1938: Workmen's Compensation

There are more than 2,500,000 accidents in industry each year in the United States. These are accidents which result in loss of time to the worker, and which therefore may involve loss of earning capacity. The largest number of accidents and deaths have occurred in mines, fisheries, railroads, building and construction.

Accident statistics vary from state to state, not only because of the variation in frequency of accidents but also because of the sources of accident statistics. State workmen's compensation agencies report only compensable injuries — that is, those cases which are entitled to compensation. These vary in each state, depending upon the nature of the law. In addition, most states have accepted the principle of frequency rate, the ratio between the number of accidents, and the man-hours of exposure, usually expressed as so many injuries per 1,000 man-hours. This principle does not measure the severity of accidents for which the severity rate has been devised; the numerator is the total number of days lost; the denominator is the man-hours of exposure; the quotient is multiplied by 1,000. During the years 1933-1934 following the depression, frequency rates went down, while severity rates rose. Since 1934 both rates have been gradually declining.

Industrial accidents are the result of two types of causes: mechanical and human. The former factor is determined by the imperfections of machinery, tools and equipment, the failure to provide proper light, heat, humidity, and ventilation, and the failure to guard dangerous machinery. The human causes are attributable to ignorance, carelessness, emotional instability, mental depression and physical fatigue. The responsibility for such accidents may be placed at the door of the employer or the worker. But in either instance workmen's compensation laws were passed to provide a system of insurance which would protect the worker. The employer, on the other hand, pays higher insurance premiums if the accident rate in his plant is too high. This will become an incentive for him to do his best to prevent accidents in his plant by the installation of proper safeguards. From the viewpoint of the worker, the weekly benefits from workmen's compensation are limited to less than his wages, so that there is no incentive for him to malinger.

Provisions of the state and Federal laws with reference to workmen's compensation are not uniform, as we have stated before. There are 33 states, including Alaska, where the laws are elective and employers have the option of insuring under the act or of remaining under the old common or employer's liability law. Neither are all accidental injuries and occupational diseases compensated. In 1938 only 27 acts in the United States compensated one or more occupational diseases.

In the state of Pennsylvania a new compensation law went into effect Jan. 1, 1938, generally increasing benefits to be paid. On the other hand, the people of Arkansas passed an amendment to the state constitution authorizing the legislature to adopt a compensation law. The states of Mississippi and Arkansas are the only states without any type of legislation covering industrial accidents.

During 1938, the New York State Insurance Fund was removed from the jurisdiction of the State Labor Department and placed under an independent eight-man commission appointed by the governor. The Industrial Commissioner of Labor is to be an exofficio member of this committee. The Cullman Committee which studied conditions pertaining to workmen's compensation in New York State in 1932 reported several types of abuses — namely that:

(1) Hospitals were not receiving adequate money from insurance companies and were discharging patients before they were properly recovered.

(2) Injured employees declared that the presence of insurance company physicians at examinations conducted by doctors from the state board led to biased reports.

(3) Insurance companies often 'lifted' patients out of hospitals and transferred them to cheaper ones.

(4) Certain insurance companies operated their own clinics which were likely to furnish inadequate treatment of cases.

Most of these abuses have been remedied by state action.

The most encouraging development of the last few years has been that of vocational rehabilitation. The Social Security Act of 1935, Title V, Part IV, provided an annual Federal appropriation to states for just such a program. On the other hand, there are outstanding defects in our system of compensation laws in the United States. They lack uniformity in standards and are limited in the scope of their coverage. The many benefits provided by many state laws are insufficient; the period of waiting before compensation is paid, is too long in many cases, and the death benefits paid in some states to workers' families are pitifully inadequate.