Federal Regulators Link Workers' Comp Failures To Income Inequality

By Howard Berkes

Published March 5, 2015 at 3:03 AM CST

A few hours after ProPublica and NPR issued the first in a series of reports about workers' compensation "reforms" sweeping the country, the Occupational Safety and Health Administration coincidentally released a paper linking workplace injuries to income inequality.

The OSHA paper and ProPublica/NPR stories come to similar conclusions about how some injured workers have been affected by a decade of changes in workers' compensation laws, including cutbacks in benefits and more difficulty in getting benefits.

But OSHA goes on to say that many injured workers and their families find themselves in "a trap which leaves them less able to save for the future or to make the investments in skills and education that provide the opportunity for advancement."

Among the paper's other major points:

On average, injured workers earn $31,000 or 15 percent less in the 10 years following a workplace injury

Employers pay only 21 percent of the costs of workplace injuries through workers' compensation. Families end up bearing 50 percent of the costs and taxpayers pay 16 percent when workers resort to food stamps or Social Security Disability.

With employers not bearing the full costs, which OSHA characterizes as a subsidy, the incentive to provide a safe workplace is undermined.

Fewer than 40 percent of eligible injured workers apply for workers' compensation benefits.

In California, 1/3 of workers with reported amputations at work did not receive workers' compensation benefits. In Massachusetts, that statistic rises to 50 percent.

"These injuries and illnesses contribute to the pressing issue of income inequality," said OSHA administrator David Michaels. "They force working families out of the middle class and into poverty, and keep the families of lower-wage workers from entering the middle class."