Brooklyn's Progress
September 2003

Story provided by the Business Council of New York State

ALBANY-Workers' compensation costs for manufacturers in New York remain far above those in most states, a new study shows.

As of January 1, 2003, comparative costs for manufacturers in New York were 29.3 percent higher than the national average, and higher than all but five of the 45 states studied. The analysis was performed by Actuarial & Technical Solutions, a consulting firm in Ronkonkoma, New York.

The extra cost of workers' compensation for New York manufacturers was down sharply from the mid-1990s, when it was as high as 57 percent. The gap has risen somewhat in recent years, though, from around 20 percent in 1998 and 27.7 percent in 2002.

"New York lost more than 30,000 manufacturing jobs in the past year," said Business Council President Daniel B. Walsh. "We must make the state more competitive, including reducing the enormous cost of workers' comp."

The average nationwide cost for workers' compensation insurance for manufacturers increased for the second straight year after seven straight years of falling, according to the Actuarial & Technical Solutions study.

Comparative costs in every neighboring state were lower than those in New York. Costs in Massachusetts were 29 percent lower than the national average, while those in Pennsylvania and New Jersey were only slightly above average. California had by far the nation's highest comparative costs, at more than three times the national average.

The state Insurance Department recently rejected a proposed 11 percent increase in workers' compensation rates, leaving current rates in place for the coming year. The department approved an increase in the workers' compensation assessment, a tax on premiums that all employers must pay, from 13 to 14.3 percent.

The Actuarial & Technical Solutions study analyzed manual rates, the starting point for calculation of premiums for individual employers, as well as taxes and assessments levied on insurance carriers and other elements of the premium bills employers pay. Employers that self-insure for workers' compensation are not included. Differences in types of manufacturing employment from state to state are adjusted for purposes of calculating comparative rates. Five states that provide workers' compensation exclusively through a state fund -- North Dakota, Ohio, Washington, West Virginia and Wyoming -- were not included.