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Dr. J. Paul Leigh

Professor of Econometrics, Ph.D., University of California, Davis

Dr Paul Leigh

Dr. Leigh has made a name for himself in California and across the nation with his research into the costs of workplace injuries and illnesses.

Resume: Dr. Leigh has been a professor of Public Health Sciences at UC Davis since 1998. Prior to that he was an associate professor of economics at San Jose State University, and from 1986 to 2005 a senior health economist at Stanford University Medical Center. Prior to that he was an associate professor at the University of Kentucky College of Medicine.

Schools:  He received his Ph.D. from the University of Wisconsin and his undergraduate degree from the University of Oregon. He specialized in econometrics, health and labor economics.

Awards: He was the winner of the 2007 John Howard NIOSH Director’s Award for Outstanding Research.

Certifications/Designations:  Dr. Leigh has written one book on safety-related issues, “Causes of Death in the Workplace,” in 1995, and co-authored a second book, “Costs of Occupational Injuries and Illness,” in 2000. He has also written or co-written numerous articles on the economics of safety.

Q&A

 

What are the top issues in California occupational safety and health today?

I think that the payments to injured workers are too low. There is a study I worked on five years ago that shows payments in mid-decade dropped on workers’ compensation benefits by about half. This was a result of Gov. Schwarzenegger’s initiative in 2004, SB899. I think it was inappropriate and those funds should be restored. Compared to other states, California pays a relatively low amount.

In the early 2000s, workers’ compensation premiums rose quite a bit and much of the public unfortunately attributed that to workers lying or cheating or malingering while receiving workers’ compensation. That is not true.

The recorded injuries, fatal and non-fatal actually, have been dropping for the past 20 years. Yet on average until 2006, premiums have been going up. So it is not the number of injuries or even the severity of injuries that have been driving up these premiums. It is something else.

We published a study in Public Health Reports in September 2011 demonstrating that the financial returns for insurance carriers play a big role in premium increases. The workers’ compensation insurance carriers invest in the stock market. And when the stock market drops, they forecast future losses, so stock price fluctuations, bond price fluctuations, as well as interest rates on bonds, are very important contributors to profits and losses of workers’ compensation insurance companies.

The stock prices and interest rates on bonds are very important predictors of what is happening to workers’ compensation premiums. They are much more important predictors than the number of injured workers and the types of injuries that occur. I don’t think the public understands that. I wish the public would stop blaming injured workers for these increases in premiums.

While one factor is the poor corporate investments, another factor is medical price inflation. The medical prices for care have been soaring and insurance companies directly pass this on in their premiums. Medical payments go to doctors and hospitals and nurses and all the rest. That does not go directly to the worker. So again, it is not the injured worker that is benefiting in a monetary sense, it is the doctors and the hospitals.

 

Injury and illness rates continue to decrease, with some exceptions. What's the next great leap forward in occupational safety and health?

That is a nationwide problem. It could be that workplaces are safer on average, but I think the BLS [Bureau of Labor Statistics] statistics overstate the improvements. For example, if you look at the Census of Occupational Fatal Injuries, which is a data set that a lot of people respect, including myself. It records the number of fatal injuries in the workplace.

They have rigorous methods for guaranteeing somebody was injured on the job or died on the job. If you look at it from its start in 1992, you’ll see a relative decrease in death rates over time. That’s wonderful. The decrease is a modest decrease over the years.

The BLS also keeps records on nonfatal injuries and these rates have been going down at two or three times the rate for fatal injuries. I don’t think nonfatal injuries have been dropping that fast. They may have been dropping nationwide over a period of 20 years, but I don’t think they have been dropping that fast. I think the Census of Fatal Occupational Injuries is a better indicator of what’s actually going on in workplaces. It will show you that workplaces are probably getting safer, but not nearly the rate as the other survey on nonfatal injury suggests.

One issue…is that it is very difficult for anyone to hide a death. The family is not going to hide it. The employer is unlikely to hide it. It is much easier to hide a nonfatal injury. This can happen through a variety of mechanisms. One is the employee himself or herself may not report it for a variety of reasons. I think a big factor now is that the term “workers’ compensation” has negative connotations in society -- didn’t used to be that way. In our society, the term “workers’ compensation” has negative connotations, so a lot of people don’t want to be stigmatized. Workers will take a couple days off, maybe see the doctor using the employer insurance plan, which does not have the stigma. Or maybe just suck it up and not report it and hope things get better. So perhaps the most important factor is workers themselves are not reporting injuries.

They may also worry about getting fired, especially in the past ten years. So people want to hold on to their jobs and don’t want to rankle their employer for any reason. Of course, as everyone knows, it is illegal to fire anyone who is injured on the job. But over time an employer might remember that a worker was injured, so when it comes time for layoffs, that may be a factor in who is laid off. It can be a very subtle effect later.

Also employees may think a workers’ compensation claim on their record may hurt their chances to get another job.

Some firms want government contracts. When the government issues a contract, it may be aware of the injury rate of the firm. And all things being equal, the government may not award a contract to a company that has a high injury rate. So the employer has an incentive not to report the claims. And they are a headache. They are a burdensome paperwork headache for the employer.

The reason for the decline in injury rates, in the past 20 years, may be linked to increased outsourcing. Smaller firms come into construction and transportation and other industries, farm work. The outsourcing goes to smaller firms that do not have as many resources to document injuries on the job. They, in general, don’t report as many injuries. And they may not be aware of all the laws and they may not want to be bothered with the paperwork.

 

One group -- Hispanics/Latinos -- suffers a disproportionate number of injuries and illnesses. Why? How should California address this problem?

Far more serious than discrimination or disparities based on race or ethnicity is the disparity based on educational background. This applies if you have someone who is a high school dropout or who has achieved less in high school, or someone who is high school-educated but who doesn’t have any college.

We’ve had recent research that those are the best predictors of who is more likely to make a workers’ compensation claim and is more likely to be injured.

So these individuals have considerable vulnerability for keeping a job, finding a new job, in the economy we’ve had in the past 20 years. They are more likely to be injured. They are also more likely to report injuries, and more likely to underreport injury on the job.

Now it happens, of course, that Hispanics are less likely than whites to graduate from high school. So if you don’t factor for education, it appears that Hispanics are disproportionately affected. I think they are, but I think the raw data exaggerates that disparity. The same is true for African-Americans.

What’s far more dangerous and far more troubling is the discrimination or disparity that exists by educational status and not by race and ethnicity. So there are plenty of whites that have lower levels of education that experience injuries.

 

Some observers say injury and illness rates are higher than they appear because employers find ways to hide injuries, or not record them. Do you agree this is a serious problem and if so, how should it be addressed?

Yes, I agree it is a serious problem, but I’m not sure how to address it. Issue fines. Have more inspections. Of course, it is not just the employers’ fault. Have greater attention by Cal/OSHA inspectors to recordkeeping.

 

What kind of training is the most crucial for employers to provide?

Employers ought to pay attention to types of injuries that occur in their line of business. They should rank those types of injuries and explain how to avoid those types of injuries down the list. Not just have a blanket approach for all injuries.

Different employers in different industries are going to have different rankings for types of injuries. The employer needs to find out what are the basic types of injuries in their industry and approach them one by one. The Bureau of Labor Statistics has beautiful data on the injuries that occur by industry. So if I were an employer, that’s what I’d look at start figuring out…which ones to deal with first. Rather than try to address all at once. I guess that would help with the small employer. I guess the small employer doesn’t have the experience the large employer has.

 

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