I have been spending some time recently studying Professor Martha McCluskey’s stunningly excellent law review article on workers’ compensation from back in 1998 titled The Illusion of Efficiency in Workers’ Compensation ‘Reform’. Among other things the article challenges the notion that when improvements to workers’ compensation benefits are made inefficiencies for business necessarily result. As Prof. McCluskey notes, in the current workers’ compensation status quo (then and now) there are winners and losers:
“Although efficiency principles commonly have been used to explain recent benefit limitations as neutral economic measures aimed at maximizing overall resources, these principles inevitably incorporate value judgments about the proper distribution of resources.”
McCluskey’s article is set in the context of sweeping workers’ compensation reforms in the late 1980s and early 1990s. There was widespread perception that workers’ compensation insurance costs were spiraling out of control. As is often the case, some of the perception was true; some was not. But often lost in the debate was a central moral question. Are we as a society going to provide adequate compensation for injured workers or not? The follow up question is whether we will use the coercive power of the state to guarantee adequate compensation. Unlike with other employment benefits workers’ compensation is usually not voluntary: most employers in most places are required to provide pay the benefit to workers’ qualifying for it. The reason for the difference in treatment between workers’ compensation and other employee benefits is that employees have foregone their right to a civil lawsuit in exchange for workers’ compensation. In a sense, workers have collectively purchased workers’ compensation benefits in advance. To maintain fidelity to the original idea behind the system, a state should not be able to eliminate workers’ compensation benefits (or to eliminate those benefits as a practical matter through unacceptable reductions for lost wages and reimbursement for medical treatment) without restoring workers’ original right to bring a civil law suit. I do not claim that workers would be better off if they were thrown (back) into the world of law suits. I’m just saying that it would at least be an honest outcome.
Back to social justice. I’m not sure that our society, or any society, is absolutely required (say as a matter of constitutional law) to provide benefits or damages to people who are hurt — whether on the job, or off the job; whether accidentally, negligently, or intentionally. I do know that if society eliminated the right to such benefits or damages it would be the least disadvantaged among us who would suffer most. Those performing dangerous, dirty, or even “ordinary” menial work. You cannot think that is ok and claim to be a proponent of social justice. I suppose we would have a closer question if there were any real risk of crashing the economy by taking care of vulnerable people. But Prof. McCluskey persuades me this is very likely a false framing of the real underlying cost-benefit questions in workers’ compensation.