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The Real Cost of Workplace Safety

Posted February 20, 2013 by Victor Daily to Financial Advice 0 0
This post was written by a EasyFinance.com Community member. The views expressed below may not reflect the views of EasyFinance.com.

It is estimated that one worker is killed from a workplace-related injury or illness around the world every 15 seconds - that’s 6,300 every single day. On top of that, around 337 million are injured in workplace accidents, costing the global economy a staggering $1.25 trillion each year.

Let’s break it down into three of the largest global economies.


Every day, one person is killed in the workplace in Australia, with the highest rates of accidents occurring in the construction, agriculture and transport industries.

The latest government figures showed that workplace injuries cost the Australian economy around $60 billion each year - or 4.8 per cent of the GDP. This figure takes into account workers compensation premiums as well as lost productivity and earnings.

Alarmingly, a Safe Work Australia report revealed that the majority of the costs are coming out of the employees pockets - not their employers. While an average workplace injury costs $100,000, only 5 per cent of that is paid for by the employer; 74 per cent is covered by the employee and 21 per cent by the community.

When an employee is injured at work, the employer may face large penalties and fines as well as temporary or permanent employee replacement.


Overall, the cost of workplace injuries and illnesses has been going up in the USA. Figures from the U.S. Bureau of Labor Statistics revealed that the annual price tag of workplace injuries sits at around $250 billion. To put this into perspective, that is $31 billion more than the cost of all cancers and $76 billion more than diabetes.

It is estimated that there are 4.6 injuries per 100 full-time workers, with each injury costing an average of $38,000. To break it down even further, in 2007 an average of $688,000 was spent on medical costs for each of the 8,200 cases of permanent, disabling workplace injuries; $5.7 million was spent on 6 million injured workers who didn’t even miss any time at work; and the cost of lost earnings and fringe benefits totalled $139 billion.

Of all workplace injuries and illnesses, less than 25 per cent of the costs were covered by workers’ compensation. The rest was paid for by the employees themselves.

Medical costs in the United States are notoriously high, with the cost of a broken arm being around $80,000. It is easy to see how workplace injury costs can quickly escalate and why medical insurance is so important.

United Kingdom

In contrast to the USA, the United Kingdom has seen a decline in the amount spent on workplace injuries and illness over the past four years. The latest figures estimated that combined they cost the economy around £13.4 billion ($20.8 billion) each year, a decrease of £3 billion since 2007.

Of the total cost, £8.2 billion went towards workplace illnesses, while injuries totalled £5.2 billion. Over half of the cost was borne on the individual who sustained the injury or illness, while the remainder was shared between the employer and government.

More than 60 per cent of the £13.4 billion spent each year goes towards the employees ‘pain, grief and suffering’, with the rest covering financial costs such as loss of earnings and medical fees.


About Victor Daily: Victor is a consultant and blogger who works with many workplace injury lawyers from Brisbane. He writes on various topics includinf worplace safety, compensations and insurance. 

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