The cost of doing business in Illinois is staggering. Such is the nature of a bottom-feeding government and union-driven model that adds inefficiencies everywhere you look and also in places you don’t.

For example, over 35% of Illinois state employees are on workers’ comp. That statistic would be bad enough in isolation, but Illinois also has the highest costs in the nation, by far.

Please consider Workers’ comp reform is too important to state business climate not to address, soon

If you need a local example to illustrate in real dollar terms just what it means to have the second highest workers’ comp costs in America – behind only Alaska, by the governor’s own admission – look no further than Morton-based CORE Construction Group Ltd., which operates nine companies in five states.

Marc Collins, associate risk manager for CORE, compared five years’ worth of claims between the local construction firm Otto Baum Company and Sun Valley Masonry, another of their holdings in Phoenix, Ariz. The two companies are of similar size, with about the same number of employees. What he discovered was that local claims averaged $32,807 each over that time frame, compared to $6,212 in Arizona.

Caterpillar – which obviously deals in much bigger numbers – has an even more dramatic story. In 2008, “the total incurred cost of the injuries at the Illinois plant was seven times higher than the cost of the injuries at the Indiana plant.” The jobs are essentially the same.

It’s not just the wage coverage while injured employees aren’t working for months or even years, but the medical bills and often the settlement beyond that (all tax free, by the way). In fact, “even if the medical fee schedule were reduced by 30 percent, Illinois would still have the second highest rates in the nation, but our employers could save up to $500 million,” acknowledges the governor’s office.

The startling statistics do not end there, unfortunately. State government is an employer, too, with approaching 70,000 full- and part-time workers. And from that pool there are currently 25,000 open workers’ comp claims. That’s a breathtaking number. It is impossible to believe all of those are legitimate.

Apparently federal investigators have questions, too, as they’ve launched a criminal probe following reports by the Belleville News-Democrat of alleged abuses of the system at Menard Correctional Center in Chester, where more than half the staff – 389 people, most of them prison guards and including the warden – have been paid some $10 million for on-the-job injuries such as those occasioned by locking and unlocking cell doors. (Yes, you read that correctly.)

Meanwhile, a quarter of the 32 arbitrators who decide injury claims for others have filed claims themselves, reported the paper.

Illinois vs. the Second Worst State

  • Hernia: $18,700 in Illinois, the next closest state comes in $6,300 less.
  • Shoulder or Elbow Injury: $24,000 in Illinois, compared to about $14,300 for the runner-up
  • Arthroscopic Procedure: Illinois is double its nearest competitor, more than triple the median

I am seldom surprised by graft in Illinois where public union handouts, inefficiencies, bribery, coercion, and corruption are second to none, but 35% of state employees on workers’ comp, including 25% of arbitrators who do nothing but decide injury claims has to take the cake for workers comp insanity.

Worst-in-the-Nation “bragging rights” are at stake. I challenge California, New York, and New Jersey to top that.

Mike “Mish” Shedlock
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