reported work-place injuries—not because of a decline in safety but because of increased workplace injury reporting. If improved reporting and cost incentives increase the focus on workplace health and safety, then this policy change is not only good for PEI workers, it is good for everyone. 

Are CCTV images available for workplace health and safety purposes?

If you travel on public transit, visit a public school, or simply walk in the hallway of your office building, there is a good chance your movements and actions are being caught on closed circuit television (CCTV). A 2007 ePolicy Institute survey found almost half (48%) of the companies surveyed use video monitoring to detect and discourage theft, violence and sabotage; some use CCTV to monitor work performance.  

Video monitoring and surveillance systems in the workplace are usually justified for public safety and the security of property.  What may be overlooked is their value to joint health and safety committees in investigating workplace hazards, injuries, and near misses.

Every institution or organization that has CCTV should have a policy regarding its live and recorded images.  Most jurisdictions have laws or guidelines for businesses and public bodies regarding CCTV (Guidelines for Overt Video Surveillance in the Private Sector March 2008  and Public Sector Surveillance Guidelines January 2014 are good examples of a concise, easy to follow guideline that addresses most privacy concerns).   These rules typically address purpose, signage and access but are often written from a privacy and security of property perspective; rarely do CCTV policies include worker health and safety among the reasons for surveillance.

Any business or institution with a CCTV installation should have policies that outline the purpose of surveillance and the rights of workers (and others) whose images are captured, recorded and retained.  A comprehensive policy will specifically address access  rights of workplace health and safety committees and safety officers to live or recorded images in carrying out their required duties.  Procedures will include specifics on how video records of workplace incidents, accidents and related events are requested and secured.  These video records are evidence that may have an important bearing on investigations into causation or proving adherence (or violation) of OH&S laws and regulations. 

Every place with a video camera is someone’s workplace.  A park is a groundskeeper’s workplace.  A transit platform is a transit attendant’s workplace.  A public hallway in a school is the workplace of custodians, teachers, teaching assistants, and others in the course of their employment (copier service technician, courier, fire inspector).  As you walk through your workplace and the workplaces of others that you encounter in your day, think about how the CCTV cameras you see could be used for worker health and safety purposes.  Here are a few examples to get you started:

A joint health and safety committee or safety officer could use CCTV to:

• Investigate the source of reported hazards (oil in a hall that is a risk of slips and falls)
• Confirm witness descriptions (a reported incident of an act of force by a dementia patient)
• Observe a specific risk (congestion in a passageway during a fire drill)
• Establish the sequence of events that led up to an injury

I’m neither advocating for more CCTV nor proposing new controls on CCTV use.  What I am suggesting is that every organization that uses CCTV (or any of the proliferating video capture technologies) explicitly address worker health and safety in their video surveillance policy and procedures.  Joint health and safety committees and corporate safety officers should review their access to video records for the health and safety purposes.  If no policy regarding the use of CCTV for worker health and safety currently exists, the issue should be addressed in the next policy review.  Once a policy does exist, workers and managers need to be made aware of the policy as it may pertain to them in the course of their employment.  This is critical to preserving the video record for potential use in the health and safety investigation.   

With the plunging cost of video capture and recording technologies and their growing use in workplaces, workplace injuries, exposures and risks will increasingly be captured in video records.  CCTV and other recorded images may be impersonal but their objective witness to events may reveal the cause of otherwise contentious injuries and exposures as well as expand opportunities to improve workplace health and safety. As the capture and retention of video images of people at work and in the course of their employment proliferates, policies that support their proper use for health and safety purposes need to be developed, formalized and maintained.    

Some Questions for Joint Health and Safety Committees (for a specific incident, near miss or health/safety issue):

• Would a video record of the incident assist in the investigation?
• Was the area of a reported hazard, incident, near miss or injury being examined by the committee under video surveillance? (This is an important question even if the incident is not on the employer’s worksite.)
• Does the current policy regarding video surveillance include worker health and safety within its purpose?
• Does the policy define the retention and terms of access for the committee?
• What are the procedures for the committee to request and view CCTV and other captured images for the purposes of carrying out their duties?

Can we quantify the size of the worker deductible (waiting period) in workers' compensation?

The most recent NASI report on Workers’ Compensation Costs, Coverage and Benefits 2013 acknowledges  that “waiting periods” served by injured workers are  an “implicit” and “indirect” cost of workers’ compensation.  The report also notes the difficulties in estimating those costs.  Whether measured in terms of days away from work or lost wages,  waiting periods in the jurisdictions that have them are real costs borne by workers and their families.

A waiting period is a period of time or proportion of weekly-earnings loss that must be incurred by the worker before workers’ compensation for temporary disability begins.  Lost wages during the waiting period are uncompensated.  Waiting periods are present in every US workers’ compensation system but relatively rare in Canada (only three provinces have waiting periods:  3/5ths of a work week in New Brunswick and  2/5ths of a work week in Nova Scotia and Prince Edward Island) and absent  in all Australian schemes. 

In the US, waiting periods range from three to seven days(excluding the day of injury in most cases).  A waiting period is typically served when a worker is absent from work for the specified number of days due to work-related injury, illness or disease.  In all but two states (Hawaii and Rhode Island) waiting periods are waived or retroactively compensated for longer duration claims.  The length of this “retroactive period” varies from as little as five days (Nevada, North Dakota) to as long as six weeks (Nebraska).  While the insurer may pay medical costs during the waiting period, the worker bears the cost of lost wages during the waiting period.

Gunderson and Hyatt  (Waiting Periods and Direct Payments in Workers’ Compensation Prepared for the Royal Commission on Workers’ Compensation in British Columbia, June 1998) provide five policy rationales/objectives for waiting periods:

·         Reduce moral hazard

·         “Self-insuring” as a financial incentive for promoting safety

·         Reduce administrative costs

·         Reduce benefit costs

·         Cost sharing between injured workers and employers

Note that three of the above relate directly to shifting the financial cost of work-related injury, illness and disease from the employer to the worker in jurisdictions with waiting periods.  It follows that those with the longest waiting periods and long or non-existent retroactive periods shift more of the cost to workers and their families. 

A waiting period is a worker “deductible”.  Employer deductibles are quantified in the NASI report.  The waiting period and retroactive periods for each US jurisdiction are summarized in Table C (pages 66 – 72) of the report.  To the best of my knowledge, no state or public agency reports annual data on the waiting period cost in either dollar terms or days away from work.   This lack of workers’ compensation data on the worker waiting-period deductible has thus far made accounting for this workers’ compensation system “cost” too big a challenge for NASI and other investigators. 

A conservative estimate, however, may be gained by using other sources.  Given that all waiting periods in the US are of three or more days and given that no state has a retroactive period of less than five days,  a minimum estimate of this cost may be achieved by examining the number of cases of work absences due to work-related injury that range from 1 to 3 days. 

The US Bureau of Labor Statistics (BLS) reports that the median days away from work for occupational injuries in 2013 was 8 days, down one day from previous years.  In a state with a three day waiting period, the worker has no entitlement to compensation for the loss of 3/8ths or 37.5% of an 8 day loss.  If the days away from work are less than or equal to the waiting period, there is no entitlement to compensation; wages lost during the waiting period are uncompensated.  The worker and his or her family must bear the full cost of wages lost. 

2013  Cases of nonfatal occupational injuries resulting in days away from work. 

                        1 day               2 days              3-5 days          6-10 days    11-20 days

Male               90600              70550              118280            87330         82220

Female            67740              53540               80220             56450         49550

Not Specified     430                  190                    550                 440            540

( Data extracted on: September 2015

Nonfatal cases involving days away from work: selected characteristics    

Series Id:  CSUDAX0XXXXX6G000       

Area:       All U.S.        

Ownership:  All ownerships   

Data Type:  Injury and illness Cases  

Case Type:  Industry division or selected characteristic by gender) 

If you multiply the cases in each of the first three categories by 1, 2 and 3 days respectively, these cases of work absences of very short duration (1-5 days) represent more than a million days served by workers in waiting periods.

Now, think about the cases with more than three days away from work but less than the specified absence for the retroactive period to apply.  These cases are not subject to a retroactive period because their duration is too short.  The most common retroactive period is 21 days.  If days away from work extend beyond 21 days, the waiting period is typically compensated (except in RI and HI, where the waiting period is not compensated).  Cases involving work absence categories of 6-10 or 11-20 days away from work will have typically served a three day waiting period.  So, multiplying the number of cases in these categories by three will yield the number of days away from work that result in waiting period days (most of which represent days of wage loss that are uncompensated by workers' compensation).

Based on BLS nonfatal injury data for cases involving 1-20 days away from work, workers served more than 1.8 million days of  waiting period "deductible" in 2013.   

There are, of course, limitations to this method.  BLS data may include cases that are not covered by workers’ compensation and may exclude certain cases that result in compensation but are outside the definition of reportable work-injury absences used by BLS sources.  On the other hand, this method underestimates the impact waiting periods of longer than three days and retroactive periods greater than 21 days would have on the total of uncompensated days due to the waiting period.  BLS definitions of days away from work are based on calendar days so it is possible that some workers who work five days or less per week and are absent over a weekend would be captured within some of the counts.

Based on data from private industry, just over 70% of work-injury cases involve 30 or fewer days away from work.  More than 42% of cases involve 1-5 days away from work.  That means for the majority of work-injury cases, the waiting periods reduce the effective workers’ compensation benefit substantially. 

Workers with good sick leave or access to other short-term funding sources including savings may be able to cope with the financial loss associated with uncompensated days better than those without savings or access to other benefit programs  Waiting periods externalizes the cost of work-injury and  essentially constitute a premium rate subsidy—something that should be taken into account when comparing premium rates between jurisdictions or estimating the full cost of workers’ compensation system 

Waiting period costs may not be easy to calculate but every state and province that has a waiting period and a retroactive period has the data to quantify the number of cases that serve a waiting period, report the uncompensated work-absence days and estimate the financial cost workers bear for losses during the waiting period.  Quantifying the waiting period “deductible” will go a long way to creating a more complete picture of workers’ compensation costs, coverage and benefits.  

What are the direct and indirect costs to workers of workers’ compensation?

For those of you who are involved in workers’ compensation policy development and  comparisons between systems, you probably have a copy of the National Academy of Social Insurance Workers’ Compensation: Benefit, Coverage, and Costs 2013 on your  virtual or physical bookshelf already.   If you don’t, you may want to bookmark it right now.  

Although this is the 18^th year of this document’s publication, it would be a mistake to think of it as simply an update.  Yes, the usual tables are there with the most up-to-date information you will find anywhere on US workers’ compensation system measures.  A closer look will reveal refinements and changes in the presentation that make this document an even more valuable resource. 

One change has been the inclusion of a section on the direct and indirect costs of workers’ compensation borne by workers.  The report has always acknowledged that its estimates can’t capture the full human cost of work-related injury, illness and disease.  This new section goes further and highlights recent research ( Leigh, J. Paul, and James P. Marcin. 2012. “Workers’ Compensation benefits and Shifting Costs for Occupational Injury and Illness,” Journal of Environmental Medicine 54(4): 445-450) that provides estimates of costs to workers and governments that go beyond the employer cost of workers’ compensation contained in the NASI report.

The section also acknowledges the implicit cost of waiting periods that workers must bear.  While no financial dollar amount is listed, this “worker deductible” is a significant direct cost to workers and their families.

The report has long noted that workers pay a portion of the premium in Washington State but this year also notes other direct worker costs in Oregon and New Mexico.  To expand on this, the following puts some hard numbers around these costs.

Washington State has about 2.8 million workers covered by workers’ compensation contributing $313 million in 2013 and $343 million in 2014 to the overall premium revenue.  (The NASI report notes that 25-27% of the workers’ compensation costs in Washington State are paid for by workers).

Oregon maintains a Worker Benefit Fund (WBF)  contributed to by workers and employers in equal amounts.  Oregon has about 1.65 million jobs covered by workers’ compensation.  The worker contributions to the WBF were $36,051,153 in 20113 and $43,668,118 in 2014.  Using premiums + WBF as the denominator, workers directly funded 3.8%  (2013) and 4.4% (2014) of the system costs.

New Mexico has a small covered workforce at about 718,000 covered jobs.  The State imposes a Workers’ Compensation Fee on workers and employers.  The fee is paid quarterly by workers ($2.00 per worker) and employers ($2.30 per employee).  The combined amount collected from workers and employers amounted to $12.3 million in 2013 and $12.8 million in 2014. The worker portion (based on 2/4.3 or 46.5%) was $5.72 million in 2013 and $5.95 million in 2014.

The services and benefits provided for by these direct worker-paid amounts are typically paid for in other states out of premiums collected from employers. 

The full cost of work-related injury, disease and death may never be completely quantified in financial terms.  Where direct explicit workers costs (such as the fees noted above) and the direct implicit costs (waiting periods) can be calculated, they need ought to be reported and considered in the overall calculation of workers’ compensation costs.  

Are workers’ compensation policies keeping up with demographic changes?

Do you know anyone who holds two or more jobs?  How about someone over the age of 65 working part or full-time?  Are you seeing more older workers in the workforce?  Is the demand on health services going to increase?  What are the implications of large scale demographic shifts on our workers’ compensation systems, our communities and our families?

These are just a few of the questions I had a chance to explore in my recent keynote at the 2015 AASCIF Conference in San Francisco.  The theme for the event, “Bridging the Future”,  is an apt description of  the role demographic change is playing in our lives.  Take the shift towards older workers, those age 65 and better, continuing to work.  I updated data from BLS with recent trends and projections to show that this segment of the population is growing and will continue to participate at substantial levels over the next decade.

We used to think those over the age of 65 might want to ease into retirement through part-time work.  This sentiment was borne out in data through the mid-1990s when the proportion of part-time work dominated at about 56% of the employed population age 65+.  Then something happened; full-time employment for this group began to rise peaking at about 57% in just before the Great Recession (Dec 2007 to June 2009).  It was an open question as to whether the recession would reverse this trend.  To answer the question, I extracted the most recent data from the Current Population Survey.  In fact, the trend toward more full-time work has continued.  Full-time employment now dominates the employed labour force of those over the age of 65 at about 60%.

Beneath the proportions, the data in both Canada and the US shows dramatic and rapid increases in the actual numbers of those over age 65 working full time.  I recently extracted Canadian data from Statistics Canada’s Labour Force Survey.  Although full-time employment numbers for those over age 65 have always exceeded part-time counts in Canada,  since 2000 there has been a dramatic increase in this segment of the labour force.   Now, full-time dominates at about 59% of the working population age 65+.

Underpinning these dramatic trends is a growing population of older citizens.  In most developed countries, the population of older citizens is growing disproportionately to the overall population.   A combination of falling birth rates, improved longevity, changing economic circumstances and increases in knowledge requirements in career preparation have made working longer possible and necessary for many people.

US  Social Security offers a Disability Insurance component (SSDI).  The demographic cohort known as “babyboomers”  are aging through their years of high disability incidence and projected to deplete the SSDI trust by late 2016.  Without action by lawmakers, automatic reductions in SSDI benefits will occur.  Given that many workers’ compensation systems have SSDI offsets, it begs the question:  What happens to workers’ compensation costs if SSDI is reduced (or eliminated)?

Then there is the demographic of “multiple job holders”.  I wrote about this phenomenon in my previous post on concurrent employment.  While this represents about 6% of jobholders in AASCIF states, certain occupations have a much higher prevalence (28% for firefighters, for example).

AASCIF states in general provide multiple jobholders with better wage protection than non-AASCIF states (many of which exclude concurrent employment from any wage-loss protection).  But it raises the question:  with the phenomenon of multiple job-holding firmly entrenched in our economy, is it justifiable to deny injured workers compensation for losses from secondary employment by invoking the exclusive remedy?

Another demographic worth examining is income based on educational attainment.  An increasing proportion of occupations are knowledge-based and the acquisition of knowledge takes time and money.  It is not surprising that income levels are often higher for those with advanced education, training and skill.

Note, however, that compensation rules (maximum insurable, maximum benefits payable, non-refundable waiting periods,  and percentage of wage replacement) reduce the workers’ compensation payable well below the often targeted  66 2/3rds gross or 90% of net (“spendable”) earnings.  The above chart shows median earnings; for earners at the 75^th or 90^th percentile, that replacement rate may well be less than 50% of spendable pre-injury earnings. [Current Population Survey as quoted by BLShttp://www.bls.gov/emp/ep_table_001.htm]

Demographic analysis raises other questions.  Take, for example, the implications of a society that is changing disproportionately with respect to its age profile.  If you were to take a detailed photograph of everyone in a community this year and five years from now, you may find more individuals.  If you analysed the pictures and demographics of the individuals, say ages 0 to 19,  you may find that all age categories have gotten larger.  If this year is 1.00 and five years from now has grown to 1.05, the implication is that there has been a five percent increase  population of individuals in that age category.   If all categories grow proportionately, the roles (occupations, dependants, retirees) will likely be in the same proportions.  But what if the age categories grow disproportionately?  That’s what an index-approach showed in my analysis of several states.

The next 15 years show dramatic increases in the proportion of the population aged 65-84 and 85+ while the population of those 19 and under and 20 to 64 remain stable and proportionate to each other.  This analysis reveals an important issue regarding “Demographic Age Dependency”  and “Economic Dependency”.  In the next 15 years, the population “demographically dependent” on the 20 to 64 portion of the population will increase to about 85 for every 100 in that age category.  At current participation rates, that means there are more than 100 non-working citizens are now economically dependent on every 100 employed in the labour force.  And that ratio will continue to grow.

The call to action here is not simply self-serving.  Yes, I am an aging babyboomer and I want generations x, y and z to respect, honour, and provide for their aging predecessors.  More than that, however, I want workers’ compensation systems to understand these changes and ensure their policies reflect the changed and changing reality of the workplace.  Higher demographic and economic dependency ratios make the guarantee of adequate and equitable compensation for work-related injury increasingly important to more than just the injured worker.  Legislative and policy restrictions that limit compensation to as little as half pre-injury earnings levels hurt workers and the people dependent on them… which is ultimately all of us.