Three speakers in the final IAIABC session focused on the future of workers comp and factors affecting same. Allen Hunt of the University of Wisconsin started out discussing the factors contributing to the current deficit. In a nutshell, he doesn’t see the deficit as much of a problem. To support that statement, he shared a slide indicating the deficit was pretty much under control until the Bush tax cuts, wars, and economic downturn, and even after accounting for those issues the deficit just isn’t that significant when considered as a percentage of GDP.
Taxes aren’t high relative to our industrial competitors; overall tax revenue as a percentage of GDP is well under the OECD average of 44.8%; US tax revenue is 26.1%.
What really surprised me was the growth in the number of disabled workers, which has more than tripled since 1981 and is rapidly nearing a million working-age Americans.
Dr Hunt shared a good bit of information about the economy and changes thereto over the last thirty plus years and closed with his predictions for the future of work comp. The takeaways are this
– the injury rate (frequency) will continue to decline – declining employment in blue collar industries, better disability and claims management will drive the rate down for the foreseeable future.
– the underwriting cycle will continue – this is the soft/hard market cycle known all too well to us old-timers.
– Dr Hunt believes there are lot of WC claimants who are finding their way into the Social Security System and this may well continue.
– the percentage of 25-54 YO men who are not working has grown from about 2% in 1967 to 8% in 2003. More and more people are being pushed out of the economy – for whatever reason.
Dr Hunt’s top threats are:
– Political polarization and focus of political gain over solving problems
– Medical cost containment has been a failure
– Wage and employment trends aren’t looking good – the number of workers is not increasing, and given the slow employment recovery it will take another eight years to get back to pre-recession employment levels
– Over-reaction to the deficit threat – Hunt believes strongly that this has been much ado about very little.
– OASDI (Social Security) costs – can be dealt with if taxes are increased by a very small amount.
– commitment to work – Dr Hunt closed by saying we are all soft now…
Aug
25
Dr Hunt should start a company that does something.He should hire, pay and manage employees, then If he still believes that if he just pays a little more everything will be alright I may agree with him. I know we need to pay more to fund social security but i wish we had a level paying field so that when someone says lets raise taxes we all get to experience that reality. Otherwise great comments and Im glad your there to report on the goings on.