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Representing those injured in Iowa and Nebraska since 1974

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The race to the bottom

Workers' compensation insurance systems, like the one that covers most Iowa workers, was designed to do two things. It helps employees who are injured receive medical coverage for their injuries and it provides them with some income support to help them provide for their families during the recovery from that injury. This helps to prevent an injured worker from becoming permanently disabled and losing everything after losing their job and their income.

One of the "benefits" of the system is that it pays for various injuries on a fixed basis. If you lose a finger, you receive X dollars as compensation. Different states pay different amounts. This is often used by politicians to claim these payments need to be lowered to reduce workers' compensation costs and make the state more business-friendly.

Of course, the problem with an argument like this is that there is no logical stopping point. If one states pays a $1 per $100 in payroll, why not go to $0.75 or even less? Some states, like Indiana, have managed to have very low workers' compensation rates, but this has been done mostly by reducing coverage for workers.

While this may make a state "attractive" as a place to do business, it improperly subsidizes negligent employers, allowing them to transfer costs to their employees (who often are fired, because they no longer can work.) It penalizes good employers who take the extra time and expense to train their workers to use the correct safety equipment and enforce its use.

This type of a race to the bottom leaves workers with inadequate medical coverage and can lead to treatable injuries becoming permanent. It can result in the impoverishment of workers while rewarding negligent employers.

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