Workplace Injuries Are Adding To Income Inequality: Labor Department

03/04/2015 01:15 pm ET | Updated Mar 04, 2015
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WASHINGTON -- There are no shortage of culprits in the national debate over rising income inequality, but President Barack Obama's Labor Department would like to add one more to the list: on-the-job injuries.

In a new report issued Wednesday, Labor Department officials argue that workplace injuries and illnesses, coupled with an inadequate worker compensation system, are contributing to the gap between rich and poor in the U.S.

According to the Labor Department, roughly 4 million serious injuries and illnesses are reported by employers each year, though the true tally is likely much higher. Workers who suffer a serious injury earn an estimated 15 percent less, or $31,000 on average, over the ensuing decade.

"These injuries force thousands of working families out of the middle class and block many low-wage workers from getting ahead," David Michaels, head of the Occupational Safety and Health Administration, told The Huffington Post. "The studies all show that the majority of workers who get hurt never get any workers compensation, and they have to pick up the cost themselves. The workers who do [get workers comp] are never fully compensated."

According to the report, "Adding Inequality to Injury: The Costs of Failing to Protect Workers on the Job," state laws and court rulings have made it harder for injured workers to recoup money, with workers compensation now covering only an estimated 21 percent of lost wages and medical bills due to injury or illness. The rest of the tab falls onto workers, their health insurers and taxpayers in general.

While "inadequate for the average worker," the system tends to be even less generous toward low-wage workers, according to the report. Immigrant workers, in particular, may be unaware of their rights, have a limited grasp of English or simply be afraid to report their injuries for fear of losing their jobs. As a result, many don't even file claims.

According to the Labor Department, less than 40 percent of workers who are eligible to apply for workers compensation following an injury actually apply for it.

Structural changes in the labor force have made workers more likely to get hurt on the job, Michaels said. He pointed to the prevalence of temp workers in warehousing and manufacturing, as well as "independent contractors" in the construction industry.

Temp workers have typically been on the job a shorter period of time and undergone less training, making them more vulnerable to injury than permanent workers. And when workers are misclassified as self-employed independent contractors, companies dodge the liabilities that would typically come with an injury, giving them less motivation to ensure a safe workplace.

"When the worker is misclassified, they'll never see workers compensation and they won't get unemployment insurance. They really pay a very significant cost," Michaels said. "And if an employer isn't concerned [with liabilities], they have very little incentive to prevent those injuries."

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