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Does a Bad Economy Mean Less Workers’ Comp Claims?

It’s the number one topic of discussion in most New Jersey workers’ comp courthouses. Has the down economy resulted in less claims or more claims? There are two schools of thought: (1) with the down economy, people are more afraid to lose their jobs by filing a workers’ comp claim, so filings will be trending downward; and (2) with the down economy, more laid-off workers will be more likely to file claims. Which one of these is right? Can we expect claims to fall or increase?

First, we have to admit that there is a data problem. The Division of Workers’ Compensation only published 19 years of historic data, so there isn’t a like period of downturn (the last time unemployment crested 9% Reagan was newly-elected president in 1981). Without hard numbers to crunch (unemployment rate versus number of claims filed) we are left with a statistical analysis of the figures we do have. Even this analysis is going to be severely flawed: New Jersey has been a harbinger of the greater workforce trend of the last thirty-years: the demise of ‘blue collar jobs’ and the rise of the ‘knowledge worker.’ New Jersey’s manufacturing, construction, farm, and trade labor categories have shrunk every year for the past two decades while government (number one growth industry in terms of jobs), professional, academic, and health professions have gained workers. The drop in claim petitions filed has followed this trend over the past two decades: from 53,637 new claim petitions field in 1990 to only 35,566 new formal claim petitions filed in 2007. Extrapolating from this years’ current inventory of filed claim petitions (23,000), 2009 is on pace for approximately 34,500 claims – which seems in line with last year’s filings. In other words, the gross number of filed claim petitions is likely to fall in 2009-2010, but this is more likely indicative of the general trend of job loss in high-risk industries like manufacturing and construction, rather than reflecting a trend where employees are more timid in suing their employers.

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