Occupational injuries and illnesses in low-wage workers cost the US $39 billion in 2010

Celeste wrote earlier this year about a study by health J. Paul Leigh of University of California Davis (published in the Milbank Quarterly) that calculated the economic of work-related injuries and illnesses in the US: $250 billion in 2007 alone. Celeste and I requested that he return to the data behind that estimate and calculate the medical and productivity costs of injuries to the low-wage US workforce. With funding from the Public Welfare Foundation, he produced the white paper Numbers and Costs of Occupational Injury and Illness in Low-Wage Occupations, estimating that injuries and illnesses to workers in low-wage occupations cost the US economy $39 billion in 2010. We're releasing that white paper today, along with a policy brief (also funded by PWF) that Celeste and I wrote to summarize the findings and contextualize them for policymakers: Mom's off Work 'Cause She Got Hurt: The Economic Impact of Workplace Injuries and Illnesses in the U.S.'s Growing Low-Wage Workforce.

We can't put a price tag on the emotional toll of these injuries and illnesses. The estimated 596 work-related injury deaths in 2010 among low-wage workers have left hundreds of families grieving. Leigh calculates that a total of 1.7 million workers were injured or made ill (both fatally and non-fatally) in 2010; that adds up to an incalculable amount of pain and struggle.

It is possible, though, to calculate the economic impact of these injuries, and that's what Leigh has done. He identified 65 low-wage occupations for which the median wage is at or below $11.18 per hour; earning that much for 40 hours a week, 50 weeks a year will yield $22,350 per year, the 2010 federal poverty level for a family of four. These occupations include retail salespeople, cashiers, food-service workers, janitors and cleaners, personal care aids, and childcare workers (among others), and the approximately 31 million workers in these jobs account for 22% of the US workforce. Leigh calculated both the medical costs and the productivity costs -- lost wages and benefits, plus "home production" tasks like cooking and childcare that workers can't perform while ill or injured -- that result from work-related injuries and illnesses among this group:

  • Non-fatal injuries: 1,625,152 cases, with $10.1 billion in medical costs and $18.2 billion in productivity costs
  • Non-fatal illnesses: 87,857 cases, with $546.4 million in medical costs and $985.6 million in productivity costs
  • Fatal diseases: 12,415 cases, with $4.5 billion in medical costs and $4.2 billion in productivity costs
  • Fatal injuries: 596 cases, with $36.9 million in medical costs and $404.6 million in productivity costs

This all adds up to $39 billion ($15 billion medical costs, $24 billion in productivity costs), which Leigh notes is comparable to the $37 billion annual cost of stroke. And the loss of $24 billion in productivity is especially damaging to low-wage workers. Only one-fifth of low-wage workers have paid sick days, so a dishwasher or cashier taking a couple of days off work to recover from an on-the-job illness or injury will likely get a smaller paycheck than usual. When you're earning only $8.83 an hour (the median wage for a dishwasher), you tend to need every cent of your paycheck to cover expenses, so two days off work can make it hard to pay rent or buy groceries. So, injuries to low-wage workers can quickly translate to reduced spending with workers' local businesses. And if injured workers find it hard to buy groceries or pay utility bills, that can affect their children's development and education. Leigh's analysis doesn't involve these kinds of long-range social impacts, but they're something policymakers should bear in mind.

In some cases, workers' compensation insurers will replace the wages workers lose when recovering from occupational injuries and illnesses -- but all too often, this doesn't happen. Not all employers are required to have workers' compensation coverage, and insurers aren't required to pay wage-replacement benefits until workers have missed three to seven consecutive shifts (laws vary from state to state). Some employers discourage workers from reporting their injuries and illnesses as work-related, which leaves those workers without access to the workers' comp benefits they'd otherwise be entitled to.

Leigh estimates that workers' compensation insurers end up covering only about one-fourth of the costs of occupational injuries and illnesses; the rest is borne by non-workers-compensation health insurers, taxpayer-funded programs like Medicaid, and, of course, the workers' families. In the case of low-wage workers, their families are the least able to absorb these kinds of costs.

It's in society's best interest to reduce occupational injuries and illnesses. We write a great deal on this blog about improving workplace health and safety, and Leigh's research demonstrates that we can save billions of dollars by doing so. It's also important to strengthen the safety net -- including food stamps, Medicaid, and other assistance programs -- so that the injuries and illnesses that do occur don't cause spell financial crisis for workers and their families.

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