Michigan Comp Rankings Improve

July 11, 2003
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LANSING — At first glance, Michigan businesses seem to have done a better-than-average job in a short time about improving their safety records, at least in comparison to other states.

That’s one construction, at least, to be put on the results of a recent study that shows workers’ compensation premiums for Michigan workers have dropped substantially in contrast with those of all states and also the 10 most populist states.

Whether that comparison makes Michigan more competitive in industrial recruitment isn’t clear, since costs such as workers’ comp premiums probably don’t net out the same in Michigan as in other states.

If nothing else, however, David C. Hollister, director of Michigan’s Department of Consumer and Industry Services (CIS), argues that the ranking makes Michigan look better to potential investors.

“One important but potentially expensive cost of doing business in any state is workers’ compensation protection for those who become injured on the job,” he said.

“In Michigan, we’ve worked hard to reduce our workers’ compensations costs,” he added, “which helps to create a climate that is attractive to drawing new businesses to the state and to retaining those already here.”

What the national study revealed is that Michigan’s average workers’ compensation premium was $2.25 per hundred dollars of payroll in 2002.

That dropped this state from its 2000 ranking of 23rd out of the 50 states (plus the District of Columbia), to 30th.

The CIS announcement of the study’s results did not reveal whether the state’s improved ranking resulted from lower premiums stemming from the diligence of safety practices by Michigan companies, or from the escalating costs of insurance in other states.

Whatever the case, firms in California pay the nation’s highest workers’ compensation premium: $5.23 per hundred dollars in payroll.

North Dakota employers have the lowest rate at $1.24.

Among the nation’s most populous states, Michigan had the ninth lowest rate, tied with New Jersey.

Rates in the other eight states — many of them Michigan competitors for job development — ranked in order of workers’ comp premiums per $100 in payroll were:

  • California, $5.23

  • Florida, $4.50

  • New York, $3.13

  • Ohio, $2.89

  • Illinois, $2.73

  • Pennsylvania, $2.57

  • Georgia, $2.32

According to David A. Plawecki, a CIS deputy director, the study covers more than 380 code classifications based on job type and the risks of injury on the job.

Plawecki’s function is to oversee Michigan’s workers’ and unemployment compensation programs. 

He noted the study’s authors had to find a balance between workers’ comp costs for safe positions — say those entailing chiefly office work in which premiums are less than $1 per $100 of payroll — to hazardous occupations such as logging, for whom a firm might have to pay $35 in comp premiums for each $100 of payroll.

The study neither delineated nor ranked the net effect that workers’ comp rates exert on business costs from state to state.     

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