Poor Workers’ Compensation and injuries add to income inequality

Most residents of Tuscola County, Michigan, work extremely hard at their jobs. They know that the income they receive is very important to them and their families. But, if they are injured on the job, many of these workers believe that they will receive the necessary monetary benefits from Workers’ Compensation that will cover their lost wages. However, a new report issued by the U.S. Department of Labor reveals that workplace injuries, as well as an antiquated workers’ compensation system, is not helping workers, but they are in fact contributing to an overall income gap.

According to the report, employers report nearly four million workplace injuries every year, but the number is considered to be much higher. And many of these injured workers earn over $30,000 less over the 10 years following their injury. Adding insult to this data is the statistic that a large percentage of injured workers never receive any workers’ compensation benefits, and those who do are rarely reimbursed fully.

The report goes on to indicate that different state laws and decision handed down by courts throughout the nation make it harder for workers to recover from their financial losses. It also states that the benefits received account for just over 20 percent of a worker’s lost wages. Insurance companies, taxpayers and the injured workers themselves must make up the difference.

Recent labor department figures indicate that only about 40 percent of workers who can apply for workers’ compensation benefits after they are injured actually submit a claim. Making matters worse is that changes in the workforce have actually made it more likely that an employee could be injured on the job. This change includes the increased amount of temporary type workers and contractors in different industries such as manufacturing and warehousing.

Source: Huffington Post, “Workplace injuries are adding to income inequality,” April 27, 2015