1942: Workmen's Compensation

The tempo of war-time production has placed an added responsibility upon management, labor, and the Government to reduce the loss of manpower and the waste of time arising from industrial accidents. Because of the increased army of women workers as well as non-industrial workers who have entered the army of war production, the actual industrial accident rate has increased.

In 1941 there were 19,200 deaths due to industrial accidents, and 100,000 permanent impairments. There were 2,060,400 temporary disabilities. A total of 42,083,000 days of work were lost during the year. Six industries were responsible for the highest rate of industrial accidents:

(1) Iron and steel — estimated — 74,300 disabilities with a loss of 7,000,000 man-days.

(2) Lumber — estimated — 66,800 disabilities with a loss of 7,250,000 man-days.

(3) Machinery — 56,600 injuries with a loss of 4,500,000 man-days.

(4) Food production — 45,200 injuries with a loss of 3,500,000 man-days.

(5) Textile — 45,200 injuries with a loss of not quite 3,000,000 man-days.

(6) Transportation equipment — 37,500 injuries with a loss of 4,500,000 man-days.

(7) Stone, clay-glass — 20,600 injuries with a loss of 2,000,000 man-days.

In June 1940 the Secretary of Labor created the National Committee for the Conservation of Manpower in War Industries. Its principal objective was to sponsor and supervise plans whereby every industrial establishment operating under Government contract would have available, without cost, information and expert service to assist it in developing safety programs designed to:

(1) Prevent the maiming, killing, and injuring of trained workers essential to industries engaged in war production.

(2) Prevent the loss of valuable production time on the part of workers through sickness, accidental injury, and occupational disease.

(3) Prevent disruption of and delays to production schedules, damage to machines and equipment, and wastage of materials which follow in the wake of accidents.

(4) Control, insofar as possible, all environmental factors which may render the worker less fit for the job of maintaining quantity and quality production.

There were few legislative changes in the field of workmen's compensation in 1942. The State Supreme Court of Ohio held valid special compensation schedules for silicosis as one of twenty-two specific occupational diseases. The state of Rhode Island passed a compulsory health insurance law to go into operation Apr. 1, 1943. This provided needed cash compensation for unemployment caused by the worker's sickness disability. It does not provide medical care. The act is to be administered by the state unemployment compensation board.

Because of the labor shortage a series of experiments encouraging the use of the physically handicapped in war industry were initiated. The State Department of Education of Connecticut organized several rehabilitation clinics in an attempt to salvage the physically handicapped for war production. Potential employers were invited to visit the clinics to ascertain what special jobs could be filled by the physically handicapped with a degree of special training.

1941: Workmen's Compensation

Over a period of thirty years every state in the United States with the exception of Mississippi has adopted some type of accident compensation legislation. To be sure, the benefits are still inadequate in many states but there seems to be a trend toward increasing liberality in this respect. There is no doubt from our experience with the Federal Social Security Act that a Federalized workmen's compensation act would facilitate a maintenance of standards and encourage their adoption at a much more rapid rate than has been the case.

During 1941 a number of changes in the workmen's compensation laws of the various states has occurred. Oklahoma is one of the states in which fatal accidents are not compensated. In May 1941 both houses of the Oklahoma legislature adopted a resolution directing the Secretary of State to refer to the people a proposed constitutional amendment which would make possible the payment of compensation in those cases where death results from work injuries. Although no further action has yet been taken this is a step forward.

Rhode Island has passed legislation placing the operation of the workmen's compensation law in the hands of a commission. Delaware swinging from elective to compulsory compensation liberalized its benefits and included in its list of occupational diseases dermatitis, silicosis, poison oak and poison ivy. Washington also extended its coverage of occupational diseases. Colorado and Oregon placed upon industry the cost of financing safety work throughout the state. Florida wiped out 'horticultural' exemptions as well as exemption of workers in sawmills employing ten or less. It, too, liberalized its benefits and accelerated the claims administration. Illinois raised by 10 per cent the maximum amount of benefit payable in fatal accidents and occupational diseases. Maryland provided a fund from fines collected from those employers who were not insured, to pay the awards levied against such employers because of accidents. It also has transferred the administration of the State Compensation fund to five Commissioners of State Accidents paid on a per diem basis. It raised the maximum weekly benefits to $21 and made provision for a survey of the compensation administration. Washington increased its benefits and changed from a schedule to a general coverage for occupational diseases. Utah transferred its state fund from the Industrial Commission to the Finance Department and established a schedule of occupational disease compensation. Montana extended its welfare relief to silicotics while Pennsylvania made provision for actual payment of the state's share of compensation to silicotics.

Massachusetts required no-insurance employers to post a notice that their employees are not protected by workmen's compensation insurance. North Carolina and Ohio facilitated employee suits against no-insurance employers to prevent removal of property from the state. In 1940, 15,969 departmental summonses were served in New York State upon employers who were non-insurers. Of these, 2,861 were prosecuted. Workers employed by non-insurers suffered 1,345 accident injuries.

With the marked increase in employment during 1941 because of the defense program there has been a tremendous increase in industrial accidents. It has been estimated that a 30 per cent increase in employment resulted in a 70 per cent increase in accidents due to 'speed up' of defense production and to the fact that many new workers are insufficiently trained and informed. Furthermore according to the estimates of the Industrial Hygiene Foundation, absence from work because of illness is expected to average eight days per worker for the year. This would result in a loss of 1,000,000,000 man hours of work or at least the loss of 500,000 workers' full time. Cognizant of this trend Colorado placed a tax upon workmen's compensation insurance premiums to finance the safety work carried on by the Industrial Commission. Oregon also added a 2 per cent premium tax for safety work in addition to a 10 per cent allowance to the state compensation fund for the expenses of administration.

The District of Columbia changed the minimum wage administration to include industrial health and safety inspection under the new Minimum Wage and Industrial Safety Board. Colorado, Illinois, Montana, Ohio, Pennsylvania, West Virginia and Wyoming strengthened their mine safety laws. Boiler inspection administration was provided for this year in Iowa and Utah. Illinois adopted rock dusting to prevent the spread of coal dust explosions.

A Federal law was passed which provides for Federal coal mine inspection with the right of entry and authority to publish findings on safety and health.

There seem to be two trends in the development of workmen's compensation administration, one is legalistic, the other emphasizes social goals. The legalistic tends to measure compensation through schedules — specific compensation for the loss of a toe, finger, arm or leg. The function of the Board or Commission method of administration is to compensate according to need and to effect a program of retraining the worker through either a rehabilitation clinic or a vocational training program. Ontario has opened this year the first curative workshop in connection with the administration of the workmen's compensation act. Training is coordinated with a program that gives the injured worker an incentive to get well and return to work. The permanently injured worker draws compensation for life based on the extent of physical impairment, but he is retrained so that he may function in some other occupational group. In June 1941 the Canadian Government Employees' Compensation Act was made applicable to all persons being trained under the defense program whether or not they receive a wage or salary. Their compensation is based on $12.50 a week, the assumption being that this is what they were earning at the date of accident.

In the United States, the Federal Workmen's Compensation Law extended its coverage to include all injuries and deaths of workers engaged in all but excepted employment at military, air, or naval bases, acquired from foreign governments after Jan. 1, 1940. The United States Bureau of Mines indicated that in 1940 1,690 men were killed and 78,550 were injured in mining industries in this country. See also ACCIDENT PREVENTION.

1940: Workmen's Compensation

United States.

The State of Mississippi is now the only state in the United States without a workmen's compensation law. Arkansas approved its suspended workmen's compensation law by a referendum vote in 1940. The Bureau of Labor Statistics of the United States Department of Labor states that approximately 1,600,000 persons in industry were killed or injured in 1939; 16,400 fatalities or permanent disabilities, and 109,400 partial but permanent impairment accidents took place. Of the whole, 1,477,700 accidents involved total disability for a temporary period. These figures indicate that there was but a slight decrease in the industrial accident rate.

Little change in the compensation laws occurred during 1940, but much attention was focused on the adequate administration of these laws. Kentucky, however, increased the duration and the maximum amount limits of accident compensation in cases of death and total disability. In New York State benefits to totally disabled silicosis victims were increased from $3,000 to $5,000 maximum, to take effect December 1943. Medical care was extended to 360 days instead of 180 days beyond the first 90 days of continuous treatment.

New York celebrated the twenty-fifth year of Workmen's Compensation. Senator Robert Wagner, who first introduced the workmen's compensation measure in the New York State Legislature, and John B. Andrews, Secretary of the American Association of Labor Legislation, an organization which has fostered workmen's compensation in practically every state, were the outstanding participants in the celebration.

Alabama lowered her excessive numerical exemption of sixteen to 'employers of eight or more,' reduced the waiting period from two weeks to seven days, and required bond or proof of financial ability from non-insuring employers.

The reports of the State Industrial Commission of Wisconsin reveal that the number of silicosis claims fell to about five a month. In Wisconsin victims of this occupational disease receive compensation benefits equivalent to those received by workers disabled in industry.

In 1940 the New York State Legislature made some liberal changes in the Workmen's Compensation law. These substantially increase the maximum limits on labor cash compensation and medical care. The law, however, is still inadequate in its silicosis provisions. Silicotics are denied equal protection under the law. Those who are only partially disabled are denied both the right of compensation and the right to sue for damages. A similar condition exists in the Pennsylvania Workmen's Compensation law. (See also INSURANCE.)

Foreign.

There are significant trends in the field of workmen's compensation in Europe and Canada which will undoubtedly affect our own defense program. Personnel of ships of Canadian registry, or Dominion salt-water fishermen who die or are disabled as a result of 'enemy warlike action or counter action against the same' are covered by regulations providing for: (1) the payments of pensions; (2) free medical, surgical or other treatment, and compensation for loss or war damage to personal effects. In case of death or disability pension are payable to wife, widow, or orphan children of the deceased or disabled man.

In England under the Personal Injuries Act (Emergency Provisions) effective Sept. 3, 1939, war injuries sustained by civil defense volunteers and gainfully occupied persons are compensated for by pensions and allowance.

1939: Workmen's Compensation

The Social Security Act was passed to alleviate the economic insecurity arising out of unemployment and old age, but as yet there is no Federal legislation providing for the insecurity arising out of industrial accidents and industrial disease. Legislation providing protection for this phenomenon is left to the individual states and the degree of social responsibility accepted by each state. To be sure, Senator Robert Wagner introduced a bill during 1939 providing for a Federal system of workmen's compensation covering 2,000,000 workers employed in interstate commerce who are still without this type of protection. The bill was first introduced in 1932.

The system of workmen's compensation is a great improvement over the old damage-suit method of settling occupational accidents. There is a serious drawback, however, and that is the large number of states which still permit commercial insurance companies to make a profit out of the injuries of workers. There are only eighteen states having state compensation insurance funds which offer insurance at cost. Private commercial insurance companies have offered bitter opposition to the establishment of state insurance funds, and yet employers have suffered fully as much as workers when these companies with whom they were insured failed. Even in those states having state workmen's compensation funds there is provision for insurance by commercial insurance funds. Only seven states have exclusive state compensation funds.

'The primary purpose of workmen's compensation is to insure to injured workers certainty of payment of their awards in order that they and their dependants may be saved from destitution. . . . It appears as a matter of record that not a dollar in compensation payments has been lost to a worker protected under any of the eighteen state funds. The same security against monetary loss has likewise been afforded to employers as policyholders.' (Bulletin No. 30, Division of Labor Standards, United States Department of Labor, by John M. Andrews.) However, millions of dollars are lost by injured workers and their dependants annually, not only because of the failures of private casualty companies but also because employers have neglected to insure against accidents. In New York State, which has competing insurance compensation systems, almost $100,000 awarded annually as accident compensation is not paid to workers who are victims of uninsured employers. In the state of Ohio, which has an exclusive state fund law, the same total of uninsured awards is paid annually to injured workers and is charged to industry.

As a result of the sessions held in forty-four state legislatures this year a number of accomplishments in the field of workmen's compensation are to be recorded. Arkansas adopted a workmen's compensation law which remains inoperative until a state-wide referendum is held in 1940. This law necessitated an amendment to the State Constitution. Montana passed a law making workmen's compensation compulsory instead of elective. Compensation benefits were greatly liberalized in California, Connecticut, Illinois, Kansas, New Hampshire, and Wyoming. California extended compensation privileges to household domestic workers, while Nevada and Oregon extended the employer's right to merit-rating under the exclusive compensation laws of these states.

Connecticut increased its maximum weekly benefits from $21 to $25 and extended its coverage to include employees of the State Police, correctional, penal, and mental institutions. It also extended from three to five years the time for which a claimant may file claims for occupational diseases contracted while employed. Delaware also extended its coverage to include state employees injured while temporarily out of the state but on the job. Illinois increased its compensation benefit by 10 per cent after July 1, 1939. This increase does not apply to death benefits. Maine, likewise, broadened its scope of coverage to include police and firemen. The state of Washington added to its list of extra-hazardous industries the installing and servicing of radios and electrical refrigerators. It also expanded the definition of employer to include the independent contractor who is really an employee.

At its convention in Cincinnati, this year, the American Federation of Labor came out for a strong program of Federal standards to govern workmen's compensation laws and to prevent insurance companies operated for private profit from participating in such a program.

'In reorganizing and enlarging the whole program of social security the states need to improve the workmen's compensation laws, especially in expanding their scope to all industrial diseases, in eliminating private-profit companies from the compensation business, and in placing administration of the laws under State departments of labor or industrial commissions on which Labor is represented.'

There are all too few states which recognize occupational diseases as fully as important a social responsibility as industrial accidents. In New York State, compensation for silicosis was eliminated from the state compensation law in 1936. Since that time futile attempts have been exerted to restore this clause. In 1939 the Associated Industries of New York State again defeated a bill to restore silicosis to the list of occupational diseases covered by the insurance laws.

Ohio increased its coverage this year to include all occupational diseases peculiar to a particular industrial process and reduced the required period of exposure to silicosis from five to three years. It also increased the benefits to silicosis sufferers to the equivalent of industrial accident compensation.

A reactionary legislature in Pennsylvania in 1939 wiped out most of the gains made in 1937-38. It restored some of the common-law defenses to employers who elect not to be covered by the compensation laws. It reduced the weekly maximum benefit and also the number of weeks during which compensation might be paid. Also, payment for an occupational disease will be made only after it has developed within one year of employment instead of two. The claimant must have been employed in a hazardous occupation for at least four years, instead of two, of the last eight years. Although the employer is made liable for a larger percentage of the silicosis benefits than previously, the responsibility will not be completely recognized until Oct. 1, 1949.

In New York State the drastic cut in appropriations to the State Labor Department impaired its system of notifying injured workers of their rights to benefits and of hearings on compensation claims.

There is no doubt that the exclusive state fund insurance makes possible far-reaching economies in workmen's compensation. In these states employers report accidents to the compensation commission which investigates claims, determines benefits, and makes payments. In states where there is competition with private insurance companies, there is great duplication of work and increased cost of administration. Furthermore, it is conceded that under an exclusive state fund system like Ohio, the worker is protected even if the employer has failed to pay premiums.

It is recognized that a Federal-state system of workmen's compensation similar to that existing under the Social Security Act would tend to eliminate many of the evils of the haphazard state legislation which now exists.

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.