Guess Who Usually Ends Up Paying for Workplace Injuries?
If you’ve suffered an injury at work, you know how much of a nightmare the aftermath can be — not just because of the pain and suffering, but because of the paperwork. Not only is filling all of that out a chore, but oftentimes waiting to hear back from human resources representatives, lawyers, insurance companies, and others can drag the process of getting to a doctor and on the road to recovery out for weeks, even months.
As it turns out, that whole process may be an elaborate act of strategic inefficiency. Why, you ask? Well, in an effort to save on costs, of course.
According to an exhaustive new article from investigative journalism outfit ProPublica, the dismantling and shifting of the workers’ compensation system has been in the works for many years. The piece, titled The Demolition of Workers Compensation, was done in conjunction with a reporter from NPR, and found that cuts to worker aid programs have become so severe that many people end up completely bankrupted by workplace mishaps, and that the government has been complicit in helping big business remove safety nets.
“Over the past decade, state after state has been dismantling America’s workers’ comp system with disastrous consequences for many of the hundreds of thousands of people who suffer serious injuries at work each year,” the article says. “Employers are paying the lowest rates for workers’ comp insurance since the 1970s. And in 2013, insurers had their most profitable year in over a decade, bringing in a hefty 18% return.”
ProPublica reports that 33 states have passed laws reducing workers’ compensation benefits, sometimes by as much as 65%. Expiration dates on coverage, and in some states, limits on where injured workers can seek treatment have been put in place by employers. There are many similar statistics, but at the center of the shrubbery maze ProPublica and NPR come to a single conclusion: Businesses have transferred the burden of paying for workplace injuries to the taxpayer.
The rolling-back of worker’s compensation for injuries on the job, again, has been in the works for a while. Essentially, it’s been a tag-team approach from business and government to get the job done, and in the end it’s the little guy — or injured worker — who ends up getting the short end of the stick.
Where businesses formerly used to kick in some funding to take care of injured employees, the public is now picking up the tab. When benefits and workers’ compensation eventually does run out for injured workers (those who actually end up receiving it, anyway), they end up on public assistance, in the form of food stamps and other types of welfare. That frees businesses from footing the bill.
So, how much does that bill actually end up being? A reporter for NPR’s Planet Money team did another report a couple of years ago to find out. Her work showed that the country’s two largest disability programs end up costing taxpayers roughly $260 billion per year.
While the argument can be made that businesses are simply doing this because it is in their best interest to do so, it’s simply one more example of the private sector offloading its private costs onto the public at large. This has become something of an economic theme over the past several years — to socialize the costs, but privatize the profits — and we’ve seen it happen in other areas of the economy as well, not just with injury compensation.
For example, the financial crisis that kick-started the Great Recession was caused by individuals in financial institutions assuming extraordinary amounts of risk — risk they may not have taken had that money not been guaranteed by government insurance. We see it in other forms as well, one of the most talked-about and blatant being the abuse of welfare and public assistance programs perpetrated by companies like Wal-Mart, which employ huge numbers of people, many of whom don’t make enough in wages to cover basic living expenses, and are thus thrust into welfare programs.
The Social Security Administration’s own numbers confirm the explosion of disabled workers over the past few decades, with a dramatic 160% nominal increase since 1990. While some of that is due to other causes, a large number is also due to practices like that that ProPublica has uncovered. While it’s unlikely to be fixed in the short-term, the destruction of worker’s compensation is but one of a number of mounting costs that the taxpayer must now pick up the tab for.