New NCCI report examines: Why Wage Inflation Matters in Workers Compensation


WHATAs 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.

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?


  • 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

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.

HOW TO ACCESS THE REPORTAccess the complete report on

FOR MORE INFORMATIONTo learn more, or schedule an interview with one of our experts, please contact Cristine Pike, Director, Public Relations and Communications, NCCI.

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