COST OF COMPENSATION c 9
The classifications shown account for 62.89} of the total
payroll and 43.89, of the total premiums earned for policy
year 1923. It will be noted that, while rates in many cases
have increased greatly over those initially in effect, in some
cases the differences are not so marked, while in others the
rates have actually declined. The explanation for this lies
in the fact that, in the beginning, rates were in some cases
set too high and that accident costs in individual classifica
tions vary according to accident frequency and severity. It
1s agreed that the largest influence on rates has been the
great increase in payrolls over the 1914 period. If wage
levels had remained stationary, all the rates would have been
very much higher than shown.
The relative hazard of the various occupations listed as
determined by accident experience is well illustrated by the
last column showing rates which became effective on June
30, 1926. Iron and steel erection is far in the lead as the
most hazardous occupation, a rate of $27.45 being considered
necessary to cover losses. In other words, the employer
must pay an amount equal to more than one quarter of his
payroll to obtain compensation insurance. Carpentry ranks
second, with a rate of $18.71, and logging and lumbering is
third, with $17.23. Blast furnaces lead the manufacturing
occupations, with a rate of $8.68.
That the trend of compensation rates has been quite con-
sistently and steadily upward is well established by Table 36.
This steady increase has caused considerable dissatisfaction
among employers as may be seen from the accounts of their
experience with workmen’s compensation. Many of them
probably do not understand the reasons behind rate increases
or the actuarial formula for determining their amount. Fre- |
quently the employer has felt that his industry was not prop-
erly classified, that the rates were too high for the hazards
involved and that the safeguards and hospital units which
he had installed had not been duly discounted. In fact, one
company found that instead of reducing the yearly premium,
the credit allowed for a hospital unit was taken away by re-
ducing the experience credit and thereby increasing the ad-
justed rate. Some employers feel that their safety records
have not been sufficiently taken into account. One of the
73%
