Insight, analysis & opinion from Joe Paduda


Good news…Monday. Rising wages + Lower inflation = Higher portfolios

About to head home after two weeks in Southeast Asia…off the grid for much of it.

Here’s the good stuff that happened whilst I was floating down the Mekong River.

Wages are up…

and have been rising steadily for the last 3 years…outpacing inflation.

And will keep going up…

From The Economist – “A blue-collar bonanza is under way…three forces that shape labour markets—demand, demography and digitisation—have each shifted in ways that benefit workers.”

If you’ve had to hire a plumber, carpenter, or electrician recently, you know what they’re talking about.

Implication – higher wages = higher premiums.

While inflation continues to drop…

One economist got this right, while many just endlessly caterwauled about the imminent rise in unemployment and drop in wages necessary to tame inflation.

Gotta love economists…or not.

Fuel prices continue to drop…leaving more dollars in our pockets

All this good economic news – consumers have more money to spend, employment remains very strong, and prices are moderating means there will be…

More dollars in your investment portfolio

You’ll likely see your investment portfolio rise in value…BofA, RBC, and Deutsche Bank are among the firms predicting record returns in 2024.

What does this mean for you?

As you start your week, don’t buy into the “economy is awful” nonsense. 

Finally – -one of the keenest observers of trends in business and the body politic is Scott Galloway of NYU. I highly recommend his weekly newsletter.


Customer service, bean counters, and Too Big to Care

During another holiday week a few years back I penned a terrific post on customer service. If I do say so myself, and I do.

Customer service comes to mind as I sit on a transcontinental flight from NYC to Singapore to attend our son’s wedding.

For once I did the smart thing…my lovely bride and I are on Singapore Air, consistently the top-rated airline for customer service. Oh my what a difference between this airline and any other I’ve flown in the past several decades. And I’ve flown a LOT.

Singapore Airlines is…fabulously wonderfully totally about its customers.

One incredibly tiny example…I got up to use the restroom, and an impeccably polite steward very diplomatically noted that cabin service had been halted due to turbulence and perhaps I should stay in my seat unless my sojourn was of utmost importance. I aborted the trip and returned to my seat.

Five minutes later anther flight attendant came by to inform me that things were back to normal and I could safely walk about the cabin. A tiny thing, totally insignificant and yet a blindingly clear demonstration of how serious these people take customer service.

Management clearly gets it. And I will fly Singapore whenever I possibly can. Because any time a flight attendant is that focused on customer service, it is because the entire enterprise is – most importantly top management.

Allow me to reprise the post from 2018, as it is even more topical today.

To that point, here’s an example of a huge business that completely misses the point.

This summer (back in 2018) American Airlines allowed flight attendants to give little things to passengers upset about delays or other problems. Frequent flyer miles, drink coupons, seat upgrades, stuff that didn’t cost AA anything but made angry passengers feel that AA cared about the problems the airline caused.

Then, some genius at HQ decided this was a bad idea.

This from Forbes:

Every time some bright young marketing executive tried to make American (or some other airline) more responsive, and more quickly responsive to passengers’ dissatisfaction by empowering front-line workers to offer some form of compensation, the bean counters back at headquarters quickly noticed that the cost of such empowerment escalated rapidly. The result, alas, always has been the dramatic reduction or elimination of front-line workers’ authority to solve customer service issues at the point of contact.

Instead of fixing the problem, the corporate knuckleheads tried to deal with the fallout – but stopped when it cost too much. 

update – American is currently rated #82 out of the world’s best airlines. Well behind RyanAir (!!!), Air Mauritius and Azerbaijan Airlines, This isn’t due to American’s front line workers, rather management decided service is about #82 on their list of important things.

This is exactly what killed US manufacturing, autos, and many other businesses. At the end of their assembly lines, GM, Ford, and Chrysler diverted many just-built cars with manufacturing defects to another mini-factory.

Auto worker using hammers to straighten a hood on a just-built car…

There, very skilled and very expensive workers diagnosed and fixed cars that had just been built. These guys are yesterday’s American Airlines flight attendants, tasked with fixing problems caused by management.

Clearly senior management didn’t understand that if they spent the time and energy and dollars to do it right the first time, they wouldn’t have to a) fix problems with cars they just built, and b) deal with pissed-off customers.

Yes, it takes that time and energy and dollars. But the results are measured in customers kept, service problems eliminated, and extra costs avoided.

Or, you can just wait for your businesses’ version of Honda to come in and eat your lunch.

What does this mean for you?

Find out what your customers want, and do it right the first time. They will love you and reward you for it.


Good news Friday, inflation is deflating

In what can only be described as excellent news, inflation is down to 3.2%.

Further good news – ahead of the heavy Thanksgiving travel week fuel prices are continuing to drop… in 11 states average prices are below $3 a gallon.

And there’s this really wonderful story about a gay professional hockey player’s journey...the response to his coming out announcement has been overwhelmingly positive – especially from other pros.

Gotta love the love.



Wildly off-topic…Reasons to support Ukraine, Part One

Some think we should not be helping Ukraine protect itself and its people from Russia and the Russian invasion.

They note it is expensive, the battle is far from our shores, it isn’t any of our business, we have other priorities.

Here’s why it is most definitely in our best interest to help Ukraine.

  1. The world is a dangerous place, and enemies large and small – Iran, North Korea, the Taliban, jihadists, and frenemy China – are always looking for signs of American weakness.

    If we had not provided aid and arms to Ukraine, Russia would have taken Kyiv (the capital of Ukraine) and own Ukraine today…and Iran, North Korea, the Taliban, jihadists and their ilk would be plotting attacks on us. 

    Instead, those enemies are watching a large and once-powerful country – Russia – get its ass kicked by a much smaller country, in no small part because we are supporting Ukraine. That ass kicking is most certainly giving would-be attackers nightmares… thanking whatever entity they worship they didn’t do something as blindingly stupid as taking on an ally of the US. 

  2. War prevention – specifically Taiwan. As very/extremely conservative commentator Marc Thiessen notes:

    how much…would U.S. weakness in Ukraine embolden Chinese dictator Xi Jinping? The risk of war over Taiwan would skyrocket. And, unlike the war in Ukraine, it could very well involve U.S. troops. [emphasis added]

    Think of Xi’s calculation: If the United States won’t stand fast for Ukraine, an internationally recognized sovereign state, how likely is a stalwart defense of Taiwan, which is not? And if the United States is not willing to spend money to defend Ukraine, is it really going to risk American lives to defend Taiwan?

    China’s military is massive, has thousands of missiles, will soon have the largest navy in the world, and is increasingly belligerent.

    Chinese ship attacking Vietnamese coast guard ship

    After pushing around small countries like Vietnam and the Philippines and doing its damndest to illegally expand its territory, many of its leaders are were wildly over-confident. Watching as Russia’s battle-tested, quite experienced, once well-equipped and still very large army gets hammered by a much smaller country allied with the US is undoubtedly forcing Xi and his generals to think a lot harder about screwing with America and our allies.

  3. The elimination of one of our two most dangerous enemies cost exactly no American lives.
    Putin is an extremely dangerous dictator and Russia is our enemy.
    Presiding over a country with very serious financial, demographic, ethnic and economic issues, Putin did what most dictators in that situation do – pick a fight with a supposedly weak neighbor.

    For Putin, the result has been catastrophic, eliminating Russia as a threat to  the US and our European allies. More than half of Russia’s armored vehicles and hundreds of aircraft have been destroyed, stocks of missiles and rockets have dramatically shrunk, hundreds of thousands of soldiers have been killed or grievously wounded, its Navy has lost much of its war-fighting capability.

    Russia’s military infrastructure is in deep trouble…every day there are new reports of factories making munitions, armored vehicles, explosives and missiles mysteriously exploding.

    a “fireworks” factory is now rubble…

As brutal and awful as it is, we are much safer because hundreds of thousands of Ukrainians have died, millions have lost their homes, and hundreds of towns, villages, and cities have been destroyed.

What does this mean for you?

Thanks to the Ukrainians, the world is less dangerous today – which is a good thing indeed.


Good news Friday – unemployment and wages are up…inflation is DOWN!

Sometimes the experts get it wrong – really wrong.

Which can be very good news indeed.

Exhibit 1 – Surprising many economists, the “soft landing” – reducing inflation WITHOUT super high unemployment – is real.

A key indicator shows the inflation rate is now lower than it was 2 years ago.

Now…you will hear some caterwauling that this or that measure is wrong because it isn’t what people actually buy. Okay, let’s look at what people actually spend their money on – a metric called the “Harmonized Index of Consumer Prices” – it’s the green line in the graph below.

As of July 2023, that rate is a paltry 2.5% – right in line with the Fed’s desired inflation rate.

Make no mistake, engineering a soft landing defined as fixing inflation without high unemployment – is rare indeed…Those of us who remember the early eighties recall mortgage rates of 17%, unemployment in the high single digits, and a job market that was horrible/awful/lousy…(I graduated college in 1980…)

The other part of this is wages…which have gone up by about the same amount as inflation – except for nonsupervisory workers.

Those workers have seen “considerably” higher wage increases. The recent strike settlements will make those workers even happier…which will drive consumer spending…which drives the economy…which increases tax revenue…which lowers the deficit.

For some reason a lot of folks don’t believe things are going well…in fact, a recent poll “found that 51% wrongly believe that unemployment is nearing a 50-year high rather than those who believe it’s actually low (49%).” [emphasis added]

When you’re in a funk it can be tough to believe there’s good news…but things will get even better.

Over the next decade, the Inflation Reduction Act, CHIPS Act and other legislation will create another 1.5 million jobs – per year. Source is Moody’s Analytics)

What does this mean for you?

The economy is good – and getting better – and this is very good news indeed.




Good news Friday (really)

Yeah…I know, this was a really awful week.

At times like these I retreat into the “control what you can control” mantra…Can’t do a darn thing about the Middle East or the incredibly dysfunctional House of Representatives…but we all can do something.

So, a couple thoughts.

Be outwardly cheerful and engaging, smile at everyone you see, say hello, and wish them well. Some will growl (looking at you, NYC pedestrians), some will smile back, others will wonder what’s wrong with you, but you’ll make things just a bit brighter for many.

It will also improve your mood…guaranteed!

Do something to build community – anything. Call someone you haven’t spoken to in a while, stop by a neighbor’s to just say hello, send a card to a distant friend or relative, maybe drop off cookies at a friend’s desk or home, get a few friends together for a walk, hike, ride…no agenda, just connecting.

At times like these we need each other more than ever.

And if you need something positive to talk about…inflation is moderating…sure it is still higher than the Fed’s 2% target, but things are improving.

And, when you unpack the latest inflation data, housing prices increased more than expected…further unpacking by ABC News found “unusual jump in housing prices in Los Angeles as accounting for much of last month’s housing inflation, which may not be sustained. ”

So, for those of us not looking for a place to live in LA, prices aren’t increasing nearly as much as they were just a few months ago.

What does this mean for you?

You’re all set to be the cheerful bright spot at the barbecue, tailgate, kid’s soccer game, or morning walk.






Walls or windows?

This email arrived earlier this week;

I really enjoyed your newsletters until you started showing your political side; It’s unfortunate that you had to make that known to your audience.

I’ll leave aside the fact that I’ve been “showing my political side” for the more than two decades I’ve been writing MCM, moreover I’ve been transparent on my views on everything from:

  • opioids to
  • politics to
  • physician dispensing to
  • Congressional Republicans’ attacks on the ACA to
  • Russia’s war on Ukraine to
  • vaccination skeptics to
  • the work comp industry’s failure to understand health care to
  • TPA profiteering on managed care fees to
  • some state legislators’ unconscionable failure to expand Medicaid to
  • Texas’ legislators ridiculous grandstanding
  • and about a gazillion other topics.

What is distressing about the former subscriber’s note is the underlying unwillingness to consider alternative viewpoints, to open one’s mind to different ways of thinking through issues, of critically evaluating one’s own beliefs.

That is especially true today, when we seem more willing to build walls than open windows.

I’d bet exactly none of my 2,510 subscribers agree with every one of my opinions and posts – nor should they. As I’ve publicly admitted, on occasion I’ve been wrong on facts, gone a bit too far or changed my opinion (right Rob Gelb?), mostly because a reader challenged me to think differently or I’d been lazy or lax in my research.

What’s distressing about the former subscriber’s note and subscription cancellation is it is symptomatic of a much broader “closing of the American mind.”

We lament society’s polarization while refusing to engage with others who may have different views.

We ostracize others for their views on a single subject, when we may well agree on most things.

We decry government’s ability to get anything done while supporting candidates who refuse to compromise.

I’m quite sure the unsubscriber and I agree on many things…perhaps the evil of Purdue Pharmaceuticals, the unconscionable profiteering of physicians dispensing drugs, the questionable ethics of non-transparent claims “fees”, the critical importance of getting patients to the right provider quickly, the problems with brokers and consultants who follow the latest fad instead of doing the hard work to actually help their employer clients (nurse triage, anyone??).

Alas we’ve become latter day Inquisitors, willing to demonize anyone that doesn’t agree entirely with us. The Pope’s inquisitors tortured, burned, and crippled Cathars for the sin of their different interpretation of Catholicism.

Today, nine centuries on, we are at risk of returning (hopefully only metaphorically) to the horrific days of the 1300s.

What does this mean for you?

We are far more alike than we are different, share far more similarities than differences. 

Let’s try.



Good news Friday…

Well, in an effort to counter the stupidity that has infected some in Washington, I’ll do my best to find glimmers of good news to start your weekend.


Ukraine is making solid if not spectacular progress in its offensive…and the news that we are sending very capable missiles may help our allies speed things up. The missiles – known as ATACMS – are very elusive and pack a big punch. These are NOT the long range ATACMS…at least not yet.

Grain, shipping, and avoiding world hunger

Resilient Africa headed south to deliver grain

Most notably, Ukraine has figured out how to win the war at sea – without having any ships. This has enabled Ukraine to ship grain to Africa and other places , a huge help for people at high risk of starvation. Seven ships have passed through Ukraine’s “grain corridor” despite Russian threats to sink any and all ships.

Aging…or not.

Big medicine is spending gazillions on research to help us live longer. While that’s kind of a good thing, reality is most of what kills (excluding firearms, traffic accidents, and drugs) us is due to:

  • not enough exercise
  • not enough sleep
  • too much food
  • too much alcohol

So, the “good news” is if you commit to exercising (cardio and strength), sleep, a healthy diet and one drink per day, you won’t need to buy whatever Big Medicine is selling.

And you can use those dollars to buy books, go to concerts, visit your grandkids, and donate to worthy charities!

Lastly, Crime.

News from the FBI that its efforts to combat violent crime is yielding dividends.  From the FBI…The FBI, alongside its state and local law enforcement partners, executed over 4,000 arrests, over 2,500 drug seizures, over 1,600 weapons seized, and the dismantlement of over 50 violent organizations.

remember that when some knucklehead politician says he’s going to eliminate the FBI..

(note three family members worked for the FBI (two were special agents), one died in the line of service, so, yeah, I’m “biased”)




1 +1 = 3

Two mostly-ignored things will have way more impact on workers’ comp than any other ten factors.

And as usual, workers’ comp is out to lunch.

Let’s quickly review the work comp industry’s failure to understand reality.  When COVID hit, the workers’ comp industry’s caterwauling and catastrophizing hit epic levels… mostly driven by

That led to far too much angst and far too little reality-based planning by the workers’ comp industry.

Fast forward to today, where the opposite is happening.

The industry is blithely ignoring the impact;

  • heat will have on claims, loss ratios, combined ratios, and claim duration, and
  • infrastructure investment will have on premiums and claims.


The massive and seemingly endless heatwave in multiple states is affecting restaurant workers, agricultural workers, folks in logistics and manufacturing.

Sure there’s heat exhaustion and heat stroke and heat prostration (which costs about $38k per claim…)

But that’s the (forgive the analogy) tip of the iceberg…Excessive heat also creates more injuries of all types…injuries to cherry harvesters in Washington State increase 1.5% for every 1 degree C above 25 C (77 degrees F) – mostly from falling off ladders.

Oh, and California data shows: compared to days with temps in the 60s,

      • on days when the temperature was between 85 – 90 degrees Fahrenheit…the overall risk of ALL types of workplace injuries was 5 to 7 percent higher.
      • when temps topped 100 degrees, the overall risk of injuries was 10 to 15 percent greater.

This means more claims in an industry that is generally unprepared to “manage” heat-related claims.


Hundreds of billions of dollars is flowing into infrastructure, investment that has already created ninety thousand jobs in:

  • construction,
  • transportation improvements,
  • highway, bridge and road maintenance and replacement, and
  • heavy industry.

And many more jobs are on the way. (check out where this is happening here).

These are very well-paid, high-frequency and high-severity jobs.

This means premiums will increase as will claims and claims costs. And this will continue for years.

What this means for you.

At risk of belaboring the obvious, a more dangerous environment for many more workers  in already high-risk jobs. 

Heat + Jobs = more premium dollars, higher costs for self-insureds, more claims, and higher severity claims.




A week away from the blog is now past…here’s what I missed.

myMatrixx’ Chief Innovation Officer Cliff Beliveau – one of the smartest and most articulate tech people I have ever met – penned an excellent summary of AI’s potential uses in and impact on workers’ comp in yesterday’s WorkCompWire.

Cliff highlights key opportunities and challenges in claims, medical management, fraud detection and claims oversight…download his piece and save it.

Will automation disrupt construction? A better question might be “when will automation disrupt construction?”

Even better “when will what parts of the construction industry be disrupted by automation?”

All are addressed here.

Net is this – the author isn’t convinced we’ll see massive automation within the next decade...but points to a key use of technology that is already speeding up construction  – and making it more efficient to boot.

Surprise! medical bills and Junk healthplans – defined as plans with significant limits which often aren’t clearly identified up front – are facing increasing scrutiny. The White House is proposing strict disclosure standards and time limits on junk plans…

“The new proposed rules would close loopholes…that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no coverage when they need it most,”

The two – surprise! bills and junk plans, sort of complement each other…the junk plans don’t protect families from healthcare providers’ aggressive billing practices.

The proposed rule would highly limit duration of the plans, requiring clear disclosure of policy terms (as in written in English), and close coverage loopholes.

And one more note of interest for smaller employers looking at self-funded plans, and especially level-funded plans...AM Best’s April 28 2023 Market Segment Report indicates:

  • 2 out of 5 small employers (3 – 199 employees) are in level-funded plans
  • Just a year ago it was 1 out of 8 employers…
  • stop loss insurance loss ratios jumped to 85% in 2021 driven by new and very expensive specialty drugs and a lot more million dollar claims.

Just in the last year, 5 specialty drugs, each costing more than a million dollars annually per patient – have come to market.

What does this mean for you?

Smaller employers be very, very careful of self-insuring… 



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