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By TOM OBRZUT JR.; Times Leader Business Writer
Tuesday, May 21, 1996 Page:
One of the impediments to attracting and keeping businesses in Pennsylvania
is the cost of workers’ compensation, said state Secretary of Labor and
Industry Johnny Butler.
Butler spoke to more than 100 people on Monday at a luncheon sponsored by
the Economic Development Council of Northeastern Pennsylvania. Later, he
toured Harris Semiconductor Corp. in the Crestwood Industrial Park in Wright
Township.
Butler said Gov. Tom Ridge has already improved the state’s business
climate by cutting the corporate income tax, reducing regulations and
improving education.
Now, the governor has his eyes set on workers’ compensation reform.
“It’s a major, major, major legislative initiative,” Butler said. “It’s a
major economic issue.”
In the past several years, 12 companies that have moved from Pennsylvania
to other states said they did so because of workers’ compensation costs.
Although the number of injuries has declined, people are staying on
compensation longer and driving up the costs.
Pennsylvania ranks in the top 10 for costs and benefits due to workers’
compensation claims, Butler said.
“We’re now on the threshold of costing healthy people their jobs,” he said.
If Ridge’s reform package is passed, Butler said:
Only legitimate claims would receive compensation.
Individuals on compensation would return to work as soon as possible.
There would be a correlation between compensation pay and salary. Now, some
workers receive more while on compensation.
Costs would be analyzed. Last year, the state spent $1 billion on legal
fees regarding workers’ compensation.
Any savings realized would be passed onto employers in the form of lower
premiums.
Butler expects the state Assembly to begin debating proposed changes in
four to six weeks.
At Harris Semiconductor, Butler got a first-hand look at the initial phase
of the company’s $250 million expansion project. He also viewed the
manufacturing process.
Al Sands, manager of quality and customer satisfaction, told Butler that
Harris practices a team concept. The company’s larger goals are transformed
into something teams can do, Sands said.
Because Harris was willing to invest in capital, it has been successful,
Butler said. Other companies can emulate Harris’ prosperity by instituting
long-term planning.
“Successes like this don’t happen overnight,” Butler said.