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Cost of injuries, illness to low-wage workers: $39 billion

December 14, 2012
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agricultureWith more and more Americans finding themselves in low wage work due to the effects of the recession, two public health experts have produced a policy brief that examines the financial impact of work-related injuries and illnesses to that segment of the workforce.

Liz Borkowski and Celeste Monforton, DrPH, MPH, who write frequently on the Pump Handle blog, note that low wage workers account for between one-fifth and one-third of the U.S. workforce, and new job growth from 2010 - 2011 has occurred primarily in industries with median wages below $15 per hour.

“Workplace injuries are common in low-wage occupations,” they write in the brief. “Workers employed in restaurants, as hotel housekeepers, as office cleaners, and in other low-wage jobs receive burns, break bones, lose fingers or toes, are overcome by chemical fumes, and even die in the course of employment. The injuries affect workers and their families’ finances as well as their physical and mental health, and low-wage workers and their families are especially vulnerable to financial crises.”

The families of low wage workers tend to live paycheck to paycheck, with few “rainy day” savings. They are also consumers, supporting their local economies by shopping at grocery stores retailers, and service establishments.

“With consumer spending comprising 70 percent of the U.S. gross domestic product, spending by low-wage workers helps to power our economy,” Borkowski and Monforton observe.  

“An on-the-job injury or illness can quickly disrupt this paycheck-to-paycheck balancing act, and have an immediate effect on a family’s spending with local retailers. A serious injury at work, like a third-degree burn, amputation, or broken bone, can come with a physician’s order to take a few days off of work. But a few missed shifts mean a much smaller paycheck.”

Only 19% of low wage workers have jobs that provide them with paid sick leave.

And the ultimate, aggregate cost to the U.S. economy? The brief cites a 2012 white paper in which health economist J. Paul Leigh of University of California Davis, calculated that figure – which includes healthcare services, lost earnings and home production -- at more than $39 billion. (That figure does not include occupational disease deaths which develop years after exposure.)

The brief says that employees are often “unpleasantly surprised” to learn how limited workers’ compensation benefits are. Under most states’ laws, the wage replacement benefit doesn’t go into effect unless a worker needs to miss at least three to seven consecutive work shifts. Furthermore, some states – like Texas – don’t require employers to carry workers’ compensation insurance.

On a national scale, several million farm workers and domestic workers are excluded altogether from workers’ compensation.

Click here to read the brief, 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.

Borkowski is a Research Associate and Monforton a Professorial Lecturer in the Department of Environmental & Occupational Health at the George Washington University School of Public Health & Health Services.

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