Owners of small businesses are optimistic about the economic outlook for 2005 despite continued concerns about California's worker's compensation system, according to an article recently published in the Los Angeles Daily News. (link unavailable)

Keitaro Matsuda, an economist with Union Bank is quoted as saying: "Maybe it will take more time. After all, the final changes to California's workers' compensation system began taking effect as of Jan. 1 of this year," he said. "And insurers probably need to verify lasting reductions in costs of workers' compensation policies before they start cutting rates."

According to the California Applicant's Attorney Association (archived), insurer profits for the fourth quarter and 2004 are up 25-36% over 2003. Is that enough verification?