THE INDUSTRIAL INSURANCE PROBLEM IN WISCONSIN
Lorenz, M. O.
MORE and more are we turning our attention to the matter of compensating workingmen for injuries received while at work. We are rapidly awakening to the fact that our tremendous industrial activity...
...With a joint contribution of both employers and employees, considerable benefits could be paid without serious additional burden to the employer...
...C. M. & St...
...Lorenz, one of the foremost authorities on this subject in the United States, discusses in the following article some of the basic points upon which any consideration of the problem must rest.—Editor's Note...
...An injured workman now has the right to bring suit against an employer for damages...
...That is the essence of insurance...
...NOTWITHSTANDING the commonly expressed opinion that the Wisconsin legislature of 1909 has been a "do-nothing" legislature, we must regard the appointment of a special committee to investigate the subject of industrial insurance as a notable step...
...He might be given the option, as is done in England, to claim one or the ether, but not both...
...P., 119 N. W. Rep...
...Prevent Fraud THE prevention of fraud is another matter which European experience shows requires attention...
...More and more we are growing conscious of the fact that much of the hardship and uncertainty in the lives of workingmen is unnecessary if some of that same intelligence which has achieved so much in business organization is applied to the problems of social organization...
...If protection is good for firemen, policemen, and teachers, why is it not good for the wage-earner...
...The English law makes short work of this difficulty by requiring the employer to pay compensation to an injured workman in any employment...
...Voluntary insurance reaches the thriftier classes, not those who most need protection...
...Why such losses from an economic standpoint, and a humane view as well, regardless of any question of negligence, should not be treated as legitimate elements of the cost of production and distribution of products for human consumption, would be hard to say, satisfactorily, if at all...
...He should not get insurance benfits and recover damages from a negligent employer at the same time...
...The problem of industrial accident insurance is that of organizing a system of collecting money on a reasonable basis and distributing it among the persons who meet with injury while engaged in the dangerous work of the community...
...You probably cannot take away the workingman's right of suit entirely, and this would not be desirable, but it would be possible to repeal some of the laws which have been designed to make damage suits easier, and it would also be possible to permit the making of contracts, under proper safe-guards, to give up the right of suit in consideration of certain benefits...
...In England the government has very little to do with the matter...
...Accident Insurance not a New Problem ST is the question of accident insurance that has been brought into special prominence at the present time, but provident cooperative action has already received considerable recognition in this state...
...The number of persons who would injure themselves to get benefits is not great, but we may expect that the victim when injured will try to get the largest benefit possible...
...The new law in Switzerland provides as follows: The government contributes one-half of one per cent, of the wages, and the rest of the expense is divided, three-fourths being borne by the employer, and one-fourth by the employee...
...To what industries should the system apply...
...Both Italy and France experimented for many years with a voluntary system but finally introduced a compulsory system of compensation for injuries, and today there is no country that has a voluntary system in successful operation...
...It helps to distribute the shocks of life...
...Before the individuals living today have finished their careers, some will certainly be rendered helpless by sickness, accident, or old age...
...By what machinery should the money be collected and paid out...
...Those accidents to the workingman that can not be prevented by safeguards, must be made easier for him or his family to bear through some form of insurance-benefits...
...2) Our supreme court has sanctioned an extensive interference with the law of negligence as an appropriate exercise of the police power...
...Insurance means cooperation in the bearing of losses...
...This presents a problem upon which the wisest statecraft should be brought to bear...
...The question here is not what ought to be or might be under a different system than that of imposing liability for losses to employees through accidental injuries upon the nearest employers, but what is legitimate under the present system...
...The insurance system proposes to spend it in a better way...
...Danger would undoubtedly be the most important criterion for classification...
...The employer alone, or employer and employees jointly, or should the state also help...
...Would it not be sensible to have those who are fortunate enough to escape disaster give a helping hand to those who are struck down...
...Prudent employers now pay from a fraction of one per cent, to nine per cent, of their pay rolls (according to the occupation) to protect themselves against claims from injured workmen...
...It is sometimes said that to impose insurance burdens upon employers would drive them to other states where there is no such legislation...
...In a recent opinion (dissenting) in which he condemned a law because of an illogical classification, he says: "If this case should rest on the mere question of abstract right, from high moral ideals as to whether a person who is injured in the quasi public work of operating a railroad, should have his loss charged up to the industry as a whole, and so added to the cost of things to be consumed in the activities of life, no one would be more ready to take the side of the injured man than the writer...
...It says to the employer, You must pay the benefits when an accident occurs, either directly, or if you choose, you can arrange with a liability insurance company to do this for you...
...It may be you and it may be your neighbor...
...Who Should Pay the Bills...
...3) Could the courts regard an insurance system as an arbitrary or unreasonable attempt to exercise that power if the committee should find that such a system is necessary for the effective remedying of a condition which, in the words of an English statesman, we may call a great public scandal...
...This is not to be regarded as a fortuitous event, but rather as a sign of the times...
...We are rapidly awakening to the fact that our tremendous industrial activity involves an apalling loss of human life and maiming of human bodies...
...But it must be remembered that the insurance tax would not be in addition to, but in place of, a burden which is already in existence,—that of liability insurance under the law of negligence...
...much of it must always remain as a toll paid to occupations essentially hazardous...
...Another difficulty is the relation to our present law of negligence...
...Some Pointers for the Lawyers THE constitutionality of an insurance system must be left to the lawyers to discuss, but they should not omit to consider the following points: (1) The constitution does not directly prohibit such a system...
...The legislatures of New York, Minnesota, and Wisconsin, recognized the seriousness of the questions involved when they recently appointed special committees to work out a system of industrial insurance for their respective states...
...We now have laws providing for pensions for teachers, firemen, and policemen, and at this session, bills were introduced relating to pensions for county employees, members of the state militia, employees in state charitable and penal institutions, for soldiers, sailors and marines, and even for justices of the supreme court...
...In most cases the workman there prefers the definite and certain compensation to the uncertainties of a damage suit...
...A number of difficulties arise when one attempts to organize such a system, but that we shall be able to solve them can hardly be questioned when it is remembered that we are not trying a new experiment, but are following a well beaten path along which the leading countries of Eurpe have already passed...
...Kiley vs...
...In Germany associations of employers attend to the whole matter, with appeals to boards of arbitration and finally to the Imperial Insurance Bureau in cases of dispute...
...There is not space here to give much more than an enumeration of these difficulties...
...But most of the people of this state will not at any one time be rendered helpless in this way or in any way...
...Again, who should pay the bills...
...This is a difficulty with all forms of insurance...
...Part of this is preventable...
...Much of this money is wasted...
...A point of considerable difficulty is presented by the lack of uniformity in state legislation...
...The new law in Switzerland requires all the premiums to be paid to the Government Insurance Bureau, which also pays the benefits, either directly or through sick benefit associations...
...This difficulty simply indicates the necessity for a careful organization of a medical service...
...In Italy small establishments employing five men or less are excluded except where there is special danger...
...Let Justice Marshall answer...
...WE are confronted at the outset with the question whether the system should be compulsory or voluntary...
...We can, at best, bring up the rear of the procession...
...In Italy, the employer is told that he must insure, but he has the option of doing it in a government fund, by purchasing liability insurance from a private company, or by organizing a mutual insurance association with other employers...
Vol. 1 • July 1909 • No. 27
