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Insights
Why Wage Inflation Matters in Workers Compensation
Why Wage Inflation Matters in Workers Compensation
NCCI Page Content Two
InsightsResearch & Briefs
 
 
 
By Anae Myers, Carrie Wang, and Kirk BituOctober 31, 2022
 

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Page Content

INTRODUCTION

As we emerged from the COVID-19 pandemic, a labor shortage became apparent. To lure workers back to the workforce, wages needed to increase. As a result, all economic sectors have experienced wage growth, and lower-wage workers are seeing the fastest percentage growth among all workers.

KEY FINDINGS

  • Wages grew fastest in recent years for low-paying jobs, and the growth was particularly strong in 2021
  • Amid the Great Reshuffle, wage growth varies significantly by economic sector
  • High-wage earners have a relatively lower share of injuries than low-wage earners
  • Nonuniform wage inflation is more impactful in states with:
    • High minimum weekly indemnity benefits
    • Low maximum weekly indemnity benefits
  • State Average Weekly Wage (SAWW) indices, which influence state indemnity benefit levels, may increase by a greater amount than normal in the near-term, reflecting the nonuniform wage inflation

Where did wage inflation occur, and how does it impact the workers compensation (WC) system?1 And how does NCCI account for these changes in its ratemaking methodology? Find answers to these questions and more in the complete report.

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.

1This analysis generally follows the structure of NCCI’s AIS 2022 presentation “Why Wage Inflation Matters in Workers Compensation.” However, the data has been updated in certain exhibits.

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NCCI Page Content Right Top

COMPLETE REPORT

Complete Report Why Wage Inflation Matters in Workers Compensation (PDF)
 


REL​ATED CONTENT

Related Content Image Quarterly Economics Briefing (QEB) - Q2 2022
Related Content Image Why Wage Inflation Matters in Workers Comp
 

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