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Safety: The Unmarked Path to Productivity

Originally published: 02.01.18 by Danfoss

According to conventional wisdom, safety costs money. Risk is the natural order of things, and to escape it we add protective items we believe will keep us safe from harm. We can install guards, shields, and railings, but they all cost money. When the National Transportation Safety Board “reverse engineered” all the add-ons prompted by Federal Motor Vehicle Safety Standards, they reported the results in added weight and cost — and much of the cost is transferred to consumers through higher prices, taxes, and insurance fees. When a leading consumer products magazine recently called for new safety technologies to be made standard on all vehicles, the article was entitled “Car Safety at Any Cost.” Safety measures cost.

The other half of the equation is almost axiomatic: cost affects the economy. We want miners to remain safe on the job because we care about miners, the argument would go; however, ensuring their safety adds to the cost of coal, and as the cost of coal rises, the competitiveness of coal decreases and makes the user less competitive. Safe miners mean coal-fueled electricity costs more — even though safe coal does not create more electricity than unsafe coal.

When economic growth levels are

historically low, a question arises about safety. Do we really need all these regulations? Can we afford all the safety measures we have imposed on ourselves? Should we instead be paying more attention to cutting unnecessary costs and improving our productivity?

The daily news underscores the point. A recent Wall Street Journal headline reads “Productivity Slump Threatens Economy’s Long-Term Growth,” while a New York Times article reminds that “Silicon Valley Has Not Saved Us From a Productivity Slowdown.” And writing in the IPWatchdog, Neal Solomon alerts readers that over “the past decade, economic growth, wage growth, business investment and productivity growth have declined” while “economists have discovered that productivity growth alone explains the dramatic development of industrial economies.”

Productivity is the key to growth, so why should it not dominate decision-making?

Solomon adds an important fact, however: “the causes of productivity growth are unclear, with capital, labor and technological contributions.” So what about safety?

When Food Safety News used USDA data to assess the economic cost of foodborne illness, they looked at 15 pathogens that cause 95 percent of illnesses and death from foodborne causes where a pathogen is specified. Evidently, such illnesses send more than 50,000 people to the hospital each year, and the annual cost to the economy is “more than $15.6 billion, or about half of the $32 billion the World Health Organization says the Ebola outbreak will cost the world economy.”

If you think safety is expensive, try risk. A 2013 New York Times article reported that asthma is “the most common chronic disease that affects Americans of all ages,” and the Centers for Disease Control and Prevention “puts the annual cost of asthma in the United States at more than $56 billion.” A leading factor in the increasing rates of asthma is widely thought to be indoor air quality.

Similarly, the Economic Policy Institute notes that the “total number of occupational illness and injury deaths in 2007 (59,102) was greater than the number of deaths from causes such as motor vehicle crashes (43,945), breast cancer (40,970), prostate cancer (29,093), and homicide (18,361).” The cost of workplace injuries and illnesses: $250 billion annually.

When all the facts are in, safety is productivity — not cost — and innovation can be a key driver.

Refrigeration, innovations in food processing, better food traceability, and the like all drive down foodborne illness rates — and, with them, the monetary cost of foodborne illness. Some financial gains are obvious, while others are harder to specify, such as how much is saved by people not needing hospitalization — both in direct and indirect ones, since hospitalization is now a leading factor in infection.

Similarly, recent innovations in buildings have enabled the tighter sealing of building envelopes. One effect was the ability to keep out a range of outdoor pollutants, from particulates to pollen. Another was the ability to trap and even cultivate indoor pollutants. It took a revolution in ventilation to fix the problem, but today buildings can be designed to keep bad air out and good air in.

FOX Business cites an estimate from the Integrated Benefits Institute that “U.S. companies lose more than half a trillion dollars a year in lost productivity that can be traced to health.” Safety is not the only factor, but the numbers are staggering. So it is not surprising when companies like Logan Aluminum in Russellville, Kentucky, declare to the world “6 Million Man Hours Without a Lost Time Injury.”

From the very beginning of modern technology and industry, the aim of vastly improved productivity was integrated with the aim of controlling risk. The two were co-dependent. Today’s productivity crisis may have the experts stumped. But it is possible that part of the solution may lie not in a faster pace, more automation, or training and retraining, however important those things may be. The evidence suggests that performance depends — perhaps first — on safety or the elimination of certain kinds of accidents. From the beginning, and still today, safety is productivity.

About Danfoss

Danfoss North America's global sales and service organization in North America makes it possible to deliver world-class support on a local level. We are a valued partner for each and every customer, providing them with components and system solutions to boost productivity, efficiency, energy savings, and profitability. For additional information, visit danfoss.us.

Articles by Danfoss

Safety: The Unmarked Path to Productivity

When economic growth levels are historically low, a question arises about safety. Do we really need all these regulations? Can we afford all the safety measures we have imposed on ourselves?
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