Monday, August 23, 2010

What's behind the headlines about 'Fewer Worker Fatalities'?

There have been a lot of headlines lately about the lower number of injuries. One headline read “ U.S. Worker Fatalities fall 17% to record low” [Bloomberg August 19, 2010 ]. The improvement over past years is certainly welcomed but in the U.S. that still means 4340 work-related fatalities. The headline also misses the fact that construction spending in the US fell by 15% over the same period.

As an aside, it is important to remember that the U.S. counts work-related fatalities is very differently from the way WorkSafeBC and many other reporting agencies report similar statistics. The U.S. Bureau of Labor Statistics (BLS) has a system called the Census of Fatal Occupational Injuries (CFOI). Certain work-related fatalities are excluded from CFOI. For example, occupational diseases are excluded. Deaths due to work-related heart attack or stroke are considered occupational diseases and are excluded. Fatal work injuries to workers under 16 are also not included in this database. In contrast, all these categories of work-related fatalities are included in the WorkSafeBC index.

Another difference between the U.S. data and what we typically see in Canada is the number of homicides and suicides that occur at work. These are included in CFOI. Last year, homicides in the CFOI numbered 521 [80% due to shootings] while suicides accounted for 237 of the fatalities in this dataset.

Returning to the impact of the recession on workers’ compensation, it is true that injuries have declined both in absolute numbers and in rate. The decline in numbers is to be expected: if no one works, there can be no work-related injuries. The decline in injury rate is more complex and is part of a trend that has been going on for some time in most countries, states and provinces. NCCI in the U.S. notes that claim frequency continued to decrease in 2009: down 4 percent (cf. reductions of 3.4 percent in 2008 and 3 percent in 2007). According to NCCI’s research, recession was predicted to put additional downward pressure on frequency, because the work force still working during the recession gains in experience and is less prone to injury.

Many articles have noted the increase in ‘severity’ during the recession. Unlike WorkSafeBC that has a special definition for ‘Severe Injuries’ most jurisdictions simply use duration of disability as a measure of severity. The idea that a recession would extend recovery makes intuitive sense. In a robust economy, most workers return to their accident employment well before reaching maximal medical recovery. In a recession, there may be fewer employers clamoring for injured workers to return and workers are more likely to remain on claim until they are nearer to or reach a full recovery (or a point of maximal medical improvement), which is their entitlement under most workers’ compensation systems.

As we come out of this recession, most analysts are predicting a modest recovery rather than a rapid expansion. Given that scenario, one can expect that severity/duration will decline slowly and the number of injuries will increase. We can anticipate upward pressure on the provincial injury rate partly due to recoveries in higher risk sectors and partly due to the ‘churn’ as businesses deal with modest expansion (new hires) and an acceleration in the retirement rate due to the underlying demographic impact as older workers grow in numbers and are replaced as they retire.

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