South Carolina: ‘highest workers comp costs in Southeast’

Boeing has long complained about the cost of doing business in Washington, with the state’s “high” workers compensation costs being one of them.

Now Washington state Republicans are gearing up to gut the state’s worker’s comp system in Olympia, saying that it was one of the factors leading Boeing to move its second 787 production line to South Carolina.

But a new report from — of all places — South Carolina casts doubt on that scenario. The South Carolina Civil Justice Coalition reports that the Palmetto state has one of the nation’s most-expensive workers compensation programs — not to mention an anti-business legal environment. The coalition describes itself as a pro-business group that lobbies in support of tort reform and workers comp relief.

It cites two studies, including one from the Small Business and Entrepreneurship Council, that both rank South Carolina among the 12 worst states from the standpoint of charging businesses high workers comp premiums. The Civil Justice Coalition noted that South Carolina’s workers compensation program was costlier than any of the surrounding states, branding it the worst in the Southeast.

Washington didn’t fare any better — in fact it ranked four spots behind South Carolina in the Small Business and Entrepreneurship Council’s ranking, coming in at  49th in this ranking. (That ranking, however, is disputed by the Washington State Labor Council, which points to data that shows Washington has the fifth-lowest workers comp costs in the nation.) But clearly, the notion that Boeing moved to South Carolina because of lower workers compensation insurance costs is ludicrous, given that South Carolina has one of the nation’s most-costly programs for businesses.

And when it comes to bad legal environments for business, South Carolina ranks 43rd out of the 50 states plus the District of Columbia, according to a study by the U.S. Chamber Institute for Legal Reform, which was cited by the South Carolina coalition. (Washington got a middle-of-the pack rating of 27 in the same ranking.) The report compiled the results of interviews with nearly a thousand corporate lawyers nationwide, asking them to rate the states based on such criteria as “judges’ impartiality and competence” and “juries predictability and fairness” in civil cases involving business.

The study noted that 64 percent of the corporate lawyers surveyed say their companies take the legal climate into account when making business relocation decisions, which makes Boeing part of the minority in Corporate America.

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