(August 9, 2011 – Madison, Wis.) – The passage of workers’ compensation legislation by nine states in 1911 was the beginning of a profound societal shift within the American workforce. In what has become known as the “Great Compromise,” workers’ compensation was the result of labor and management negotiations to find an equitable solution to more frequently occurring industrial accidents. Workers’ compensation has proved remarkably durable over the past century and can be recognized as one of the most enduring examples of labor and management cooperation in the country.
As the United States entered the twentieth century, labor and management relations were mired in animosity and mistrust. Workers had spent decades struggling for what we regard as basic labor rights – a standard working day, minimum wage and safer workplaces. Employers saw these demands as one step toward socialism and were fearful of any intrusion into their business practices. Striking, followed by rioting and violence, was escalating and both sides understood a solution had to be found.
In Wisconsin, labor and management debated for nearly two years. University of Wisconsin Professor J.R. Commons finally persuaded the business community that “workman’s compensation…is not a panacea to be feared” and would ultimately help preserve fundamental tenets of capitalism. In order to finalize the deal, both sides made concessions. Injured workers would be guaranteed medical treatment and wage-loss payments as they recovered, but would no longer be allowed to sue employers for damages. Employers were protected from expensive lawsuits with uncertain monetary awards but would have to purchase workers’ compensation insurance. This basic agreement endures today, with few exceptions, across the United States.
The spirit of compromise that led to workers’ compensation is still evident in many state systems. Wisconsin has relied on the guidance of an advisory council, made up of labor and management representatives since the earliest days of the system. The Wisconsin Council on Worker’s Compensation was formally adopted into statute in 1967 and is currently made up of five representatives of employees and five representatives of employer with the mandate to “submit its recommendations with respect to this chapter to each regular session of the legislature.”
Their record of success is unbroken. They have unanimously agreed on biennial legislative packages since their creation in 1967, and some individuals suggest an informal consensus process is unbroken since 1913. This process ensures that refinements to the workers’ compensation law represent the workers and employers of Wisconsin and represents “incremental, moderate and balanced changes to its laws,” notes John Metcalf, Administrator, Wisconsin Division of Worker’s Compensation.
The reliance on the Advisory Council process in Wisconsin, and in other states, demonstrates that government programs can be guided by the people. In fact, lasting success can be achieved when we rise above partisan demands and special interests. Americans can proudly toast 100 years of workers’ compensation protections and celebrate it as a model of cooperation and progress.
Wisconsin workers’ compensation professionals and colleagues from across North America will celebrate the 100th anniversary of workers’ compensation during the Workers’ Compensation
Centennial Celebration on August 24, 2011. Through a series of innovative and interactive programs, participants will explore the past, present and future of this landmark social insurance program. More details about the Workers’ Compensation Centennial Celebration can be found at http://www.iaiabc.org/convention2011
Historical background: The first constitutional state workers’ compensation law was signed on May 3, 1911 in Wisconsin. The first insurance policy to be issued under the new law took effect on September 1, 1911. Eight other states passed similar workers’ compensation laws by the end of 1911.
About the IAIABC
The IAIABC is an association of government agencies that administer and regulate their jurisdiction’s workers’ compensation acts. Along with these government entities, various private organizations involved in the delivery of workers’ compensation coverage and benefits participate in the IAIABC. Since its inception in 1914 the IAIABC has worked to improve and clarify laws, identify model laws and procedures, develop and implement standards, and provide education and information sharing. The IAIABC strives to gather the best resources available to solve the practical administrative and operational problems of its members.
Contact
Jennifer Wolf Horejsh, IAIABC Assistant Director Phone: +1 608-663-6355 Email: jwolf@iaiabc.org
