Transmitting the Costs of Unsafe Work

57 Pages Posted: 9 Apr 2016

See all articles by Charlotte Alexander

Charlotte Alexander

Georgia State University - Risk Management & Insurance Department; Georgia State University College of Law

Date Written: April 5, 2016

Abstract

This article investigates the ways in which employers are made to "feel" the costs generated by workers' occupational illnesses and injuries. In economic terms, many of those costs are externalized, i.e. experienced by parties other than the employer, whose safety decisions are therefore distorted. The law and the labor market set up a variety of mechanisms that may transmit costs back to the employer: workers' compensation claims, government complaints, union activity, workers' demands for safety improvements or compensatory wages, and worker quits. Yet each of these requires that workers have sufficient knowledge, power, and resources to act as cost transmitters. Using worker survey data, this article explores cost transmission at the bottom of the labor market. Finding flaws in the operation of all cost transmission mechanisms, the article proposes a hybrid system that would give a greater role to government enforcement and consumer and investor pressure, as well as unions, filling in where workers are particularly unwilling or unable to transmit costs effectively themselves.

Keywords: workers, employment, workforce, occupational safety, occupational illness, injury, occupational injury, labor law, employment law

JEL Classification: J28, K31, K32

Suggested Citation

Alexander, Charlotte, Transmitting the Costs of Unsafe Work (April 5, 2016). Available at SSRN: https://ssrn.com/abstract=2759020 or http://dx.doi.org/10.2139/ssrn.2759020

Charlotte Alexander (Contact Author)

Georgia State University - Risk Management & Insurance Department ( email )

35 Broad Street
Room 1142
Atlanta, GA 30303
United States

Georgia State University College of Law ( email )

P.O. Box 4037
Atlanta, GA 30302-4037
United States

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