Workplace injuries may exacerbate wealth divide as states cut compensation

On-the-job injuries and illnesses worsen income inequality because “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,” according to a report issued Wednesday by the U.S. Labor Department’s Occupational Safety and Health Administration (OSHA).

Citing a 2005 study on workers’ compensation benefits, OSHA said in its assessment that injured workers tend to incur significant income losses over the decade following their injuries, even when workers’ compensation is taken into consideration. 

An investigative piece from ProPublica and NPR, also released on Wednesday, found that 33 states have cut workers' compensation since 2003 by either tightening eligibility or reducing benefits. According to their report, “Florida has cut benefits to its most severely disabled workers by 65 percent since 1993."

Although the OSHA report "Adding Inequality to Injury" urges states to institute more generous compensation packages for sick and injured workers, it puts even more emphasis on preemptive action.

“The most effective solution to the problem posed by this paper is, of course, to prevent workplace injuries and illnesses from occurring in the first place,” according to the report. “This is what is required by the law, and it would spare workers and their families from needless hardship and suffering."

The study also suggests that employers’ growing reliance on independent contractors instead of wage-earning employees increases the risk of workplace injury, because using contractors allows companies to skirt OSHA regulations. Additionally, “these employers avoid paying workers’ compensation insurance premiums,” the report says.

OSHA, the main federal entity in charge of inspecting workplaces and preventing on-the-job injury or disease, has long been plagued by funding and staffing issues. In April 2011, the Guardian estimated that federal OSHA inspectors have the capacity to inspect the average workplace just once every 175 years.

Between 2013 and 2014, the agency’s budget declined slightly, from $564.8 million to $552.2 million, before ticking up again marginally to $552.8 for fiscal year 2015. For the 2016 budget, the Obama administration is requesting $592.1 million from Congress, an increase of 7 percent, some of which would go to hiring 90 additional staff members.

The latest OSHA report appears to serve partially as an argument for a well-funded workplace agency. Other pressure groups have joined the call as well: Last year, the labor federation AFL-CIO issued a report arguing that OSHA had suffered from “neglect and inaction” during the eight years of the Bush administration, harming on-the-job safety in the process.