MSU LIBRARIES n RETURNING MATERIALS: Place in book drop to remove this checkout from your record. FINES wi11 be charged if book is returned after the date stamped below. "7¢“'T“éfv~g 300 A2k9 , . E‘ ' .4?» ._ «=4 . ., IQ? I," J}. ha? ABSTRACT ACCIDENT PREVENTION AND GOVERNMENTAL CONTROL IN THE CONSTRUCTION INDUSTRY IN MICHIGAN AND OHIO by Paul E. Sands Are injury rates in the construction industry lower in Ohio where there is safety legislation than in Michigan, and if so, why? This is a study that has taken place in two states that have been at opposite extremes regarding the amount of government involvement in accident prevention. Ohio has safety legislation, numerous regulations, and a separate code which applies specifically to the construction industry. The government has complete control of all work— men's compensation underwriting and allows no competition from private insurance firms in this area. On the other hand, Michigan has only recently enacted construction safety legislation. However, the law had not been passed when the data gathering phase of this research was in progress, and there are still no regulations in force up to the present time. Forty-two of the fifty states have had laws in effect that deal with occupational accident prevention. In addition, the published injury rates in Ohio are among the lowest in the nation. A natural conclusion from facts of this type could easily be that Michigan also should have had a safety code for the construction industry. However, no Paul E. Sands one has known for certain what the number of disabling in— juries per million man-hours worked in Michigan actually has been. ,Therefore, this study has attempted to find the an- swers to the following questions: 1. What are the frequency rates of construction firms in Ohio and in Michigan? 2. What does workmen's compensation casualty in— surance cost contractors in the two states? 3. .How much assistance is being received by build- ers from the government and from other sources, and what is the amount of influence being exerted toward accident pre- vention? 4. How much interest in and understanding of safety is there by management in the two states? To what degree are accepted safety practices followed and hazardous condi— tions removed? 5. What are the feelings of the construction indus— try in Ohio toward safety legislation; have Ohio contractors felt harassed because of it; and have these regulations in- terfered with productive operations? The study procedure began with the selection of a random sample of fifty contractors in Ohio and Michigan. In order to save on expenses and travel time, they were not chosen from throughout each state. Instead, five companies in each of the five largest cities of the two states were interviewed. These firms were picked from the lists of con— tractors in the various telephone books with the use of a Paul E. Sands table of random numbers. The appropriate attitudes, opin- ions, and experiences were obtained, and injury and cost data was also collected from company records. In addition, permission was received, in the form of a signed statement, which enabled the investigator to gather statistics on these contractors from insurance companies, government agencies, trade organizations, actuaries, and other sources. The out- line of the thesis follows the order of the previously posed questions with a chapter having been devoted to each one of the five points. The major findings of the study include: 1. The validity of published injury rates that are determined with the aid of "voluntary" reports of the number of injuries and hours worked is highly doubtful. 2. Contrary to natural expectation, the workmen‘s compensation costs in Ohio are definitely higher than those in Michigan. 3. The total amount of positive influence and as- sistance being received from all sources is approximately the same in Ohio and in Michigan. 4. Michigan contractors have a greater interest in and understanding of safety, and they do more to prevent in- juries. 5. Ohio reSpondents are overwhelmingly in favor of legislation, believe that it is effective, and have not ex— perienced harassment or interference with output. ACCIDENT PREVENTION AND GOVERNMENTAL CONTROL IN THE CONSTRUCTION INDUSTRY IN MICHIGAN AND OHIO By Paul E. Sands A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Management 1964 ACKNOWLEDGEMENTS I wish to thank all of the many people who co- operated and assisted in this research project. They in- clude contractors, insurance company personnel, government employees, actuaries, officials of the Associated General Contractors of America, and especially James L. Young, the former head of the Ohio Workmen's Compensation Bureau. This gracious gentleman was extremely c00perative and made all of the pertinent Ohio records and statistics available. My sincere appreciation goes to the members of my committee-—Professor Rollin H. Simonds, chairman; Professor Claude McMillan; and Professor Gardiner M. Jones--for their guidance and assistance. I am eSpecially indebted to Pro— fessor Simonds for instilling in me a keen awareness of the true worth of occupational accident prevention. He has not only shown that safety is "good business," as well as being humanitarian, but that this subject need not be approached merely from the standpoint of "slogans.” It can and should be dealt with on the basis of scientific and systematic investigation. ii TABLE OF CONTENTS Chapter Page I. INTRODUCTION . . . . . . . . . . . . . . . . 1 Questions and Hypotheses Reasoning for above Hypotheses Purpose and Value of Study Method of Study Limitations of the Study II. INJURY RATES . . . . . . . . . . . . . . . . 43 Frequency Rates--Phase I Frequency Rates-~Phase II Ohio Frequency Rates Hours Worked Statistical Evidence Understanding and Use of Injury Rates III. INSURANCE COSTS . . . . . . . . . . . . . . 82 Company Size and Insurance Costs The Experience Modification and Insurance Costs Cost Motivation IV. ASSISTANCE . . . . . . . . . . . . . . . . . 120 Safety Inspections Safety Training Outside Influences Evaluation of Sources of Assistance Safety Organizations Other Contractors Unions and Employers Trade Associations Underwriters V. INTEREST AND ACTIVITIES . . . . . . . . . . 154 ‘ iii Chapter V. Continued Safety Practices Interest and Understanding Hazardous Conditions VI. LEGISLATION Construction Safety Codes Harassment In5pectors Government Control VII. SUMMARY AND CONCLUSIONS Recommendations BIBLIOGRAPHY iv Page 194 222 244 Table 2-1. 3-2. LIST OF TABLES Frequency Rates of Construction Firms in Ohio and Michigan, for the Combined Years of 1961-1962 . . . . Proportion of Reported Nonindemnity Lost— Time Cases to Indemnity Cases of Firms in Michigan and Ohio, 1960-1962 . . . Workmen's Compensation Insurance Costs per $100 of Payroll from 50 Construction Firms in Ohio and Michigan, for the Combined Years of 1961-1962 Workmen's Compensation Insurance Costs per $100 of Payroll from 50 Construction Firms in Ohio and Michigan, for the Years 1960-1962, Inclusive Payroll in Thousands from 50 Construction Firms in Ohio and Michigan, for the Combined Years of 1961-1962 Comparison of Insurance Costs per $100 and Payroll in Thousands from 50 Construction Firms in Ohio and Michigan, for the Combined Years of 1961-1962 Comparison of Payroll in Thousands and the Experience Modification from 50 Construction Firms in Ohio and Michigan, for the Combined Years of 1961-1962 Experience Modifications from 50 Construction Firms in Ohio and Michigan, for the Combined Years of 1961-1962 Comparison of Experience Modifications and Insurance Costs per $100 from 50 Construction Firms in Ohio and Michigan, for the Combined Years of 1961-1962 Page 65 68 90 91 97 99 101 103 105 Table 4-1. 5-2. 5—8. Average Number of Safety Inspections per Year in 50 Construction Firms in Ohio and Michigan Comparison of Payroll in Thousands and Number of InSpections per Year for 50 Construction Firms in Michigan and Ohio Amounts and Types of Assistance in Safety in 50 Construction Firms in Ohio and Michigan Number of General Safety Practices Undertaken by 50 Construction Firms in Ohio and Michigan Number of General Safety Practices Employed per Firm in 50 Construction Companies in Ohio and Michigan Number of Activities Indicating Interest in Safety Undertaken by 50 Construction Firms in Ohio and Michigan Number of Activities Indicating Interest in Safety Employed per Firm in 50 Construction Companies in Ohio and Michigan Number of Firms Undertaking Activities Designed to Control and Guard Against Hazards in 50 Construction Companies in Ohio and Michigan Number of Activities Designed to Control and Guard Against Hazards per Firm Undertaken by 50 Construction Companies in Ohio and Michigan Total Number of Safety Activities Undertaken by 50 Construction Companies in Ohio and Michigan Comparison of Size of Payroll in Thousands and Total Number of Safety Activities Undertaken in 50 Construction Firms in Ohio and Michigan vi Page 122 127 149 156 159 165 166 186 187 189 192 Table Page 6—1. Answers to Questions Concerning the Effectiveness, Interference, and Feelings for and Against Safety Laws in 50 Firms in Ohio and Michigan . . . . 201 6-2. Answers to Questions Concerning Future Fears and Past Experience with Harassment from Various Sources by 50 Firms in Ohio and Michigan . . . . . . 208 vii CHAPTER I INTRODUCTION This research project has been an attempt to compare the injury records of construction firms in two states that have differed widely in the amount of government involvement in safety activities. In addition, the factors influencing accident prevention performance in these companies have also been analyzed. Questions and Hypotheses The main question is: Are injury rates in the con- struction industry lower in Ohio where there is comprehen- sive safety legislation than in Michigan, and, if so, why? More Specifically, the study endeavors to answer the follow- ing: 1. What are the frequency rates of construction firms in Ohio and in Michigan? 2. What does workmenks compensation casualty in- surance cost contractors in the two states? 3. How much assistance in being received by build- ers from the government and from other sources, and what is the amount of influence being exerted toward accident pre- vention. 4- How much interest in and understanding of safety is there by management in the two states? To what degree are accepted safety practices followed and hazardous condi- tions removed? 5. What are the feelings of the construction indus- try in Ohio toward safety legislation; have Ohio contractors felt harassed because of it; and have these regulations in- terfered with productive operations? In order to give some indication of what the writer believed to be most probably true when the investigation was begun, the previous questions are listed below in the form of hypotheses. Furthermore, the reasoning behind these views is also presented. 1. Injury rates are lower in Ohio than they are in Michigan. 2. The cost to contractors of workmen‘s compensa— tion insurance per hundred dollars of payroll is much less in Ohio. 3. Ohio contractors are being helped and influenced in safety by the government to a greater extent than their counterparts are in Michigan from all sources combined. 4. There is greater interest in and understanding of safety in Ohio, and the firms there employ more and bet-' ter safety practices and take greater precautions to remove or control hazardous conditions. 5. Contractors in Ohio do not feel strongly against safety legislation. They have not been harassed to any sig- nificant extent because of it, and productive Operations have not been interfered with. Reasoning For Above Hypotheses The primary reason for thinking that Ohio firms have fewer injuries and that they also do a great deal more in accident prevention is that the published injury rates for that state are very low. The statistics made public by the Ohio Division of Safety and Hygiene compare most favorably with the accident figures gathered by the National Safety Council and the Bureau of Labor Statistics.1 Even though there are no statewide rates compiled for the whole construc- tion industry in Michigan, the Ohio rates are as low or low— er than any figures published by any group or organization in the country. In addition, the number of firms making up the size of the sample from which accident experience is obtained is very large in the Buckeye state as compared to other groups.2 Therefore, since injuries can only be pre- vented by a conscious effort, it can be concluded that Ohio contractors must be lowering the amount of accidents by fol— lowing certain generally accepted practices in safety. 1Ohio, Industrial Commission, Division of Safety and" Hygiene, Ohio Industrial Safety Record, No. 8 (Columbus, 1959), pp. 16-20. 21bid. Fewer injuries and accident prevention are necessarily cor— related. In Michigan not only are the statistics for deter- mining frequency and severity incomplete, there is also no comprehensive information available on what contractors are doing to decrease the number of occupational disabilities. If there are fewer injuries per million man hours worked, then less expense should be incurred in Ohio for the settlement of claims. Firms would then be burdened with relatively smaller workmen's compensation premiums per hun-K dred dollars of payroll. In addition, Ohio has an exclusive state fund for this type of coverage and private insurance companies are not allowed to compete in the area. The econ- omies of scale in administration and the absence of profits, taxes, and selling expense results in only 5 per cent of in- come being retained for overhead costs.2 On the other hand, the overhead for all of the private workmen‘s compensation underwriters in the country averaged 42.4 per cent in 1961 and 43.5 per cent in 1962.3 1The frequency rate is the number of disabling in- juries per million man—hours worked, and the severity rate is the number of days lost per million man-hours of exposure including charges for permanent disabilities and death. 2Interview with James L. Young, Administrator, Ohio Bureau of Workmen's Compensation, May 14, 1963. 3The Spectator - 1963 Casualty Insurance Index (Philadelphia: Chilton Companyj, p. 3. Furthermore, it is logical to conclude that if Ohio contractors take greater precautions in accident prevention, then they have comparatively more interest in and understand- ing of safety. They have also probably been influenced and assisted to a greater extent than their counterparts in Michigan. If Ohio rates are actually lower, it can only be because relatively more is being done to promote safe work habits and to guard against hazardous conditions by all con- cerned. Finally, in order for a state safety program to be effective, the cooperation of management must be forthcoming. It is highly doubtful if this would occur in an atmosphere where harassment was prevalent and contractors had negative attitudes toward safety legislation and regulations. There— fore, the following chapters will each attempt to answer one ‘of the queries previously posed in the order that they have been listed. Chapter 11 deals with injury rates; Chapter III, with costs; Chapter IV describes the assistance re- ceived and influence exerted; and Chapter V compares manage- ment's interest and safety activities in the two states. Finally, Chapter VI answers the questions concerning the x feelings of contractors toward safety legislation, and pos- sible harassment. Purpose and Value of the Study A research project attempting to find the answers to these questions should be of value for a number of rea- sons. The most important, as previously indicated, is to know whether or not there is a significant difference in the injury rates between these two states because Ohio and Mich- igan have been at opposite extremes insofar as the amount of government influence on and control of safety activities is concerned. To summarize the situation in Ohio: there is comprehensive safety legislation covering most of the phases of business activity, with a separate code for the construc— tion industry.1 These laws include provisions for enforce— ment along with a system of penalties. There are adequate personnel and funds to conduct the program, Since a portion of the workmen's compensation premiums paid by the employer is automatically set aside for this purpose. Of consider- able importance is the fact that these regulations can be revised at periodic intervals, which allows for flexibility under changing conditions and technology. Finally, Ohio has the exclusive state fund for workmen's compensation in— surance. This means that the government has a monopoly as 1Ohio, The Industrial Commission of Ohio and the Department of Industrial Relations, Specific Safety Require— ments Relating to Building and Construction Work, Bulletin No. 202,3anuary 2, 1953. private insurance companies are not allowed to sell this type of policy. In addition to state officials being direct— ly involved in selling premiums and managing the fund, they also gain an enormous amount of control by having the acci— dent records of all of the companies in the state. Further- more, all ofuthe information and statistics that may pos— sibly be required for various reports, charts, tables, and publications are available in one location. There are sev- eral other places that have exclusive insurance funds, but these states are relatively small in population and industry. Therefore, because of the combination of these factors, Ohio is in a class by itself and is the state where government control and influence in the general area of industrial injuries is most prevalent. Since this study was begun, there has been a major change in Michigan. Construction safety legislation, which had been voted down by the legislature every year for the past eight years, was finally passed. This occurred only after all of the interviews in this project had been con- ducted and information gathered.1 The balance of this chap- ter will examine the situation as it existed during the period of this study and any changes arising from the new safety legislation will be analyzed later in the report. lMichigan, Public Act No. 89 (1963). As a matter of fact, up to this time there is still some doubt as to what pattern of implementation the law will take. No definite course of action has been decided upon, and no Specific regulations have been put into effect. In contrast to Ohio, Michigan's previous safety legislation was passed in 1909. Although there had been many minor revisions and additions, the law as a whole was somewhat obsolete.1 It really applied to a different indus- trial age. The construction industry had no Specialized safety code in force, and Michigan was the only large and important state where this situation existed. Forty-two of the fifty states had laws of this type. There were no real- ly effective enforcement provisions and penalties to Speak of in Michigan, as they were scattered throughout the act and were unclear. Employers had to allow government in- Spectors to enter their places of business, but accepting and acting upon their advice, directives, or recommendations was another matter altogether. One reason for this was the small amount of money that had been provided for enforcement and administration of the law. Not only had the funds that had been voted yearly by the legislature been relatively meager, they had also been uncertain and subject to change. The Workmen's Compensation Bureau had only a small percentage 1Michigan, Public Act No. 285 (1909). of the personnel that is to be found in this department in Ohio, and the Michigan Department of Labor was greatly understaffed for the supervisory work it was required to do. The law stipulated that the latter group be reSponsible for an annual inSpection of all manufacturing establishments, factories, hotels, workshops, and stores, with the result that twenty-eight men had to inSpect over 110,000 places of business each year.1 Thus, it is obvious that because of confusing enforcement provisions and inadequate financial backing Michigan had a relatively weak law. The Department of Labor could do nothing about interpreting or changing these regulations in order to keep them up to date. Finally, the fact that approximately eighty private companies sell workmen‘s compensation insurance in Michigan means that many statistics of various kinds are not readily available, and there is much information which it would be extremely diffi— cult or impossible to obtain. Therefore, this study compares rates in firms from two important industrialized states located next to one another, which fall at either end of a scale insofar as gov- ernment involvement in and control of occupational injuries has been concerned. Does this control influence the rate of injuries? Has Michigan been relatively handicapped because 1Michigan, Department of Labor, Annual Report (1960), pp. 10-11. 10 of its lack of a construction safety code? This study will endeavor to answer questions of this nature, and will also attempt to determine what other factors play an important role in accident prevention. Of course, it would be a relatively simple matter to compare these two States if the accident statistics were readily available. However, no one knows for certain what the frequency and severity rates in construction in Michigan are as this data is not collected or published. It is also doubtful if most of the individual construction companies know what their own rates are or even if they know how to determine them. Before any progress can take place, if it is needed, there must be a realization that a problem exists, and one of the prime prerequisites to improvement in safety is to know where one stands initially. There are many indications that the number of in- juries in construction are too high, but the over-all pic- ture in Michigan is still somewhat cloudy. For example, in one of the latest publications of the Department of Labor, construction firms employed 4 per cent of the workers in the state, but had 19 per cent of the deaths that occurred on the job.-1 The number of compensable injuries is also out of proportion to the labor force employed in this industry. On the national scene, construction ranks close to the top in 11bid., p. 17. 11 occupational injuries in the figures published by the United States Department of Labor and the National Safety Council.1 However, what is more disturbing is the fact that these rates have been increasing recently, and instead of there being more research and statistics collected by these two organizations, there is less. The general lack of informa- tion is one reason why the construction industry is being investigated in this study. In addition, the nature of the industry is such that there are many factors mitigating against low injury rates. It seems to have everything against it! The five most influential conditions which con- tribute to a good or a poor safety record, in order of their importance, are as follows: 1. A safety program 2. The amount of mechanization and automation 3. The size of the company 4. The ability to enforce and control operations 5. The amount of hazard involved. In other words, a good safety program, a high degree of mechanization, a large company, the operations taking place under one roof, and the absence of serious hazards will 1Accident FactS-—l961 (Chicago: National Safety Council), pp. 26-27. 2From a lecture by Michigan State University Profes- sor Rollin H. Simonds in Course G. B. 403: Safety Management (1956). 12 naturally result in low frequency and severity rates, and the opposite of these things leads to a high number of in- juries. The difficulties of the construction industry be- come clearly apparent when the average firm is compared to one in another industry, which has exceedingly low rates. For example, AC Spark Plug, a division of General Motors located in Flint, has a frequency rate of less than one dis- ablinginjury per million man hours worked (on the average). This is primarily because it has a good safety program and a qualified safety director in charge of it. Many operations are done without manual labor and there is a continuing trend toward automation and greater amounts of capital, Sci— ence, technology, and engineering. The size of the company is very large so that it can readily afford these things plus a great number of various types of staff Specialists. The operations are in one place and do not change too often so that it is easy for line personnel to enforce safety and to control what is going on. Even though there may orig— inally have been hazards, they have been guarded against in a number of ways so that any danger has been removed. The average contractor has all of these things going against him. He is relatively too small to afford employing a safety specialist, and the president has to be well versed, in a great number of skills. Even if he is interested in safety, there are a great many other problems clamoring for his attention. There is much manual handling of material 13 and hand labor, such as the hammering of nails, etc., which cannot be done by machinery, plus the fact that construction has progressed very slowly in technology and mechanization. What is perhaps the greatest problem is that hazards come and go as the job progresses and they cannot be permanently guarded against. The weather often confounds any precau- tions taken, and finally a firm may have jobs scattered all over a large area and this work continually changes, which makes it exceedingly difficult for management to be certain of and to control safety activities. Various studies have also Shown that semiskilled and unskilled laborers have the highest number of injuries of all types of employees, and construction has many of these. They also seem to Show a false sense of bravado in far too many cases, and there is a relatively high turnover in this category of personnel. The question too often becomes, “Why educate a man in safety at over $3.00 per hour when he will not be working for me much longer anyway?" In a government publication that discusses why small firms have high accident rates, many reasons other than those already mentioned are given. They also apply to the construction industry.1 The average contractor has only a 1Bureau of Labor Standards, Safety Subjects, Bul- letin No. 67 (Washington, D.C.: United States Department of Labor, revised 1956), p. 11. 14 relatively small number of employees; a company that main- tains a work force of over 100 men full—time is one of the really large firms of this business. These ”large” firms make up only a small percentage of contractors, but compared to other industries, 100 workers in a company is usually con- sidered to be small in Size. A brief summary of why rates are high for small firms follows. While some of these things have been mentioned in another context, they all are found to be problems for the large majority of contractors who fit into this category. 1. They cannot employ full-time safety personnel. 2. The small executive carries a complex load and has no technical staff. 3. He does not join safety organizations or attend safety conferences. 4. There is no detailed cost accounting, so the costs of accidents are not discovered. 5. As there are few employees, only a small number of injuries cause very high rates. These rates are not known or calculated; therefore, there are not enough injuries so that the problem can be clearly seen. 6. These companies cannot afford expenditures withe out immediate returns, so they tend to do less in preventing and guarding against hazards. 15 7. .There are so many small businesses that it is hard to reach them all and to Sell them the ”gospel of safety.” It should be obvious that contractors can use all of the help that they can get in accident prevention. Even though a safety law has been passed in Michigan, there are bound to be controversies on how it should be administered and enforced. It is becoming increasingly important that there be greater understanding in this general area, and it would undoubtedly be worthwhile for all concerned to have some objective facts available. Everyone is agreed that accident rates should be reduced, but what is the best way to do this? Does there have to be strict government control; and all things considered, has Michigan pursued the wisest course in the past? It Should be valuable to check on and get some indi- cation of the accuracy of Ohio's published injury rates. These figures are very low and compare favorably with those listed by the National Safety Council whose members comprise the most safety-conscious firms in the nation. In addition, they are much lower than the rates published by the Bureau of Labor Statistics; however, it seems that this government department questions their validity. At the present time, there are approximately ten states cooperating with the 0 federal government in taking samples of injury frequency and l6 severity rates from various industries according to the American Standards Association 216.1 method.1 Ohio claims to use this standard, but there are arguments back and forth with the result that Ohio's statistics are not used by the United States Department of Labor. It is possible that there are honest differences or misunderstandings in the interpretations of the standard method of figuring rates, but this seems hardly likely. Some lost-time cases may not be included in Ohio's calculations. On the other hand, they might have been doing exceedingly well in their accident pre- vention program even though it is difficult for some people to believe. One interesting fact in this controversy is that the number of firms in the sample backing national fig- ures for both the Bureau of Labor Statistics and the Nation- al Safety Council combined, is less than the number of par- ticipating companies in Ohio.2 If rates were as low as is claimed in Ohio, and they were used by the Bureau of Labor Statistics in determining country-wide averages, it would tend to reduce this department's published figures. There- fore, it would seem that this bureau would be interested in using Ohio's statistics if they could. When questioned, 1American Standard Method of Recording and Measuring Work Injury Experience, 216.1-1954 (New York: American Standards Association). 2Ohio Industrial Safety Record, pp. 20-22. 17 Ohio officials give the impression that it is not that they cannot cooperate, but that they do not choose to do so. They imply that they are really doing an effective job and that they do not want to have their efforts diluted by getting involved with individuals who do not believe in the type of government controlled program that they are admin- istering. One factor that probably contributes to the dif- ficulty is that Ohio does not figure injury rates for indi- vidual firms. All of the hours worked and lost-time cases in an industry are lumped together into one formula. To complicate the problem even further, the Associated General COntractors of America receives voluntary injury reports from its members all over the country and figures the fre- quency and severity rates for these firms and also for the chapters of each state. This trade association claims that the rate for Michigan is lower than most states and much lower than in Ohio. It should be worthwhile to determine which claims seem to be valid and the reasons for these doubts and discrepancies. A further analysis of the frequency and severity statistics from a sample of companies in Michigan and Ohio could possibly result in the answers to the following very interesting types of questions: What is the amount of varia— tion in the injury rates among these firms? Is the disper- sion much greater in one state than the other or do there seem to be two clusters at different levels depending upon 18 the presence or absence of safety legislation? The reason that these and related questions are important is because of the Special nature of the construction industry. There are many contractors and companies employed on each job and they come and go at different times. If only one subcontractor were safety-minded he would be severely handicapped by work- ing with other people who are not, and he would also be un- able to remove all of the hazardous conditions that his employees would be exposed to with his own relatively lim— ited resources. The American Standards Association, in the introduction to its Safety Code for Building Construction, states that it is difficult for a single contractor to do other than follow common practices in accident prevention.1 They also mention the fact that other extremely hazardous industries have solved the problem of numerous injuries, while the construction industry has failed to do so. In the former case, an individual employer could act effectively by instituting a good safety program, but a single contractor is handicapped in this respect. Therefore, it would seem that the only solution is for concerted action on the part of everyone in the industry. Can this be done without the government taking an active part? IS it really much more difficult for a firm in one state to have a very low 1American Standard Safety Code for Building Construc- tion (New York: American Standards Association, 1944), p. 9. 19 frequency rate than it is in the other, or can a company which is determined to have very few injuries accomplish this endeavor on a practical and business—like basis regard- less of its location? Up to this point, the major emphasis has been placed on the desirability of knowing, defining, and comparing in- jury rates. However, if these percentages are lower in Ohio and the differences seem to be Significant, then it is also important to investigate HEX this is so. Many people might quickly jump to the conclusion that this dissimilarity is due to the presence of safety legislation, and that the solution to Michigan's problem was found when the law was passed. Nevertheless, it should be kept in mind that it is not the regulations themselves that reduce the number of in- juries, but the accident prevention activities of management. It is conceivable that safety legislation could actually in— crease the frequency and severity of disabilities if employ— ers were to become antagonistic and not cooperate. The same type of thing was true with prohibition in the 1920's. Man— agement could well follow the "letter” of the law when it is really the "Spirit" and interest in accident prevention that is important and effective. In an industry like construc— tion where specific hazardous conditions continually change, are extremely complex, and also vary insofar as responsibil- ity for them is concerned, safety codes cannot possible cov— er all contingencies. A law is not something definite and 20 apart that can be separated from the particular environment that it has to work in. Thus, this whole area must be ex- plored more deeply. Even if a difference in rates between the two states is not found, it is still necessary to know and to under- stand the factors that influence management toward accident prevention practices. Certainly legislation could be one of these, but there may be additional ones as well, which may have a much greater influence. For example, a firm might be motivated because of Special cost incentives and savings; management could receive extra services and assist— ance in doing the job; there may be more education and com- munications so that the resulting knowledge and understand— ing would lead to a greater interest in solving the problem. Why do these things vary in different situations? Are small companies being neglected in one state and not in the other? It is important to remember that conditions may be greatly improved by means other than the passage of a law, and this research will endeavor to discover what these things are and how well they seem to work. Apart from any differences in safety practices caused by various types of governmental influence, the activ- ities of state-wide trade associations, insurance companies,_ and unions could easily be decisive factors in bringing about a favorable climate for the prevention of injuries. In addition, it may not be the laws and the fear of penalties 21 as such which reduce frequency and Severity rates, but rather the added communication that they engender. PeOple are likely to talk about safety to a greater extent, and the discussion of restrictions or dissatisfactions, etc. may incidentally lead to increased information and greater awareness of what is involved in the necessity for safe Operations. In this same vein, legislation might not hurt a contractor as much as it might help him in persuading em- ployees to work safely because of the added prestige and government sanctions which back him up when he issues var- ious safety directives. Therefore, while the importance of knowing and under- standing these influences is of value to persons connected with the administration of safety legislation, there is another area that cannot be neglected. This has to do with the attitudes, opinions, and feelings of the contractors themselves, and their reactions to inspections, enforcement, and penalties. Have they been unduly harassed? Have regu— lations interfered with production operations? Do any fears that they may have seem justified? Do there Seem to be major differences in these attitudes on a statewide basis? It could easily be that the fear of the unknown is playing a major part and that Michigan employers, who have had relae tively few or no restrictions, think that they would be more severely handicapped than Ohio managers actually are. On the other hand, the background and historical development 22 could easily be the significant factor, and what works in one place would not necessarily be effective in another. Knowing what these people think should be done, what they will go along with, and what they object to, will certainly give strong indications of just what can be Successfully attempted, given the particular Situation in this state. The procedure of going directly to individual con- tractors in order to ask them what they want, could have surprising results. For example, the recent experience of the meat packing industry in Michigan comes to mind. Bills had been continuously brought before the legislature con— cerned with humane methods of slaughtering livestock. How- ever, it was believed that these pr0posals would be unduly harassing to the companies involved. When a check was made of the actual practices in effect, it was found that in the overwhelming majority of cases these methods were already being employed and that management had no objection to them. Needless to say, the law was then passed. In order to understand and to evaluate properly the responses given by the interviewees, it is advisable to know what they are actually doing insofar as accident prevention practices and procedures are concerned. Are they following the existing legal provisions (eSpecially in Ohio)? Are those who are doing least to limit the number of injuries lMichigan, Public Act No. 163 (1962). 23 the ones with the most negative attitudes? Does legislation seem to make a difference in the actual practices that com- panies employ to remove hazards? A further benefit in the study of these activities would come from an analysis of the differences in practices between individual firms and between the firms in each state and their correlation with frequency and Severity rates. Which procedures are the most important and effective in re— ducing injuries? Do low rates depend upon luck or rather the understanding, interest, and knowledge of certain employ- ers? The answers to these questions are pretty well known, but not by a great number of contractors--at least these peo- ple do not seem to be convinced. Too often, they hear the voice of some "authority" on the subject saying what should or should not be done, or there may be a glowing report of the results of a safety program in one company, which does not necessarily prove anything and might conceivably be in- terpreted as so much propaganda. However, the same results coming from the research on a large number of firms should carry that much more weight, and so help to educate and to motivate construction management towards safety. In conclusion, it may be stated that a study of this type should be beneficial on three levels: national, state, and local. At the national level the Bureau of Labor Statis— tics would have a check on the accuracy and reliability of Ohio's published injury rates; they would then know whether 24 or not these statistics could properly be used in estimating nation-wide averages. Furthermore, the federal government should have a better understanding of the effectiveness of certain measures and Systems for the prevention of injuries, and also learn of the variation in safety procedures and activities on an individual firm and a state-wide basis. There would likewise be additional information at hand on the accident experience of firms in an important industry, for construction injury rates are no longer being collected and published by the Bureau of Labor Statistics. These fig- ures would also indicate how the average concern is perform- ing, because they would not be distorted by voluntary returns that are predominantly from the largest and most safety-con— scious companies, which is the case under the present method of gathering disabling injury statistics. In this research project, businesses that do not belong to the National Safety Council and that do not have safety programs, will have their v preportionate chance of being represented in the sample. Therefore, the average construction firm's accident rates should be considerably higher and look much more serious than most people believe them to be, and this may hopefully result in more action being taken to solve the problem. Certainly everyone appreciates the fact that the large and progressive firms are doing a fine job. Their experience is not typical, however, nor the reason for the present con— cern over the relatively large number of accidents and the 25 agitation for government regulation. The states should more clearly understand the part that can best be played by them, and also recognize the things that they can effectively do to prevent injuries with a minimum of confusion and complaint. Thus, officials may be able to answer the question of whether or not state gov- ernments should be concerned with actively entering into the area of safety and accident prevention and to what extent. Should various services and types of assistance be provided, or legislation passed--what kind--how strictly enforced--and how administered so as to get them accepted by management and labor? On the local level, individual firms would have additional information on the Specific things that they can do to lower frequency and severity rates. It is to be hoped that increased incentive will ensue as they come to realize and appreciate the extent of the problem that they have in this area. There should also be indications of what the future is likely to bring, for if Michigan contractors do not want severe restrictions, they had better do something about reversing the present trend of rising disabilities. At the very least, an objective study of this type should help to dispel some of the existing confusion and indicate where bias and partiality exist. 26 Method of Study The study procedure began with the selection of a random sample of fifty contractors in Ohio and Michigan. In order to save on expenses and travel time, they were not chosen from throughout each state. Instead, five companies in each of the five largest cities of the two states were interviewed. These firms were picked from the lists of con- tractors in the various telephone books with the use of a table of random numbers. One of the very difficult problems here was the determination of just who or what falls under the classification of contractor. Perhaps for this reason, there are no complete published lists of them available. For example, a carpenter who has his son working for him would be called a contractor if he was self-employed and took on small residential jobs. In addition, there are all types of relatively minor categories such as acoustical, garbage removal, ventilating, air conditioning, porch enclo- sure contractors, etc., to name a few. In fact, it is not unheard of for there to be as many as forty-four different subcontractors on a single, large, commercial or industrial project. Therefore, a number of conditions had to apply for those who were to be selected. Only industrial and commer- cial contractors in building construction that employed an average of at least twenty men were included in the study. At one point it was planned to interview some of the impor- tant types of subcontractors, but as the sample size was to 27 be so small, it was felt that this practice would dilute and confuse the results. For that reason only general contract- ors were chosen. In addition, the line was drawn at approx— imately twenty employees because firms that are much smaller than this tend not to have adequate office facilities and clerical help, with the result that records are not complete or very well kept. The interview method of gathering information was used instead of a mailed questionnaire. This necessitated the relatively small size of the sample, and was done be- cause of the difficulties with injury statistics. Most con— tractors are not too familiar with frequency and severity rates so that these figures could not have been gathered in any other way than by going directly to the company and look- ing at the various records, accident reports, etc. There was some doubt at the beginning of the research as to just what figures and information would be available in the two different states, and what difficulties would be encountered. Some of the plans had to be altered as the project progressed; however, they pertained only to the gathering of injury sta- tistics and will be explained fully in the next chapter. The contractors themselves were very gracious and cooperative and seemed to be interested in the study. Not only did interviews facilitate the gathering of injury statistics, they also helped to insure returns from a more representative sample of employers. Contractors who 28 are not particularly safety-minded, would probably not answer a mailed questionnaire in the proportion that they exist in the industry. It is only human for someone who is doing poorly in any particular area not to advertise the fact and to be generally uninterested in the subject. This seems to be a major drawback in the present method of gather- ing rates, as all returns are of a voluntary nature and tend to make state-wide frequency and severity statistics look much better than they actually are. If it is true that the firms with the poorest accident experience do not keep the proper records and do not know their injury rates, then they cannot voluntarily supply this information on their own. The interview itself was a highly structured one, and every contractor was asked the same things. The only exceptions to this were on a state-wide basis, as the pres- ence or absence of safety legislation necessitated a slight- ly different form to some of the questions on the attitudes and practices of these firms. However, any observations or additional remarks that were made were also recorded, and the reSpondent was allowed to air his views at length. There are seven major sections to the interview schedule and a copy begins on the next page. The first section, or cover, contains all of the identifying information and also has a code number which is used for tabulating purposes. The firms were promised that the names of the companies would n6t‘be mentioned in the report and so they are not. 29 CODE NUMBER '0 INTERVIEW SCHEDULE I. IDENTIFYING INFORMATION: Name of Company Address City & State Telephone number Name of interviewee His title Type of contractor Type of work done Office facilities Average no. employees Special characteristics Desires a copy of abstract Yes No Degree of cooperation Date 3O NO. II. SAFETY PRACTICES: 1. What do you do in the way of safety? Ygg Ng__ Comments a.) safety program ____ ____ b.) safety organization ____ ____ g; c.) written safety policies .___ ___ d.) safety rules ____ .___ e.) enforcement ____ ____ f.) safety training ____ ‘___ g.) safety meetings ____ ____ h.) safety inspections ____ .___ i.) medical provisions ____ ____ j.) bulletin boards .___ '___ k.) other 2. Have your safety practices and activities changed in the last several years? Yes No Why? 3. External participation and activities: Egg Ng_ How MMch? a.) national safety council ___. ____ b.) safety conf. & meetings ____ ____ c.) training programs ____ ____ d.) unions ____ ____ e.) other contractors ____ ____ f.) government ____ ____ g.) insurance company ____ ____ h.) trade associations ____ ____ A.G.C. other 1.) other (safety org's) ____ ____ 31 No. III. OUTSIDE INFLUENCES: a -) 5. O C O O O I O O O V V V V V V V V V 4. Have you ever been really and effectively helped in safety? Yes____ No___ From whom did you receive this help? Other assistance: Yg§_ Ng_ Egg? contractors .___ .___ unions ____ ____ trade associations .___ ____ insurance company ____ ____ government .___ ____ A.G.C. __ __ Other insurance co. '___ ____ actuary ____ ____ Feel you need? safety organizations ‘___ . How much cost motivation have you received? From whom? . Other kinds of motivation, i.e. extent of communication? How much do you hear about safety? . HAVE YOU EVER ASKED FOR ASSISTANCE IN SAFETY? Yes ____ No From whom? How? . Do you ever give safety instructions to sub-contractors? Yes____ No Do they comply? Any problems here? How strictly do you enforce safety? Is the average sub-contractor safety conscious? 10. How often do you see an inspector? Identify Comments 10 IV. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 32 No. HAZARDOUS CONDITIONS: WHEN YOU ARE CONSTRUCTING TEMPORARY FACILITIES SUCH AS SCAFFOLDS, WALK- WAYS, EXCAVATIONS, ETC., DO YOU FOLLOW ANY TYPE OF SPECIFICATIONS ON HOW THEY ARE TO BE BUILT IN SO FAR AS SIZE, STRENGTH, AND TYPE OF MATERIALS ARE CONCERNED? Yes No State take lead? Are you familiar with any construction safety standards? Yes No Ever refer to them on the job? Yes No What do you do in the way of removing and guarding against hazardous con- ditions? Are all of your employees required to wear hard hats when needed on the job? Yes No Extent of enforcement? Are there guard rails and toe boards around all hazardous openings and scaffolds on your jobs?' Yes No Do all of your excavations have adequate bracings? Yes No Do your workers ever ride on hoists and other like equipment on the job? Yes No Extent of enforcement? Do all of your ladders have rubber shoes, Spikes, or spurs on the bottom of them? Yes No Tied down? Are there guards on all of your power saws and other like pieces of mechanical equipment? Yes No Do you see workers operating equipment with the guards removed or not functioning prOperly? Yes No Enforcement? How well does the average contractor do in ( observing law ) taking these types of precautions? Is there a relationship to company size? How much of a part does the inspector play in this? l3 l3 l2 lo I: IO [0 I IX 33 No. V. LEGISLATION AND GOVERNMENT CONTROL: 24. DO YOU FEEL THAT SAFETY LEGISLATION IS EFFECTIVE IN CUTTING THE RATE OF ACCIDENTS? Yes___ No___ 25. ARE YOU FOR OR AGAINST SAFETY LEGISLATION? For____ Against 26. Do you feel that safety laws and regulations interfere with production and output? Yes___ No___ 27. Have you ever had to follow government safety regulations and Specifica- tions because of various contracts? Yes___' No___ 28. When was the last time you were inspected by the govt.? 29. Do you feel that the inspector was primarily enforcing rules or being of service in safety? Rules ____ Safety ______ Both 30. Did he give you any helpful advice or assistance apart from regulations? Yes _ No __ 31. Did he seem to be qualified and to have the proper knowledge and training in safety? Yes ____ No ____ 32. HAVE GOVT. SAFETY REGULATIONS EVER BEEN HARRASSING TO YOU? Yes____ No___ 33. ARE YOU AFRAID THAT THEY MIGHT BE IN THE FUTURE (IF LEG. PASSED)? 34. Fear of union harrassment if leg. passed? Yes____ No 35. Have unions used safety legislation to harrass management? Yes___| No___ 36. Future or past concern of unfairness of inSpector? Yes ____ No ___ 37. DEGREE OF ACCEPTANCE OF GOVT. INVOLVEMENT IN SAFETY: l - 2 - 3 - 4 - 5 a.) Present (or proposed) law acceptable? Yes ___. No ___ b.) What would you change? c.) Private Workmen's Compensation insurance cheaper? Yes No e.) No law - just service agency?(research & records etc.) Yes No P'h f'h .) Some pressure? Yes No If run right? Yes No .) Effectiveness of program? .) Degree of Govt. involvement - more or less & why? 34 No. * To Michigan Workmen's Compensation Rating Bureau and insurance underwriter: We are participating in a research project at Michigan State University. Therefore, please allow Paul E. Sands to look over any statistical information that you may have on this company in order that he may complete his doctoral dissertation on safety in the construction industry. signed company address * (For those firms in Ohio the statement was addressed to the Bureau of Work— men's Compensation and the Industrial Commission of Ohio.) VI. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 35 No. COMPANY STATISTICS: Do you know your frequency and severity rates? Yes___ No Do you know what these rates are? Yes____No How they are figured? Yes ___ No Do you have a record of all injuries? Yes ____ No What is your experience modification? 1959 60 61 62 What do you pay for W.C. per hundred dollars of payroll? .# 1959 60 61 62 # Insurance company or Actuary? Agent Insurance premium: 1959 60 61 62 Any discounts Payroll: Total hours worked: Reports to govt? Compensable injuries: doctor's lost-time over 7 days FREQUENCY RATES: compensable doctor's lost-time over 7 days 36 No. VII. OBSERVATIONS: (To be filled out immediately upon leaving company.) 48. Amount of safety activities: 49. Interest in and understanding of safety: 50. Help and motivation in safety: 51. Precautions against hazards: 52. Attitude on legislation and government control: 53. Accident rates: GENERAL COMMENTS: 37 Part 11 deals with the safety practices that take place with- in the company and also with the external participation and activities in safety. There had originally been a section at the beginning that was mainly concerned with breaking the ice, promoting a feeling of rapport, and finding out Some information on how the contractor felt about the over—all subject. It succeeded only too well and had to be deleted because the interviewee talked so much it was difficult to go on with the main body of questions. However, some in- sights were gained on the cause of accidents along with the major problems that contractors felt that they had in safety, and these things will be mentioned in the body of the report. The next part deals with outside influences, and asks about the various kinds of help and information that they have received, from what sources, etc. It also attempts to determine how much influence these firms have on others in safety. Part IV, on hazardous conditions, refers to safety practices that are required by the Ohio safety code, but they are w6rded in such a way that the law is not mentioned. This way they can be used in both states, in the majority of cases. Thus, it may be ascertained how much actual differ- :ence the safety code makes in certain Specific preventive practices. There is capital M or g_in the left—hand border before some of the numbers, and these indicate the questions that are asked in only one of the states. In the 38 section on legislation and government control, the contrac- tor's feelings and fears are thoroughly explored and the last part attempts to determine their degree of acceptance or rejection of government involvement in safety. These questions naturally vary because of previous reSponses and tend to be Of the Open end variety, where the interviewees can expound at will. The actual comments here were exten- sively recorded, and the contractors were also allowed to express themselves fully without any restraint. Throughout the interview it was not only necessary to record the reSponses and to keep things moving along in an orderly fashion, it was also very important to generate interest in the project. The reason for this was because these people were then asked to Sign a statement giving the interviewer permission to be allowed access to statistics on these companies from several sources. These signatures were invaluable and will be further discussed in Chapter II on rates. This proved to be an important point in the proceed- ings for if the form was not signed, the company could not be included in the sample. However, there was no real dif- ficulty here except in one instance when the contractor stated that he wanted to check with his insurance company. The agent approved and the information sought was forthcom- ing. The next step was to Obtain company records which Showed the total payroll, the net workmen's compensation insurance premium, the number Of injuries, the experience 39 modification, and the name Of the insurance company or actuary. Several firms only gave some of this confidential information reluctantly, but the fact that they had already committed themselves when Signing the statement made persuad— ing them that much easier. .Actually they were very coopera- tive as a whole, and very interested in learning the results of the research. There can be no doubt that they were happy to receive assistance with this problem. At the outset, the necessary statistics were gathered for a four year period-—l959 through 1962. .However, in firms where the injury rates had to be figured, the accident re- ports seemed tO be less available and complete as one went back in time, and it took hours to go through them all. Therefore, a two year period was decided upon, and addition- al figures were gathered if they were readily at hand. If the company did not have some of the needed information, then it was Obtained from other sources with the aid of the official's signature. In Section VI, there were also a num— ber of questions asked with the Objective Of determining the degree of familiarity and understanding of injury rates. Finally, a page was included at the end with provisions for recording a ggmber Of observations, and these impressions were written in immediately after leaving the premises. At the first opportunity and before the next interview was con- ducted, the whole schedule was gone over very carefully and 40 if there were any doubts or missing information a phone call was placed before departure from that particular city. Limitations Of the Study Although they may be mentioned in other parts Of the study, it might be advantageous at this point to briefly summarize some of the major limitations and difficulties en— countered in the research. In the first place, there were no grants connected with this endeavor and the amount of funds available was not large. This resulted in a somewhat Smaller project than was possible; however, the fact that no biased parties had any chance to influence the results or procedures taken, ended up by being a net gain. It is ex- ceedingly hard to come to conclusions that make financial backers look bad. One problem that it was impossible to solve dealt with injury statistics. While frequency rates could be determined in all cases, the severity rates.could not. .Once the time passed and the number of days lost was left unrecorded, there was no way to go back and pick up this information without serious chances of error. Never— theless, the drawbacks to this situation are not too large as severity usually fluctuates greatly from year to year due to chance factors in the seriousness Of any particular injury. Most experts agree that the frequency rate is the better indicator of accident prevention performance, because it is easier to control the over—all number of injuries 41 rather than their effects. Of course, the ideal situation is to have both rates, but severity becomes increasingly valuable only as it is looked at and compared over a large number of years and not merely one or two. As the compila- tion and collection of the numbers of injuries is dealt with in the following chapter, the difficulties with and limita- tions of these statistics will be examined there. Having to interview each respondent resulted in only a relatively few being interrogated. It must be kept in mind while reading any conclusions, that these apply tO conditions in only two states and in only one segment of a large industry. In addition, just the bigger general con- tractors in commercial or industrial building construction in the five largest cities in each state were approached. Therefore, this study cannot give answers about safety leg- islation in general, although it is a beginning. Perhaps, the greatest limitation Of all was that there were no actual inSpections of construction sites so that there could be various checks and definite proof of not only what was being done to prevent injuries, but the degree of accomplishment of various Objectives. It would be worthwhile to know the differences in understanding Of safety factors between the president of the company and the men on the job. In order for a Scientific study of the construction industry to be conclusive, it is not only necessary for injury rates to be accurately determined, but the size Of the project and the 42 type of construction must also be noted along with other like factors, and this can only be done by on-site inSpec- tions. Anyone doing this would have to be very familiar with the industry and understand all Of the safety and en- gineering aspects very well, and the researcher did not fall into this category. CHAPTER II INJURY RATES As previously mentioned, the most important part of this study was to be an attempt to determine accurately the accident experience of the firms in the sample. There was some doubt in the beginning that lost-time cases could be obtained, and it was thought that total compensable or med— ical cases would have to be used instead. However, upon further investigation it proved to be possible to figure frequency rates according to the American Standards Associa— tion 216.1 method. The problems in gathering the appropriate statistics were greatest in Michigan. While the Michigan Workmen's Compensation Rating Bureau had information on all of the construction firms in the state, there were serious limitations in their statistics. In the first place, there was a one year lag in the figures that they received from the various insurance companies, which meant that little or no information would be available for the year 1962. In addition, the number of disabling injuries of less than a week's duration were lumped together with the ”medical only” cases. They did have the total number Of claims filed, but the same type of figures were not kept in Ohio in any acces- Sible form. Therefore, the only solution was to gather the 43 44 necessary statistics from individual company records. The majority of the companies in the study were mem- bers of the Associated General Contractors and had been keep- ing a record of their disabling injuries. These were report- ed every month along with the number of days lost and man- hours worked, so that this association was able to figure the frequency and severity rates for all Of their members in Michigan. In other firms, disabling injury reports were sent in to the Bureau of Labor Statistics and the National Safety Council, while in still others the agent or insurance company had its own forms for reporting injuries with Special provi- sions for clearly recording the lost—time cases of less than a week's duration. In the remaining companies, the workmen's compensation reports were carefully scrutinized and the total number of disabling injuries were obtained from them. Al- though this took a good deal of time and careful effort, it was not impossible to do, as one of the items on the form required the company to state the number of days work lost because of the injury. By analyzing all of the pertinent information on the report, and asking questions, the total number of disabling injuries could be determined. On the other hand, there were no problems of this type in Ohio as the Bureau of Workmen's Compensation and the Division of Safety and Hygiene had all of the needed statistics and agreed to make them available. 45 Before proceeding to the findings concerning the rates Of injuries, it might be advisable to pause at this point in order to make certain that there are no misunder- standings or possible confusion. There are a number of terms which should be clearly defined so that there is no question as to exactly what is meant and what is actually being discussed. They are used frequently throughout this chapter and may be interpreted somewhat differently by var- ious people. The way that they will be used in this report is as follows: 1. The frequency rate is determined according to this formula: “°' °§J°§F§§$fsfifii§sw’érigfio"’00° = Frequency Rate 2. Lost-time cases are those injuries that cause a person to be incapacitated at least one full day other than the day on which he was hurt. 3. A disabling injury is exactly the same thing as a lost-time case. 4. An indemnity or compensable case is one in which an injured worker receives compensation because of an injury. In Michigan and Ohio this would happen if he was incapacitated for longer than one week. Therefore, an indemnity case is always a lost-time case, but a lost-time case is only a compensable 46 case if it lasts longer than seven days. They are not the same thing, but some people treat them as though they were. 5. A non—indemnity injury is commonly referred to as a medical case. All medical bills are paid but the employee does not receive any compensation checks. This is a disabling injury if the person who is hurt cannot return to work on the day after the accident occurred. The reason that these points have been emphasized is that some Of these terms have been used interchangeably and incorrectly. One of the big problems is that the under— writers are not interested in lost-time and no lost-time cases, but in indemnity and non-indemnity cases. The result is that lost-time cases of less than a week's duration are lost track of and lumped with the medical caSes because this is the only payment involved. Therefore, only lost-time cases of over seven days are "visible” and too often only the indemnity cases become reported disabling injuries. Frequency Rates--Phase I The research on frequency rates may be divided into two major phases. In the first, the statistics were gathered from the various sources and were quickly analyzed and com- pared, with very interesting results. The information 47 supplied showed that there was very little difference in the accident rates in the two states. In 1961, the Michigan firms had a combined frequency of 42.31 as compared to 41.03 in Ohio. In 1962, the situation was reversed with Michigan having a slightly lower rate. The figures were 33.71 in Michigan and 34.85 for Ohio. When the two years are aver- aged the results are 38.62 for Michigan and 37.99 for Ohio, which can certainly be called an insignificant difference. It seemed Obvious that Michigan contractors were doing as well without safety legislation. However, the most impor- tant finding was the fact that there was absolutely no rela- tionship between the published Ohio construction industry frequency rate of 16.04 for 1961 (the 1962 statistics have not been published up to this time) and the average rate Of 41.03 for the random sample.1 It should be kept in mind that these firms were among the largest and most closely in— Spected and controlled in this industry in the state, and they Should be expected to have the lowest rates. When the frequency rates for the two years are averaged for each firm, not one of them was even close to the supposed average for the industry as the lowest frequency rate was 22.16. It is also worthWhile to keep in mind that the number of lost-time 1Ohio, Industrial Commission, Division Of Safety and Hygiene, Ohio Industrial Safety Record, NO. 10 (Columbus, 1962), p. 18. 48 cases on these companies were Supplied from the same source that publishes the industry-wide rates. A more elaborate analysis of all of these figures will be presented in the section on statistical evidence. As the analysis progressed it soon became apparent that something was amiss. Preliminary tabulations showed that many frequency rates did not correspond to the impres— sions concerning safety consciousness that were received during the interviews. There were also not the simple and precise correlations between safety activities and accident rates that had been expected. Many explanations were con- sidered for this phenomenon, but as all of the items on the interview schedule had not been Obtained for all companies, this analysis was as yet merely superficial. One important fact in this regard was that any statistical information that had been voluntarily supplied to various organizations was used in the study. In other words, if the frequency rate had been previously determined for a firm, these figures were employed and the contractor‘s workmen's compensation forms and records were not requested at the time of the in- terview. The majority Of the Michigan builders belonged to the Associated General Contractors and so fell into the lat- ter category. .However, before all of this became much of a, problem, Phase II evolved and provided answers to some of the questions that had been arising. 49 Frequency RateS--Phase II After gathering all of the information from the in- terviews and making the above mentioned tabulations, there were still a few minor items yet to be cleared up. The ex- perience modifications for one contractor had to be collect— ed from the insurance company in Detroit, and several other minor items such as the net insurance premium had to be checked in cases where management had had some doubts as to the accuracy of their figures. In addition, there was a question in several instances about whether or not some com- panies ESE been members of the Associated General Contrac- tors but had discontinued their membership in this organiza- tion. Therefore, these things had to be sought out before the results of the study could be completely analyzed and written up. One person who was approached was an Official of the Associated General Contractors who had been inter- viewed when the research was in its formative stages. He had been asked for financial assistance, and agreed to pro— vide some when the proper application had been filled out. However, the money was never applied for because as the study progressed it seemed as though the findings might not be complimentary to this organization and no chance was to be taken of having the results influenced in any way. On this visit he was told how things were developing and how his organization, the State Of Michigan, and the private 50 insurance companies were doing a fine job without government control. This was sincerely believed to be the case at that time! He naturally wanted to be of any assistance and was asked for the complete statistics and monthly reports for the previous three years of all Of the members who had been included in the sample. These figures were supplied several days later, and immediately the Detroit chapter was contacted and they agreed to do the same thing. On this trip to Detroit, the Michigan Workmen's Compensation Rating Bureau was also contacted and they were pleased with the way that things were going. They were asked for and gave all Of the pertinent information that they had on the twenty-five Mich- igan firms. There were statistics for 1962 on only a few companies, but complete information for l96l-—and in most cases 1960 alSO-—was forthcoming. The eXperience modifica- tion, payroll, insurance premium and total number of claims filed including indemnity and nonindemnity cases were ob- tained, and when these things were analyzed it quickly be— came apparent that all was not as it had appeared. Up to this point, action had been taken upon informa— tion which had been accepted in good faitF. Now, inadvert- ently, these things were being checked-up on with disastrous results. When comparing the disabling injuries and indem- nity cases there was a strong tendency for them to be equal in number. In other words, only lost-time cases of a week or longer were being reported to the Associated General 51 Contractors as lost-time cases, and the evidence of this will be shown further on. There were also several instances where the numbers of indemnity cases were larger than the reported lost—time cases. (Lost-time cases are the larger category Of which indemnity cases are only a part.) It soon became quite apparent that these statistics were not being taken seriously and/or they were not being reported correct- ly. The following are instances where errors of one kind or another were made (all from the initial statistics). For example, the firm with the lowest combined frequency rate in Michigan had received Associated General Contractors' awards for no disabling injuries for the three years prior to 1961, yet they were involved in one indemnity case in 1960 accord- ing to the Michigan Workmen's Compensation Rating Bureau's figures. The next lowest firm in Michigan reported five lost-time cases to the Associated General Contractors in 1961 but had ten indemnity cases. The third contractor EEEE that he did not know his experience modification but reported one lost-time case for 1959, one for 1960, two for 1961 and none for 1962 or an average of only one a year, which was exceedingly low. His experience modification had continually increased during this period and was over 100 per cent of the basic or manual rate, casting a great deal of doubt on these figures. Number four on the list had at least two lost-time cases in 1961 but reported only one to the Associated General Contractors. The sixth lowest had a frequency rate of 304.78 52 in 1960 when he was not a member of the Associated General Contractors. In the following two years when he became a member the rates fell to below the lowest firms in Ohio. Number seven's figures seem to be accurate, but there was no safety consciousness to Speak Of in the company and sub- sequent information indicates that the next year's frequency rate was very high. However, it is not known if all of these injuries were reported to the Associated General Con— tractors. Some further instances: in one company there were three lost-time cases for 1962 in their Office records, but they reported only one to the Associated General Contractors. In another, for 1961 there were 29 disabling injuries Sent in to the Associated General Contractors, but 37 indemnity cases were on file at the Rating Bureau. One company sent in their accident experience to the National Safety Council, and this information was seen and noted at their Office. When their reports to the Associated General Contractors for 1961 were Obtained there was an interesting discrepancy. They reported a frequency and severity Of 59.50 and 781.21 reSpectively to the National Safety Council and a frequency of 67.91 and a severity Of 2,309 to the Associated General ContractorS--a difference of about three times in the latter category. What the real rates were for this period is now impossible to ascertain. In two separate instances informa— tion from two sources within the same organization, that at v : 13' I R: (I a. Q; 53 provided services to construction firms, reported differing numbers of lost-time cases for the same period for a con- tractor, and in one of these instances the information from 223g sources proved to be incorrect. Not all of the errors were in the same direction. In one case a company was re- porting a number of medical injuries as lost—time cases and this became immediately evident on observing their reports, but it was caught and corrected by the Associated General Contractors when the-rates were figured. One other construc- tion company was so far off in hours worked that they report- ed that they would have had to be paying about $6.00 an hour in wages, on the average, in order for their reports to be correct. .As the average wage was found to be around $3.80, they were not submitting all of the hours worked and so making their reported injury rates higher than they actually were. However, they were also probably not reporting all of their lost-time cases either as the number sent in were exactly the same as the indemnity cases in 1961 and also in 1962. In at least three other cases, the hours worked that were reported bore no relation to reality and could not have been carefully determined. They were off in both directions by as much as 50 per cent or a ratio of two to one. These examples are by no means evidence of a complete check for errors. After all of the new information was ana- lyzed and compared with the previous statistics, it was then understood that all was not as it had appeared, but no 54 further checking was done beyond this point in order to find additional mistakes. It had to be resolved that the rates which had been gathered and worked on so carefully were in- valid. In addition, it would be very easy for anyone with access to the monthly reports of all the members of the Michigan Associated General Contractors, plus the number Of indemnity cases from the underwriters or Rating Bureau, to determine more closely the extent of false reporting of dis- abling injuries in order to prove for themselves the correct- ness of the above assumptions. It seems that the limited evidence at hand shows the weakness of voluntarily reporting injuries even though this was not what the research had originally intended to do. Whether a silent conspiracy has been taking place or people just do not take accident sta— tistics seriously is impossible to state, but it is certain that the rates collected in a voluntary manner are definite- ly unreliable. Ohio Frequency Rates The next question then becomes a rather obvious one-—how correct do the Ohio injury rates seem to be? In the first place, the Division of Safety and Hygiene's own statistics tend to refute their published injury rates for the construction industry as previously noted. Furthermore, a check was made on the reliability of the number of lost- time cases obtained from the state. This was done by going 55 through the records of some firms and by interviewing the actuaries of about fifteen others. As there is no private workmen's compensation insurance in Ohio, many employers feel that they need someone to represent their interests when claims are filed. Therefore, most of the contractors in the study have private companies who check on claims, keep the necessary records, submit periodic reports, and make certain that they are not being charged too much in premiums by the Workmen‘s Compensation Bureau. These so- called actuaries collect all of the forms and reports that the employer would otherwise keep on his own premises, but they do not save the originals. Instead, they maintain their own types of records and these vary a great deal. The reason that this is important is that it was impossible to check the amount of disabling injuries as they also are only interested in the costs of medical and compensable cases. .All that was available were the number of indemnity injuries, but these could be compared the same way that they were in Michigan. By doing this it became apparent that there were also inconsistencies here as there were two instances when the number of indemnity cases were larger than the amount of lost-time cases that were supplied by the state. In addition, another contractor, whose records were checked at his Office, had four disabling injuries for 1962, three of which were indemnity cases, but the state only had a record of two for that year. 56 The officials at the Associated General Contractors headquarters in Columbus were not queried for two reasons. The first was-that the information that they had was not as crucial for comparative purposes as it was in Michigan, and no attempt was being made to Show the extent of the negli- gence that was prevalent in reporting disabling injuries. The second was that all of the Ohio contractors had already been asked if they made monthly reports of lost-time cases and only five had been doing this long enough for rates to be figured.. Of these five, two could not produce copies of the monthly forms orfigures and there was some question as to whether they really understood what was requested. They probably did not know their rates because it takes time to process and figure them even though they had been supplying statistics for over a year. The remaining three companies were aware of the Associated General Contractors‘ program for determining injury experience and they supplied the fig- ures requested. In none of these three cases were the full number of lost-time cases being reported to the Associated General Contractors. The ratio was a total of twenty—two disabling injuries submitted, to thirty-seven of which the Division of Safety and Hygiene had a record. This means that there was a minimum of thirty-seven, and that there were probably even more than this number that were of less than a week's duration, that had failed to be properly clas- sified. 57 The big problem in Ohio seems to be with the disa- bling injuries Of less than a week. This was difficult to prove conclusively, but it is almost a certainty that many nonindemnity lost-time cases are not being recognized as such and are merely being called medical or doctor's cases. There are two different types Of workmen's compensation forms that are used to file claims. One of them is blue (Form C—1) and is used for indemnity injuries, while the other is pink (Form C-3) and is employed for nonindemnity cases. There was no confusion with the blue form, but the pink one was an entirely different matter. There was a line on which the doctor was supposed to state the number of days that the claimant was disabled from work, but this was not being done in most cases. This line along with many others was usually left completely blank by the doctor, and this was not being filled in at the company. However, on some forms the word none was entered and on others the number of days lost were written in. Approximately twenty additional people were asked about this including secretaries, actuaries, management, etc., and not one of them said that the doctors were conscien— tious about filling this out. Many physicians are exceeding- ly busy and they probably have their Office help take care Of the forms while they just Sign their names. Therefore, there is no question that some of these lost-time cases are not being reported to the state, and the Division of Safety and Hygiene then has no other way Of finding out about them. 58 How many of these go unrecognized it is difficult to ascer— tain. The improper filling out of reports is probably more of a problem in the construction industry than in any other. There are many changes in employment. Job-sites are scat- tered all over, and there is no doubt that the coordination between the office help and supervisors on the job is in- ferior to situations where everyone is located in one build- ing. The fact that most contractors are relatively small and that the Office is not always notified immediately of the accident or its results confuses the issue even further. NO one seemed to be concerned with the necessity of properly recording all the lost-time cases, and the Workmen's Compen— sation Bureau was not after these people or putting any pressure on them to do SO. There is no doubt that not all cases are being reported, but there was general vagueness and uncertainty and any type of completely satisfactory answer was not forthcoming from anyone involved. About the most positive statement heard was one by a secretary who received the forms from the doctors. She said that they "usually" report the days off the job. The implication was that if they did not it was no concern of hers, for she had one Side Of the sheet to fill out, and they had the other. If the lost-time cases were not noted, that was the doctor's concern and not the contractor's. Everyone else that was queried on the subject either did not know or said that they 59 thought not all cases were being reported and let it go at that. It does seem certain, however, that when the informa- tion is forwarded, there is a record of all these disabling injury statistics kept by the Division Of Safety and Hygiene. Hours Worked Another example in a different area also shows how casually these statistics are treated. Ohio rates are pub- lished on a "voluntary" basis as the employer has to send in a form that Shows the hours worked in his company for the year. Otherwise his experience is not included in the indus- try-wide average. The files containing these reports, which were located in the statistical department, were personally checked for the year 1961. This was information on the lat- est year available at the time as the 1962 forms were still not properly arranged and filed. There were immediately found to be some Obvious errors and discrepancies which had been passed over and accepted. One company reported having an average of sixty—four employees for that year and total hours worked of 8,654. This figure would cover about four full-time employees. If sixty—four peOple had actually worked they would have averaged about 135 hours each or a little over three weeks work for the entire year. This was brought to the attention of the clerk in charge Of the opera? tion and she said that this was perfectly alright. The sad thing is that the payrolls for all of the risks in the state 60 Were on this person's work desk, and a quick check would have definitely shown that some sort of a mistake had been made. The actual payroll was $157,239 which meant that there were approximately twenty full—time employees or the equivalent thereof, and that about 40,000 hours had been worked. In addition, the contractor was located in the same city, so that a phone call could have immediately straight- ened out the Situation. Not only was nothing done to cor- rect the mistake after it had been brought to their atten- tion, the whole thing was taken very lightly and no impres- sion was made or concern shown on the part of anyone. A further incident Of this type shows just how far off these voluntary reports can be. This very obvious error was over 60,000 hours off in the other direction and was ap- proved just as readily, as nothing had been done to attempt to correct it. Anyone at all familiar with these forms could have spotted the discrepancy immediately if there had been any intention or effort to do so. The contractor re- ported 175,369 hours worked to the state for 1961, and said that there were only sixty-four employees (the same number as in the previous example where there were only 8,600 hours worked). ,If the.sixty-four people were on the job full-time this would still come to only about 128,000 hours not 175,000, so it should have been immediately apparent that something was wrong. The yearly payroll indicated that the hours 61 worked were close to 114,000 hours or a difference Of about 60,000. What really is surprising here is that the same firm reported hours on the job of only 60,000 to the Asso- ciated General Contractors for that year. A difference in reporting of from 175,000 to 60,000 hours--certain1y not the type of statistics that anyone should put much faith in. There was one more glaring inconsistency that went unnoticed. This showed an average of 304 employees working only 68,029 hours, or an average of less than six weeks em— ployment each. _A full-time person works about forty hours a week for fifty weeks, which comes to 2,000 hours. If 2,000 is multiplied by 304 employees, the result is well‘ over 600,000. In other words, the reported figure was about ten times Off. The correct number of hours worked according to the payroll was a little over 300,000, which means that they only had an average number of employees of about half Of what they claimed. Practically everyone made the same type of mistake with the number of employees. They sent in the total amount Of personnel that worked for them in the period instead of the average number that the form very clearly calls for.1 Finally, in one other firm, the report to the state was correct at 96,081, but these people sent in monthly reports to the Associated General Contractors totals ing only 79,363 for the identical period. Certainly every- one concerned cannot be taking voluntary reports Seriously! llbid., NO. 9, p. 7. 62 To summarize the hours-worked forms briefly: there were fifteen Ohio contractors out of the twenty-five in the sample who returned these reports in 1961. Of this number, there were three errors that were so large that they should have been caught on sight. Further-checking with payrolls showed that there were three more mistakes of over 20 per cent. Thus 40 per cent of these returns were worthless in— sofar as accuracy is concerned, and while there were errors in most of the others, they did bear some resemblance to reality. _At least the Industrial Commission did not allow the control over reporting the number of disabling injuries up to the individual contractor, which means that a greater percentage were probably being reported than would ordinar- ily be the case. While the doctors were not keeping perfect Check, they at least had no special biases, so that errors occurred in a random fashion. These things will be examined more closely at a further point in the chapter. Certainly, using the voluntary hours-worked would not lead to accurate frequency rates and this was realized at an early point in the proceedings. Instead, all possible information was gathered in order to obtain the average hour- ly wage paid and then to divide this into the payroll in order to get the total hours worked. As all of the firms in the sample were not too much different, the average wage was notexpected to vary by an unusually large amount. It was found that the range was from approximately $3.50 to $4.10 and that a good average figure was around $3.80 an hour. 63 Most companies would fall close to this amount, and although there was some chance for error, this procedure was much more accurate than employing statistics that were obviously incorrect. In addition, being a few hours off would not affect the frequency rate to any appreciable extent, while the difference of only one disabling injury could change the results by ten or twenty points depending upon the size of the labor force in the particular company involved. There- fore, the payroll figures were employed in all cases and in both states, and any individual differences in Wages would tend to cancel out when state-wide rates were compared. ,When it was realized thatrun:all lost—time cases were being uncovered, any apprehension about using this system vanished. While it is true that payroll figures cannot be used for all businesses, they Should at least be employed in Ohio to check the man hours reported. ,However, before any improve- ments are made in this area, there should first be some sys- tem for insuring that untold numbers of disabling injuries are not being ignored. Statistical Evidence VUp to this point, there have been no charts or tables Showing the injury experience collected from the var-. ious firms and states. There had to be a clear realization Of what was involved and what had taken place in the research before this could be done. Nevertheless, even though the 64 statistics are unreliable, some comparisons can be made with possible benefit. Let us at least examine what was found. Table 2-1 shows the average combined frequency rates for 1961 and 1962 for the firms in both states from the lowest to the highest. The two years were combined in order to give a broader base so that chance factors would play a lesser part, eSpecially in the smaller companies. The fig- ures for Ohio came from the lost-time cases provided by the -Division of Safety and Hygiene and none of the mistakes that were found have been added. For Michigan, the rates have been increased upward only to the extent that the number of indemnity cases have been substituted when they_have been higher than the reported number of disabling injuries. This means that the averages are a little farther apart than they should be, but probably not by a very significant amount. The reason that this was done was so that there would be no question whatsoever that these rates would be 100 per cent accurate in one major aSpect. They are certainly unreliable as to maximums, as there is no doubt that in both cases the frequencies 355 higher, but it is positive that they are no lower than this. When it is recalled that the companies in the sample are expected to be among the most safety conscious firms in the construction industry, and also among the larger ones, a frequency rate of around 40 minimum is very high. 65 TABLE 2—1 FREQUENCY RATES OF CONSTRUCTION FIRMS IN OHIO AND MICHIGAN, FOR THE COMBINED YEARS OF 1961-1962 ~Number of Firms Ohio Michigan 1 22.16 5.11 2 22.54 15.39 3 22.73 17.23 4 24.60 18.13 5 24.92 19.64 6 27.91 20.68 7 28.77 23.45 8 30.18 25.50 9 31.09 26.86 10 31.44 29.33 11 31.70 36.41 12 34.28 38.45 13 36.23 38.74 14 36.31 39.95 15 36.83 40.01 16 38.34 46.45 17 38.53 51.34 18 45.02 54.88 19 50.09 55.75 20 50.85 60.16 21 51.13 73.12 22 57.68 79.94 23 60.70 93.06 24 67.54 93.51 25 77.65 95.40 Average 37.99 40.75 66 Some of the more hazardous areas like steel erection, bridge conStruction, excavation, etc., plus the experience of nu- merous small subcontractors, have not been included in the study and their experience is undoubtedly much worse than the general contractors. Therefore, the greatest value Of these statistics is in showing that the various "voluntary” rates published from all sources are definitely misleading, as anyone looking over published statistics would tend to think that the average for the industry was in the 30's. While it would probably surprise everyone concerned, a much better guess would be that the real frequency rate for the average of 311 firms in the construction industry is two or three times that number. A further look at Table 2-1 shows the great differ- ence in the range of the figures. The Ohio firms are closer together as compared to those in Michigan and if these rates were accurate the natural conclusion would be that some Mich— igan firms do a really good job and take an active interest in safety while others are completely in the dark. Michigan had the four highest and the six lowest frequency rates. However, the firms with the ten lowest figures were or had been members of the Associated General Contractors and so had supplied their own voluntary statistics. Perhaps this also explains why there seemed to.be more control over the rates in Michigan, as there was less variation in these statistics from 1961 to 1962. The companies that were low 67 in one year also tended to have low rates in the next, but this was not found to be true in Ohio. In other words, the safety legislation in Ohio was not exerting the degree of stability that one would have expected, while this phenom— enon was occurring in Michigan. Of course, in the latter case the control was found to be in the reported number of disabling injuries. What is the ratio of lost-time cases of under a week's duration to those that last longer than this amount of time? The obvious answer is that there are relatively fewer of the more serious injuries. Just as one would ex- pect that there are many times the number of first aid injuries than there are doctor's cases, and doctor's cases to disabling injuries, it is also natural to suppose that there are many more nonindemnity lostetime cases than indem- nity accidents. This reasoning holds true for most areas, but if we are to believe what was reported in both states, the opposite would be the case in the construction industry. This is beyond logic and all known experience, and is fur- ther proof that frequency rates are higher than those sub- mitted. Therefore, let us observe Table 2-2, which shows the results of this type of inquiry. Looking at Ohio's sta— tistics reveals that there is information for three years. The first column indicates the number of firms that there were figures for during that period. In the third column are the reported lost-time cases from the Division of Safety 68 $eo $0 Op H. o mma ova mamuoH gem goa Ow m. o we mm mooa ma $ooH $0 Op 0.0 o ow ow Hooa ea cameras: gam gov Ow o.H boa HHH mam mamon §ao Rom OH 0. am ow ow mooa ma $om $om Op o.H be be «0 HOOH ma gem $60 Ow o.a om ma we OOOH o Oflno mommo mommo mommo mommo mommu mommo magma >wflchOGH oefiHuumoq >pficsoocH Op oeflfinwmoq specsoqu osfipnpmoq you» mo mo >pfiesooeflcoz mommo oefifinumoq >vfl28ooefieoz Umpuooom Honesz “coo mom mo «coo mom >uflcsoncficoz OOHHOOom mo oavmm meoH-oooa .OHxO az< zeonOHz 2H mzmHm mo mmmPayroll Insurance Payroll 1 1.29 694 1.31 142 2 1.37 554 1.38 298 3 1.50 1,513 1.45 238 4 1.53 155 1.49 296 5 1.68 152 1.57 194 6 1.78 165 1.57 338 7 .1.80 489 1.59 212 8 1.87 232 1.65 324 9 1.88 182 1.66 205 10 1.88 282 1.69 315 11 1.91 186 1.75 403 12 1.93 305 1.84 372 13 1.98 251 1.89 253 14 2.01 1,604 1.91 552 15 2.02 343 1.99 1,087 16 2.04 422 2.00 675 17' 2.24 1,158 2.01 123 18 2.29 198 2.04 221 19 2.33 567 2.08 951 20 2.35 98 2.14 1,481 21 2.42 367 2.17 491 22 2.62 860 2.43 466 23 2.65 420 2.52 923 24 3.09 793 2.65 72 25 3.54 - 506 3.24 3,445 100 strictly on the size of the premium.1 In Michigan the nor- mal experience rating procedure does not give the larger firms this same type of advantage. Therefore, it is only possible for large companies in Ohio to pay such low rates. In the second place, the broad classification number 5601 allows big firms, which do a large proportion of dangerous work, to pay the basic rate of $2.67. In Michigan, larger firms tend to use more of the high cost categories and to pay for them separately at increased expense. A good exam- ple of this would be concrete construction, which is well over $4.00 per $100 of payroll. Another way Of looking at the above is to correlate size and the experience modification as in Table 3-5. In Michigan, the two smallest firms pay a penalty and also six out of the last eight are above the manual rate, while those in the middle all have a discount. On the other hand, the same situation is not true in Ohio, as size and penalties have no seeming correlation. However, the last nine com- panies, or those with payrolls of over $500,000, have both the three lowest and the two highest experience modifica- tions. Thus, it can be said that in Michigan the smallest and largest firms tend to pay a penalty, while in Ohio it is the large companies who both tend to save more and to spend 1Ohio, Bureau of Workmen's Compensation, Handbook for Employees andgEmployers: _Wgrkmen's_§ompensation Act (revised edition;Columbus, 1959): p. 12. 101 TABLE 3-5 COMPARISON OF PAYROLL IN THOUSANDS AND THE EXPERIENCE MODIFICATION FROM 50 CONSTRUCTION FIRMS IN OHIO AND MICHIGAN, FOR THE COMBINED YEARS OF 1961-1962 Ohio Michigan Number Experience Experience of Firms Payroll Modification Payroll Modification 1 98 .93 72 1.30 2 152 1.11 123 1.09 3 155 .72 142 .87 4 165 .74 194 .82 5 182 .91 205 .84 6 186 .88 212 .95 7 198 1.08 221 .96 8 232 .97 238 .81 9 251 .76 253 .85 10 282 .78 296 .92 11 305 .84 298 .81 12 343 .87 315 .72 13 367 .97 324 .86 14 420 1.18 338 .97 15 422 .98 372 .83- 16 489 .78 403 .92 17 506 1.53 466 .98 18 554 .53 491 1.25 19 567 .92 552 1.05 20 694 .53 675 1.05 21 793 1.23 923 1.03 22 860 1.14 951 1.16 23 1,158 1.03 1,087 .87 24 1,513 .63 1,481 .84 25 1,604 .86 3,445 1.12 102 more. In other words, their size alone permits them to do this under the Ohio system where they have to take larger risks than the small contractors and also stand to gain more if the fund pays out less in settlement of claims against them. In Table 3—6 the range of discounts in Ohio is great- er than Michigan's, as it has the three lowest rates and also the highest one. This is again because there are not the same number of gradations and advantages in Michigan due solely to size, as there are in Ohio. On the other hand, a smaller, safety conscious firm in Michigan is able to save more (if the costs of settling claims against him are low) than the same size contractor in Ohio, as the latter is more closely limited in both his possible credits or penalties. The Experience Modification and Insurance Costs The average experience modification in Table 3—6 is 92 per cent in Ohio and 95 per cent in Michigan. This shows that contractors in the latter state are not paying less for workmen's compensation coverage because of this discount, but for the other reasons previously mentioned. Furthermore, these two percentages are so close that they, by themselves, can be responsible for no other significant differences in the findings. There are a total of seven penalties in Ohio- as compared to eight in Michigan. In addition, the eleventh lowest company in each state has a rate of 87 per cent, so 103 TABLE 3-6 EXPERIENCE MODIFICATIONS FROM 50 CONSTRUCTION FIRMS IN OHIO AND MICHIGAN, FOR THE COMBINED YEARS OF 1961-1962 Number of Firms Ohio Michigan 1 .53 .72 2 .53 .81 3 .63 .81 4 .72 .82 5 .74 .83 6 .76 .84 7 .78 .84 8 .78 g .85 9 .84 .86 10 .86 .87 ll .87 .87 12 .88 .92 13 .91 .92 14 .92 .95 15 .93 .96 16 .97 .97 17 .97 .98 18 .98 1.03 19_ 1.03 1.05 20 1.08 1.05 21 1.11 1.09 22 1.14 1.12 23 1.18 1.16 24 1.23 1.25 25 1.53 1.30 Averages .92 .95 104 that even though Ohio is way ahead in the number of firms paying less than 80 per cent, Michigan makes up for this with companies in the 80 to 90 per cent range. Ohio has an eight to one advantage below 80 per cent but is behind by four to ten in the 80's, or a difference of one. Both states have six employers with costs in the 90 per cent bracket. When the experience modification is compared with the net premium per $100 of payroll (Table 3-7), there is not found to be a totally consistent correlation, although one generally follows the other in each state. The reason for this inconsistency is that in both states there is a difference in the time period involved, as the insurance costs have been figured on a calendar year basis for this research, and the experience modification is based On the premium year. In Ohio, the insurance year changes on the first of July and in Michigan the policy dates can be at any time depending upon when the coverage was first pur- chased and/or the system of the particular underwriter. In addition, the amount Of employment can vary a great deal in the several construction classifications, which have differ- ent rates per $100 of payroll. This can change the net pre- mium even when the total number of employees and the expe— rience modification remains the same, and it also explains the variations between companies in insurance when their discounts are similar. For example, some contractors have 105 TABLE 3-7 COMPARISON OF EXPERIENCE MODIFICATIONS AND INSURANCE COSTS PER $100 FROM 50 CONSTRUCTION FIRMS IN OHIO AND MICHIGAN, FOR THE COMBINED YEARS 1961-1962 Ohio Michigan Number Experience Experience Of Firms Modification Insurance Modification Insurance l .53 1.23 .72 1.69 2 .53 1.37 .81 1.38 3 .63 1.50 .81 1.45 4 .72 1.53 .82 1.57 5 .74 1.78 .83 1.84 6 .76 1.98 .84 1.66 7 .78 1.80 .84 2.14 8 .78 1.88 .85 1.89 9 .84 1.93 .86 1.65 10 .86 2.01 .87 1.31 11 .87 2.02 .87 1.99 12 .88 1.91 .92 1.49 13 .91 1.88 .92 1.75 14 .92 2.33 .95 1.59 15 .93 2.35 .96 2.04 16 .97 1.87 .97 1.57 17 .97 2.42 .98 2.43 18 .98 2.04 1.03 2.52 19 1.03 2.24 1.05 2.00 20 1.08 2.29 1.05 1.91 21 1.11 1.68 1.09 2.01 22 1.14 2.62 1.12 3.24 23 1.18 2.65 1.16 2.08 24 1.23 3.09 1.25 2.17 25 1.53 3 1.30 2.65 .54 106 much more clerical help than others, and this type of person- nel costs practically nothing to insure. Therefore, a firm with an extraordinary amount of Office help will have a relatively low net premium, and everything else being equal, they should also have a much lower frequency and severity rate. The experience modification is 223 a good indicator of a company's injury rates by itself, although it is useful when used with other data. This is because: (1) It is an average Of the past several years' experience. (The costs of the fund in settling claims in Ohio are averaged for a five year period, and in Michigan there is a one year lag and then the three previous years are combined.) (2) A really serious and costly accident can distort the picture for a long time—-depending upon the size of the contractor involved. (There is a procedure which charges all of the costs up to a certain point against a firm, but no more than this amount per injury.) (3) A costly injury can distort the modification much more in a small company than in a large one. ,However, as previously mentioned, only larger firms in Ohio can have the extremes in credits or debits. (4) Reserves may be set aside because of a claim and even though the full amount is never used for that purpose it will still be charged in the rating procedure. Thus, it can be seen that many factors can be responsible for an experience modification being very high while the frequency rate is low and vice versa. 107 Naturally, some aspects of frequency and severity are included in experience rating, but this percentage is really only a reflection of the direct costs of the under- writers. Medical-only cases cost the insurance company money but they do not influence the injury rates of a con- tractor. On the other hand, it is unreasonable to suppose that there is not some sort of loose ratio between medical and lost-time cases, which would not vary too much between firms in the same industry. Another consideration is that there is no necessary correlation between the seriousness of an injury in days lost or charged and what the expenses are to the insurance company. To complicate matters even further, the manual rate may increase and this alone would change the experience modification if everything else was to stay the same. Stated in another way, a contractor's injuries may become more numerous and the direct costs in settlement of claims may also rise, but if the manual rate went up in this period the result could well be that the credit or debit would stay exactly the same. However, even with all of the reservations mentioned, if a contractor has a consistently high (or low) experience modification over a considerable period Of time, it is safe to assume that his safety program probably leaves much to be desired (or is doing well). If the changes in manual rates are known and other information is at hand from a num- ber of companies, then the level and direction of this 108 discount gives valuable clues as to what is occurring. Two examples Should suffice to prove this point, and they come from comparisons with all of the available data and the fre— quency rates reported. (The appropriate tables and correla- tions have not been included here because of the errors that were previously mentioned in Chapter II with nonindemnity lost—time injuries.) In the first case, an Ohio contractor had the second lowest combined frequency, which was 22.54; however, his experience modification was 153 per cent. These two figures do not go together, especially when the previous year's penalty was 165 per cent of the basic rate. The example in Michigan showed an employer who reported a frequency in the middle 30's, but he had the highest pre- miums per $100 of payroll and an experience modification that was the fourth highest, well over 100, and going up. It was later found that he had reported eight less lost—time cases than there were indemnity cases in 1961. _Certainly the experience rating does not tell the story that well-kept frequency and severity statistics do, but if injury rates are maintained at a low level because of a safety program this percentage will naturally follow. It is of crucial importance to a contractor that he does not have a high mod- ification as this will seriously affect his ability in come petitive bidding situations and also his profits. This be— comes doubly serious if the penalty had been earned during a period of relatively low business activity and then volume 109 was to increase greatly. Regardless Of what he did then, his premium would be enormous and this high cost could cut into profits for a long time. Cost Motivation During the interview, everyone was asked if they had received any cost motivation, how much, and from what source or sources? In Ohio, ten firms answered that they had been recipients of various degrees Of persuasion, while fifteen of them had not. Of the ten affirmative replies, four had Obtained cost information from their actuaries, four from the state, and two from the Associated General Contractors. A dozen companies had received this type of motivation in Michigan, nine from their insurance underwriters and three from the Associated General Contractors. Two of these had also been given assistance and literature from a local safe- ty organization and the National Safety Council. Of the re- maining contractors, twelve said that they had heard nothing at all in this reSpect, and the remaining one was influenced in a sense by his own actions. He had compared prices and changed insurance companies several times and became awarfi of the importance of costs in the process, even though no one had actually set out to help and to educate him in this area. From the above figures, one might receive the impres- sion that the general situation in regard to cost was not too 110 much different in the two states, but nothing could be fur- ther from the truth. The questions that contractors were asked referred to someone trying to motivate them by some form of persuasion or education, and this had been about equal. However, the environment in the two states was not the same, and accounts for there being a great deal more in- terest and understanding in one place than the other. In Ohio, all forms, procedures, and records are standardized. There is not the confusion one finds when eighty different underwriters are competing in an area, as they are in Mich- igan. In addition, each firm has a penalty or a discount assigned to it, and a form is then sent which clearly indi- cates the amount that it is to pay per $100 of payroll. .Building construction classification number 5601 was the only category that twenty-three out Of twenty-five companies in the sample had besides Office personnel, so they had no doubts about the amount of this expense. The experience mod- ification was the only discount given, which made it very simple for them to observe the rise and fall of their work- men's compensation net premium and the costs per $100 of payroll. Most contractors in Ohio are apprehensive about the proper administration of the fund by the government. For this reason they have private actuaries check on the charges assigned against them, and on all Of the various computations which affect their experience modification. This outside 111 force stands apart and criticizes the state's actions when necessary, and this whole process tends to make their cus- tomers more aware of costs. The fact that the government knows everyone's premiums also makes for less surreptitious- ness in general, as one insurance company in Michigan might take business away from others if these costs were out in the open. The competition makes for secrecy, and a contrac- tor's discounts tend to be a hush-hush subject. Finally, there is a system of penalties in Ohio, which range from 15 to 50 per cent of the total cost of an injury.1 This money is given in a lump sum to the employee who was hurt if it can be shown that the contractor had not been follow— ing some provision of the safety code when the accident occurred. This penalty is not covered by the regular work- men's compensation and is an out-of—pocket expense, which results in additional strong motivation from an economic standpoint. There can be no doubt that the whole procedure concerning the insurance costs of accidents in Ohio is rela- tively simple and generally understood. The Situation in Michigan is just the opposite. Things are so confusing that the average employer just does not know what is going on. Practically every insurance com- pany has different forms and individual methods of figuring- the premium, giving discounts, collecting the payments, etc. 1Ohio, Constitution (1924), Art. 2, sec. 35. 112 The numerous classifications of building construction, which vary widely insofar as costs are concerned, makes it impos- sible for the firm to have any idea of what they are paying per $100 of payroll. Besides these separate prices, the percentage of workers in each category is also continually changing. The total premium by itselftells nothing because the total volume of production and activity is never the same from year to year. The only way for the contractor to actually know what his costs are per $100 of payroll, is to do the necessary calculations himself. Only one person in the sample had ever tried to do this, and he proved to be off in his estimate by about 25 per cent. It is almost impossible in some cases for a company to even find out their past ESE premium--depending upon their accounting procedures and whom they are insured with. One owner assigned the workmen's compensation expense for each construction job on an individual basis and against the revenue from that project. Therefore, he was uncertain of his total costs and asked the interviewer to procure this figure from his insurance company which was one of the large and reSpected firms. The trip was authorized in writing and on the first occasion the statistics supplied showed the firm as paying $5.98 per $100 of payroll. On the next visit it came to $1.12, and on the third the correct information was finally Obtained. These errors were not due to a lack Of cooperation, but because the people involved had never 113 had this type of data previously requested, and they were uncertain as to how to go about getting it. When another contractor was asked for his net workmen‘s compensation in- surance cost, he could not supply it because it was combined with other types Of coverage. He further stated that he not only did not know it, he did not even care, as he was a con- struction specialist and could not be bothered with insur- ance.. He also said that he trusted his agent and allowed that person to handle everything that was necessary. When approached, the insurance agent also had a very difficult time finding the figures and could only come up with a "close approximation.” The words of a very well informed and safety conscious builder came to mind at this point. They were: If the price of Shovels or other such material went up, then the average contractor would be right on top of things and complaining, but the cost of workmen's compensation insurance could be raised and he would not even be aware of it. AS an example of this, the firm with the highest experience modification in Michigan did not have any idea of his costs or that he even had a "problem" in safety. Perhaps the primary reason that there is difficulty in determining the net premium is because of the many types and variations of deductions from the manual rate that are available in addition to the experience modification. First of all, there is a discount of from 3 to 16 per cent, depend- ing on the firm's size, if the coverage is With a mutual 114 insurance underwriter. Next, the stock companies give cred- its that range from 9 to 14 per cent if the premium is be- tween $4,000 and $95,000 annually. The mutuals in turn give a further dividend of from 10 to 15 per cent at the end of the insurance year.1 There are still other types of pol- icies that can provide additional savings, but the risks are also greater. These so-called retrOSpective rating plans have four degrees of protection, A, B, C, and D, and as the possible discounts become greater the penalties may also be much larger, depending upon how high the direct costs in settlement Of claims against the contractor become. An example of how involved these plans can be is as follows: One insurance company was approached in the late summer of 1963, and they had still not determined the net premium for the calendar and insurance year of 1962. This was a lag of eight months, which makes the net insurance cost almost im- possible to Obtain while it is still relevant. Of course, this is by no means all that there is to the discount pic— ture, but it will suffice to Show the chances that there are for a contractor to become confused. Most employers in the construction industry do not realize that they can shop around and save money on their 1Basic ManuaIAOf Workmen's Compensation and Employer Liability Insurance (Detroit: Michigan Workmen's Compensation Rating Bureau, December 1, 1963), p. 6A. 115 workmen's compensation insurance. This fact is not publi- cized, and the impression that one receives is that every— body in an industry pays the same rate, and the only competi- tion that exists is concerned with service. While it is true that a contractor's experience modification is identical re- gardless of who the underwriter may be, the similarities cease at this point. The better insurance companies will investigate a prOSpective customer and if his accident pre- vention activities are poorer than average, they will not write a policy for him. The point being stressed here is that if a contractor is safety conscious and also knows what his insurance costs are, he can bargain and insure with one of the good companies who charge less, and who also give the best service in both safety inSpections and accident preven- tion. The average builder does not understand all this very well, especially those who are paying the higher premiums. Furthermore, many firms do not look around for lower prices in workmen's compensation coverage because they have an independent agent who handles their insurance and who receives a commission on the premium from the underwriter. These agents are not eSpecially interested or too much con- cerned with safety as such, and when they are choosing an insurance company, the safety services provided do not seem ~ to be of primary importance. Actually, the underwriters who give the biggest discounts and the better safety services do not deal through a middleman, which clearly indicates that 116 what is good for the agent is not necessarily in the best interests Of the contractor. In Ohio, the actuaries side with and work for the businessman. Costs are continually discussed and the govern- ment is often criticized. However, in Michigan there is no one like this to explain the various intricacies to the em- ployer. Thus, while the average contractor may be somewhat suSpicious of the Workmen's Compensation Bureau in Ohio, there are relatively few complaints about insurance costs from Michigan firms. They really do not know when their ex- penses are going up and to what extent, and they have not been generally aware of how much the manual rates have been increasing in the past several years. In other words, the secrecy and lack of understanding concerning premiums have made things easier for the insurance companies, but they have not done a great deal toward motivating the employers to reduce the number and severity of injuries. Most Mich- igan firms know about their eXperience modifications, but this figure does not tell as much as it seems to. The manual rates can easily increase to the point that a contractor's experience modification discount would be larger, while his costs per $100 of payroll would in reality be higher than when he received the lesser discount. Therefore, while the amount of education and persua— Sion in the area of cost motivation by the various sources in both states is not too much different, the basic system 117 of workmen's compensation coverage in Ohio leads to invol- untary awareness and more real motivation. There have been no scientific studies of the costs of injuries made in the construction industry, and without this type of research, SO-called motivation can only be a series of insignificant pep-talks. This is important because what contractors ac- tually seem to feel is that they have no real control over these expenses. They continually cite examples of workers being hurt through their own negligence, which results in premiums going way up for several years. Although this may not be true, it is the way that the average contractor looks at injuries and the costs of accidents—-he feels bewildered and ineffective. Is anyone aware of what really can be done on a financially sound basis, and can they prove it? The construction industry is like no other in respect to acci- dent prevention; they have their own particular problems. Even though it has been shown that safety pays in most areas, there should be extreme caution about transferring general- izations from other industries without the necessary facts to back them up. Before this subject is closed, there is one drawback .fi “.4 “H o> o> “.4 0H oc: oc: c>= oo o<3 or: CCU No 20 20 z: zm 20 20 z: z: 1 No No No No No No No No 2 No No No No No No No No 3 No No No No No No No No 4 No No No No No No Yes No 5 No No No No No No Yes Yes 6 No No No No No Yes Yes No 7 No No No No No Yes Yes No 8 No No No No No Yes Yes No 9 No No No No No Yes Yes No 10 No No No No No Yes - Yes 11 No No No No No Yes Yes Yes 12 No No No No No Yes Yes Yes 13 No No No No No Yes Yes Yes 14 No No No No No Yes Yes Yes 15 No No No No No Yes Yes Yes 16 No No No No No Yes Yes Yes 17 No No No No No Yes Yes Yes 18 No No No No No Yes Yes Yes 19 No No No No No Yes Yes Yes 20 No No Yes No No Yes Yes Yes 21 No No Yes No No Yes Yes Yes 22 No No Yes No Yes Yes Yes Yes 23 No Yes Yes Yes Yes Yes Yes Yes 24 Yes No Yes No Yes Yes Yes Yes 25 Yes No No No Yes Yes Yes Yes Totals 209 In other words, the only correlations that can be made are those concerned solely with harassment. It can be readily observed that nineteen Ohio contractors answered exactly the same way, and they had not experienced any difficulty and also did not expect any in the future. In addition, the two builders who had been slightly pressured to ground their electrical equipment, did not believe that they would have any problems of this type again. There were only two in- stances when there was more than one yes answer in Ohio, and these came from the firm that received the safety award that did not deserve it, and the owner who did not have much faith in human nature. Neither of these companies had ac- tually been harassed at all. The remaining significant fac- tor is that a greater number of people were bothered by the unions than by the representatives of the state. It Should be kept in mind that the questions in Ohio were slanted toward past happenings even though two of the four dealt with the future. The Michigan companies had very little experience with any of this and they were primarily concerned about what would occur if legislation was to be enacted. In other words, the reSponses in one place were based on facts and in the other on fears. There was much less uniformity in Michigan as three contractors said no in all of their answers and four had replied in the affirmative in each case. The most numerous response was the one where they had not experienced harassment but expected this from 210 all sources if a safety code was put into effect, and this happened eleven times. In comparison with Ohio, the only similarities are that their actual previous abuse was small, and they both had the most mistrust of the unions. In addi— tion, less trouble was foreseen from the individual inSpec- tors than from the worker's representatives. Inspectors In order to better understand the average contrac- tor's relationships with and feelings toward enforcement and government safety Specialists, everyone was asked about the inSpectors' orientation or emphasis, his qualifications, and the assistance that he provided. On the whole, the Ohio em- ployers thought well of the representatives from the Division of Safety and Hygiene. In answer to whether the inSpector was primarily enforcing rules or being of service in safety, ten builders said that he was providing a service first, and ten others replied that the main emphasis was on the regula- tions, while the remaining five believed that the two ap- proaches were evenly balanced. There were sixteen builders who received helpful advice and assistance in accident preven- tion from him apart from the restrictions in the code, and twenty-two who were of the opinion that the state inSpector was qualified and had the proper knowledge and training in the area. Therefore, even though ten respondents thought that the primary emphasis was on enforcement, and nine had 211 never been helped outside of the rules, there were only three people who said that their state safety representative was not qualified to do his job. Perhaps one of the major reasons that Michigan con- tractors have such little faith in government safety regula- tions is because of their past experience with these restric- tions and the inspectors who enforce them. The situation is different in the two states and the same things are not being compared as federal inspectors are referred to in this para- graph while state personnel were discussed in the last one. In Michigan both parties do not have the opportunity to work with and come to know one another as they do in Ohio. Only a fraction of the typical firm's work is for the federal gov— ernment and the safety personnel are not necessarily the same ones on each separate construction project. When asked if they ever had to follow safety rules and Specifications be- cause of various government contracts, fifteen interviewees in this state replied in the affirmative. However, three companies had not had federal safety people on their jobs, while the twelve others had had experience with repreSenta- tives from United States departments. Only three builders thought that these people primarily tried to be of service in accident prevention, and the other nine said that observ- ing the Specific rules was stressed. In addition, there were merely two companies that had ever been helped in safe- ty, and eight out of twelve contractors were of the opinion 212 that the federal inspector was not consistent and did not have the necessary knowledge and training in construction safety. Although additional information was not Specifically requested, the recorded comments Show that on the whole, the Michigan employers were not too happy with the Army Corps of Engineers inSpectors. There iS some doubt and confusion here because it was not certain in all instances as to exactly who was being discussed, but if the Corps of Engineers was men- tioned it was recorded, and this was done in ten of the twelve cases. For example, the four contractors who felt that they had been harassed in the past all criticized the ébrps and said that the letter of the law rather than the Spirit was stressed. They called the restrictions asinine and stated that most inSpectors did not know anything about accident prevention and just followed the manual. The expe- rience of these people was so bad that all of them feared future haraSsment from all sources without exception. These builders were the ones on the bottom of Table 6-2 that had all yes answers. On the other hand, two of the three at the top of the page with complete no reSponses were also visited by the Army Corps of Engineers personnel. One of them thought a good job was being done, but the two received no help in safety and both believed that the primary emphasis was on enforcing the restrictions. Furthermore, of the five Michigan firms in the sample that were not worried about 213 future harassment, four of these had been contacted by fed- eral inspectors. It seems that the competence of the indi— vidual representative is all important and that there is also a lot of variety in this reSpect. The only discussion of a situation involving-real government harassment that was described during the inter- views was also attributed to the Army Corps of Engineers. This did not occur to a member of the sample, but to one of his associates. It seems that there is an extra cable re— quired on some types of temporary elevators and the contrac- tor in question did not have this. .Even though the one cable was in excellent condition and could have done the work, the added safety factor was missing. The inspector saw this violation in the morningaand shut down the job immediately. The owner promised that he would have the needed item the next day as it would take that long to ob- tain one; however, the government official was adamant. The chances of an injury occurring on that day were infinites- imal, and more so if people were careful, for the one cable was all that the owner regularly used on private building projects and no accident had ever happened before. This was an expensive Shutdown because all of the_employees had to be paid for the time lost. Certainly a warning here would have been in order. Another example of poor public relations was the case of the corps representative who boasted to one employer that he was leaving in order to go 214 and close down the construction project of another company. One respondent who had built a large post office claimed that there were about fifty corps of engineers inSpectors on the job and they were in each other's way so much that one of them sustained an injury because of this situation. Their presence did not seem to help very much because his frequency and severity rates for that year were enormous even though this firm was listed as one of the most safety conscious in the study! Of course the Michigan builders could be merely prejudiced, but in the case of Ohio there was some actual basis for comparison between state and federal safety per- sonnel. There were ten companies that had done work for the federal government but two had had so little experience that they could not offer an opinion. Of the remaining eight firms, four of them believed that state and Army Corps of Engineer inspectors were very much alike, and the others thought the federal officials were more strict, petty, or rigid while one builder stated that they were better trained but that they also carried precautions to ridiculous ex- tremes. Everyone was pretty much agreed that they were on the construction site more often, and in some cases never left the job at all. These conclusions are much like those in Michigan as even the one person who thought that the corps inSpectors did a good job also believed that they went overboard on safety. The general opinion that they were too 215 petty or strict also existed in about the same prOportions in the two states. A brief summary shows that while 40 per cent of the Michigan contractors who had dealings with the Army Corps of Engineers had felt harassed, only 8 per cent of the sample in Ohio had this feeling about the state representative. In addition, 40 per cent of the employers in the latter state believed the federal program to be too strict and arbitrary in nature. Another conclusion seems to be that there is a wide range in the capabilities of various inspectors and they are the most important link in any safety program. Man- agement's cooperation in accident prevention is essential re- gardless of whether there are regulations or not and this depends in great part on the individual inSpector. Even if the safety legislation is ideal and the program is well ad- ministered, poor personnel in the field could ruin every- thing. It has been previously stated that some areas in Ohio have firms which take much fewer precautions than others. An analysis of the information in this chapter in- dicates why this is the case in one city. There were only three respondents who thought that their state inspector was not qualified and they were all speaking of the same man. The five contractors in that location all felt that this official stressed enforcement of rules and gave no assist- ance in safety, which probably helps to eXplain why accident prevention activities are below average in these firms. 216 Furthermore, the only instance of a threat to shut down a job that was recorded during the interviews in Ohio came from this person. Government Control It has been fairly well established up to this point that Michigan contractors do not want to see greater govern- ment control, while the Ohio builders do not seem to mind what is being done in their state. However, in order to gain a better idea of the degree of acceptance of the state's involvement in safety, a series of questions was asked which had to be entirely different in the two areas. Ohio construction people were queried as to whether or not the present law was acceptable; about the effectiveness of the state program; what they would like to see changed; and if the government should do more or less in accident preven- tion? In Michigan, the reSpondents were asked if the pro- posed legislation was acceptable; whether or not they would like a service agency without enforcement powers; if they felt some pressure was ever necessary; and would they be for a safety law if they were certain that it would be run right? In addition, all of these interviewees were ranked as to their intensity of beliefs concerning the government‘s in- volvement in accident prevention. Of course the emphasis in Ohio was on past occurrences, whereas Michigan builders were dealing with hypothetical situations involving the future. 217 To begin with, every Single company official in Ohio thought that their present safety legislation was acceptable, and this was not surprising because they all were fgg having safety codes. When the question was posed in a slightly dif— ferent manner, a number of differences became apparent. Their feelings as to the effectiveness of the state program varied as three believed the government was doing a poor job, eleven said that it was fair, and the remaining eleven were of the opinion that the Division of Safety and Hygiene was providing good assistance. Everyone had the opportunity to talk about what he would change in the present set-up if he could do so, and fourteen builders said that they would do nothing differ- ent or they were pretty well satisfied with the way that things were at the present time. Inspections were mentioned six times and everyone wanted more of them, even the person who was already being called upon most often in the state. However, one contractor desired these visits to be conducted. by private insurance companies. There were also two company officials who said that they would like to be able to pur- chase workmen's compensation insurance from private com- panies—-one because he believed that rates would be less expensive and the other for the reason that there would be less malingering allowed by claimants. Although he did not mention private carriers, one owner also believed that claims should be checked much more closely. The remaining two firms had entirely different feelings, as the first 218 person believed that the union ought to have more respon- sibility for safety training and the other thought that the "letter" of the law Should be stressed much less than the "Spirit." Did the average construction executive want to see the state become more or less involved in accident preven- tion? The large majority replied that things should remain as they are at present. Along with the Seventeen who said "stay the same," there were four who wished for "more" gov- ernment participation and control and four who wanted "less.” Of those who said "more," all four would have liked to have a greater number of calls by the Division of Safety and Hy- giene's safety engineer, while the "less" answers had to do with the dissatisfaction with the Bureau of Workmen's Compen- sation and the whole "principle" of government meddling. The three previous "poor" responses connected with the ef- fectiveness of the state program came from two of these builders who said that less should be done on principle. The third thought that enough was not being attempted or accomplished and so there was a need for "more” involvement and control. Going back for a moment, it will be recalled that there were three Michigan contractors who were "for" safety legislation and two others who were not necessarily against it, but they were not for it either. When it came to find— ing out if the proposed legislation was acceptable or not, 219 only one respondent said "yes," as he believed that it was certainly coming. He was the person who thought that the Associated General Contractors should have spent more time helping to draft a good law than just fighting against reg— ulations, and he also felt that a safety code would help the general contractor with his subcontractors. However, even this owner who was the least antagonistic to legislation, did not say that he was "for" it in the beginning--merely that he was not necessarily "against," and that it was not really effective. In other words, as he thought about the subject, he became more convinced that blind reaction was not the answer. The opposite was true for the remaining four firms under discussion. One company president who was for safety laws at first, later changed his mind completely and said he did not see any reason for government involve- ment. The other three men all stated that they did not know or understand about the proposed law, but when it was ex— plained to them, they still did not find it acceptable. There were no doubts with the twenty interviewees who said "no." Did the Michiganders want the government out of the picture completely or would they accept help if there were no restrictions attached to it? About the least involvement possible would be a situation in which there was no law en- forcement, or coercion of any kind, but where the state pro— vided various safety services and research, and nineteen 220 company officials replied affirmatively to this pr0posa1. The other Six were against even this much interference "on principle." When asked if there should not be some sort of pressure exerted in exceptional cases where there were high accident rates and no awareness or concern for even minimum amounts of safety, twelve people said "yes." The other thirteen wanted absolutely no control regardless of the cir- cumstances. The next question was: -”Would you approve of safety legislation if you were certain that it would be run right? There were thirteen yes reSponses and many of these were speaking of a theoretical situation only, as they did not believe that this could actually happen here. Of the remaining twelve replies, one person did not know and eleven answered with a no. Finally, all of the various comments and information was analyzed along with the observations of the interviewer so that a scale could be made and a rating as— signed to everyone in the sample. The degree of belief in the beneficial effects of government involvement and control ranged from one which was pro, to the absolutely negative attitude indicated by the number 5. There was one 1, three 2's, four 3's, eleven 4‘s, and six 5's. In other words, four persons were neutral and did not have strong convictions either way, four contractors had varying amounts of positive feelings, and seventeen others were antagonistic towards the state. 221 To summarize briefly, the information in this last section tends to reinforce what was found to be true in the balance of the chapter. Ohioans do not mind the form of state control that they have while contractors in Michigan want no part-of government intervention. Therefore, any changes contemplated in Michigan should start out by calming the generally unfounded fears that are widespread, and also allow a certain amount of participation by the builders. If they have respect for the people in charge and the correct attitude is shown by inspectors or other officials then there is a chance that legislation can help in the reduction of in- juries. Finally there have been many comments about unions and federal inSpectors that have come from the members of the sample. These may or may not be accurate as they are merely attitudes and Opinions and there was no attempt made to hear the other side of the story. CHAPTER VII SUMMARY AND CONCLUSIONS There had been a great deal of agitation for a con- siderable period of time in Michigan for the passage of con- struction safety legislation. To the average person there did not seem to be any real problem involved as most states already had these types of laws. Furthermore, the neighbor- ing state of Ohio had more government control than most places and their injury rates and workmen's compensation costs looked to be very low. Michigan contractors and the organizations representing them, however, did not want any restrictions, and they claimed that the injury rates in Michigan were among the lowest in the country. There was no way of being absolutely certain from the facts at hand in preliminary investigation, but it seemed as though the situation in Ohio was actually best for everyone concerned. Therefore, the research was undertaken to try to clarify the various positions and to provide impartial information. The hypotheses in Chapter I were stated in part to Show what was thought to be most probably true. It was be- lieved that Ohio‘s frequency and severity rates were lower, that the contractors in that state paid less for casualty insurance, were given more assistance in safety, understood 222 223 and took greater precautions in accident prevention, and were much less antagonistic toward safety regulations. How- ever, the answers to the five main questions indicate that most of these assumptions were incorrect. A brief summary of the findings is as follows: 1. What are the frequency rates of construction firms in Ohio and Michigan? There is a general laxity in the recording and reporting of disabling injury statistics, and the cor- rectness of the published rates is highly doubtful. The differences in the two states were negligible. The average frequency rates of all of the firms in the sam- ple were around 40.00 for the years studied. This was a minimum figure, as many lost-time cases of less than a week's duration were not identified as such. Depend- ing upon the actual ratio of indemnity to nonindemnity lost-time injuries, the real rate for the whole construc- tion industry could easily be as high as 80.00. Finally, these-statistics are not taken too seriously, and there is much confusion and misunderstanding among contractors as to their proper use and true worth. That a frequency rate of 40.00 to 80.00 represents a tremendous waste can be easily appreciated when it is noted that the fre— quency rates as reported nationally by the National Safety Council show an "all industry" average of 19.92, with such other naturally hazardous industries as steel, 224 automotive, chemical, and machinery having frequency rates of 3.37, 1.73, 3.31, and 3.65 respectively. What are the comparative costs of workmen's compensation casualty insurance? DeSpite monopoly, great size, reported low overhead, and other advantages, the workmen’s compensation costs in Ohio are definitely higher than those in Michigan. When the reputedly large differences in the overhead or expense of administering the two programs are con— sidered, the results are amazing. The average premium per $100 of payroll for a three year period was $2.07 in Ohio and $1.84 in Michigan. The latter state had an average expense of thirty-seven cents less in 1960, twenty-two cents less in 1961, and only ten cents less in 1962. Therefore, even though the overhead varies from 4 per cent in Ohio to over 40 per cent in Michigan, the private insurance companies are still charging a smaller amount. However, the gap is narrowing because of the steadily rising costs in Michigan due to large settlements and claims being awarded by the courts. The actuaries in Ohio feel that there is a great deal of malingering and abuses in the state program, which ac- counts for the high costs. It may also be true that. the state fund is not run as efficiently, regardless of its claims, and workers receive higher benefit payments. HEven though the Bureau of Workmen's Compensation does 225 not have to make profits, does not have selling expenses, has large economies of scale in administration because of less duplication of effort, provides fewer services, and does not have competitive pressures, it still charges a higher premium. It seems that the three pre- viously mentioned factors all contribute to this situa- tion, and it can definitely be stated that the impres- sion given of a cheaper and much better program in Ohio is entirely invalid. How much assistance is being received and what is the amount of influence being exerted toward accident pre— vention and from what sources? The only evidence of greater assistance and influ- ence in Ohio is in the area of inSpections. Everyone in the sample was visited at least four times a year, while there were nine Michigan firms that did not fit into this category. However, some of the motivating force behind these activities in Ohio comes from the presence of safety legislation. The service aspects dis- appear to some extent as a result. In addition, house builders and other small contractors are not called on by representatives from the Division of Safety and Hy— giene. Officials of the state Spoke in glowing terms about all of the help that was given in the form of education, training, and other safety services. While this may be true for other industries in Ohio, it 226 certainly was not for the contractors included in the study. The Michigan firms were ahead in this respect. The main difference in the two states was that some small Michigan companies were hardly being reached at all, but most of the others were assisted much more than their counterparts in Ohio. The greatest sources of aid were the underwriters and trade associations in both places, and the least influence seemed to come from safety organizations. Once again the impressions re- ceived from Ohio propagandists proved to be incorrect. How much interest in and understanding of safety is there by management in the two states, along with the employment of accepted safety practices and the removal and guarding of hazardous conditions? Michigan contractors have a greater interest in and understanding of safety, and they do more to prevent in- juries. When one point was given for each of a number of safety activities and precautions, they received a total of 287 to only 201 for Ohio companies. Both the most and the least safety conscious firms were in Mich- igan, as the only perfect score, and the builder that did nothing at all, came from that state. Michigan own- ers were more concerned about safety, and they also re- alized that they had a problem in this area. These things were probably closely connected to the pressure for the passage of safety legislation. On the other 227 hand, Ohio contractors thought that they were doing well in accident prevention and generally seemed to be less anxious and insecure about the subject. It is interest- ing to realize that these people freely admitted that they were not doing certain things which were required by the law. This is one more indication that the safety code was not taken very seriously or enforced to any great extent. What are the feelings toward safety legislation? Have contractors felt harassed because of it, and have these regulations interfered with productive operations? All Ohio reSpondents were in favor of safety legis— lation. Twenty-two of them thought that it was effec- tive in reducing the number of injuries, and twenty-four said that it had never interfered with output. There had never been any evidence of real harassment taking place, and the large majority of firms were satisfied with the existing situation. To put it simply, almost the complete opposite was found to be true in Michigan. Although there had been relatively little harassment in the past, most people were fearful that it would take place in the future. There was only one Michigan con- tractor who had a favorable attitude toward government involvement in accident prevention, and he was merely being realistic as he believed that it was only a matter of time until there would be a safety code. 228 AS a general and overall conclusion based on the observations of the construction industry in the two states, and in order to place all of the information in the prOper . perspective, it should be stated that the differences in safety are not very great. While many of the statistics in the previous chapters have shown wide ranges, they have indi- cated relatively minor differences in terms of averages. There is really not much actual accident prevention to speak of in the whole construction industry in either place. For example, fourteen firms said that they had safety programs, but compared to what is going on in other industries, there was actually not one of these companies that could be said to have a real safety program. This is the opinion of the writer as opposed to those expressed by the contractors themselves, which have been recorded in the study. One place of great difference between Ohio and Michigan firms was in the attitudes and feelings toward safety legislation. Here the real differences were even greater than the statis— tics indicate, if that is possible. Michigan builders were fearful of the unknown, and they were fighting legislation, which probably colored a great deal of their thoughts and responses. On the other hand, Ohio owners were well satis- fied with their situation, and did not Show any evidence of the anxiety that the Michigan people feared. 229 Recommendations ._'\ Many of the recommendations noted here should apply generally to safety in the construction industry in any area even though they are primarily directed toward the problems in Michigan. One exception is the following specific suggestion for the Ohio program. They seem to have established a dilemma, for on the one hand the low published frequency and severity rates tell contractors that they are the best in the country, and on the other hand they are trying to get them to be safety conscious. While Ohio officials may be- lieve that they are silencing criticism and putting on a good face before the nation, they are in effect defeating their own purposes. How can they enforce the regulations and get people to take the necessary precautions when they are at the same time telling them that they do not really need to? 'Contractors do not have accurate information, and the accompanying complacency stops the progress that is vitally needed. The writer feels that dedicated state personnel must feel uneasy about what they are being asked to do. It would be wise to reverse the present procedure and figure individual company injury rates instead of pub- lishing the irrelevant statistics that they do now. Of ' course, before this can occur safety has to be given a higher priority relative to politics. 230 The evidence in the study indicates that the mere passage of a law in Michigan will not solve the problem of high accident rates in the construction industry all by it- self. Injuries are not occurring because management is do- ing something wrong, but because the necessary precautions are not being taken. These two things are not exactly the same; Just what is a safety code expected to do, make owners take a positive approach toward accident prevention? How much government control and enforcement will there be? Certainly, enacting legislation, then believing that the major job has been done, and relaxing or forgetting about the difficulty, will not do anyone any real good. This is a complicated matter and many questions have to be answered. How much money should be Spent? Where will it come from? What penalties or punishments should be inflicted for viola— tions? Changing the habits and activities of a large and important industry is exceedingly difficult even if there is a clear picture of what has to be done and how. Who can say that even the strictest enforcement will lower injury rates? This research has found that despite the comprehensive reg- ulations in Ohio, the hazardous conditions still abound. . There can be no doubt that if frequency and severity rates are to be reduced there must be management interest and participation. Just letting the state handle and be reSponsible for safety will not work. It is hoped that a law would change contractor's activities in the right 231 direction, but caution must be taken as merely making these peOple antagonistic would not accomplish anything of value. At this time there is more concern over accident prevention in Michigan than in Ohio, and this interest Should not be destroyed. .Builders do not want to see workers hurt and they are not criminals. They need to be helped and persuaded in the right direction. One additional factor that Should be kept in mind is that safety is also a result of improved technology. Early industrialists were not intent on killing their employees, but because their machinery and technology was so crude, accidents were inevitable. This may be one price of progress. Construction is not only extremely hazardous, it is also one of the most technically retarded of all of our major indus—x tries. .Development of new building methods and increased efficiency should also result in fewer injuries. The same reasoning applies to retail outlets and restaurants. They have higher frequency rates than automobile or chemical plants probably because of less advanced technology as well as because their managements do not realize that they have a safety problem and consequently, do not carry on safety programs. Certainly, automation and increased mechanization can reduce accidents to an enormous extent for the same amount of overall production, and in construction we still find individuals hammering nails. 232 Actually, what is most needed at the present time is some clear thinking and the pr0per orientation. To begin with, too much of the emphasis in safety is concerned with "how to" reduce the number of injuries, and not enough stress is placed on "wanting to." The motivational aSpects do not receive the serious consideration that they deserve. Too many peOple seem to take it for granted that owners have sufficient desire to lower the number of accidents, and they become absorbed with details about what to do under various circumstances. ,Everyone is "for" safety, but most do not give enough attention to it. There is not the necessary con- viction that is needed for any real progress to take place. It will only become possible to lower injury rates if the industry "wants to" enough to give it serious effort. Then the "how to" aspects can follow naturally with some chance of success. There are basically two approaches which can be taken in order to make businessmen-want to improve in the area of accident prevention. The first might well be called the "good business" method of motivation. If reducing the rate of disabling injuries costs less than the expenses as- sociated with the occurrence of accidents, then injuries can be economically controlled. Those people who Spend money and take the proper precautions will benefit financially. It only remains to prove whether or not this is so by scien- tific and extensive cost studies patterned after the Simonds 233 method. -Exhortations and examples of what happened in one company, or other industries, or what experts believe is not enough. If it can be shown beyond any doubt that safety pays, then the only problem that remains is one of education, as everyone stands to gain in this type of situation. .However, because of the particular nature of this industry, it may very well be that hazards can only be really controlled at overwhelming expense. In other words, a great deal of money may be Spent without eventual financial re— wards that are at all commensurate with costs. If so, there is only one other basic approach that can be taken, and this involves various kinds of pressure from different sources. Safety legislation, poor public relations, union agitation, and the results of low employee morale fall into this second broad category. The primary motivating force would then be social or political and perhaps indirectly economic. The procedures to ensure compliance would be entirely different. At this time no one seems absolutely certain about what Should be done. Should contractors be threatened, or sold on safety? '15 accident prevention for or against the employ- ers best financial interest? Can builders be motivated to— ward accident prevention if their competitors, who are not safety minded, are able to underbid them on jobs and profit thereby? How can any real progress take place until it is understood how to attack the problem? 234 Regardless of what method of increasing accident pre- vention practices turns out to be the best, there still has to be interest in and concern for rates, costs, and research. How can anyone know what measures are effective, or what is going on unless accurate frequency and severity rates are kept? There cannot be any progress if improvement is meas- ured by guesswork. The same thing is also true for any pro- posals or suggestions that are not based on facts. Safety will have to suffer if rates are not properly determined, regardless of what else is done or tried, as fast talk will then be able to take the place of action. A program cannot go forward very far in the dark or with banners that contain old wivebé tales, for slogans and suggestions without scien- tific backing are eventually disregarded. Reliance cannot be put in irregularly kept records as the research has shown that they are a farce and worse than useless. It becomes possible to ”cut" injuries by lying or by conveniently forgetting accidents. For example, the supposedly most safety conscious firm in Michigan-~the only one in the study with a perfect score of 23 points--had re- ported five lost-time cases to the Associated General Con- tractors for the calendar year of 1961; but the Workmen's Compensation Rating Bureau had records showing that they had ten indemnity cases for that same period. The actual number of disabling injuries could easily have been twenty, thirty, or even more. What is needed is some automatic procedure 235 whereby all lost-time cases are recorded. This may involve changing the workmen's compensation forms and/or system to some extent. If this is not feasible, then just indemnity cases could be used to figure the rates. There is no ab- solute necessity to follow the American Standards Association 216.1 method as it has been widely abused anyway. What is important is that everyone in the state adopt the same pro- cedure so that comparisons can be made. It may possibly be that the easiest thing would be to count only the indemnity cases, as this is what most people seem to be doing at the present time. However, any system should clearly indicate what is being measured, and allow no possibility of cheating. One of the advantages that Ohio has over Michigan is concerned with motivation in the area of costs. Contractors know how much they are paying per hundred dollars of payroll and can clearly see this change from year to year. This pro- vides an incentive to be safety conscious in the same way that the out-of-pocket penalty does when an injury occurs because of the violation of the code. In Michigan, the cost structure is so complicated that the average builder does not even try to figure out his expense in relation to volume and output. In both places, there is not the realization of how expensive uninsured costs are and many people do not even seem to know that they exist. -Studies in this area should provide increased motivation and understanding. Of course, the ultimate effectiveness of this would depend on the 236 relation between costs of accidents and cost of prevention. While some contractors have claimed that they are doing everything possible regardless of the outlay, it should help to improve the precautions taken if it is found that safety and good business are not incompatible. ,It has been clearly established in many industries that."safety is good business." It must be kept in mind that an accident prevention program costs money. Even good housekeeping may be an extra expense as management may have to use additional labor for this. However, a clean and uncluttered workplace may increase the efficiency of operations as well as reduce the number of in- juries. Just having the workers wear hard hats and things of like nature do not go far toward solving the problem of high rates. Hazards must be guarded or controlled in some manner, and because of the continually changing nature of a construc- tition Site, the costs of doing this must necessarily be very large. It may prove true that for unsafe conditions to be -neutralized to the extent that they are in some other indus— tries, exorbitant expenditures would have to be entailed. If this is the case, then construction will have higher than average frequency and severity statistics regardless of whether or not there is safety legislation or anything else of the kind. However, there will still be areas where im- provements can be made, and cost studies could conceivably Show the point of diminishing returns. They should also 237 indicate which areas provide the greatest returns in the form of lower costs and rates with any given expenses. These things could be concentrated on first. In other words, this whole difficulty is much like the situation on the highways. Accidents would be drasti- cally reduced if the speed limit were fifteen miles an hour, but we as a society are not willing to pay the price in added inconvenience in order to cut the number of injuries. Any large increase in building costs without eventual return would of necessity be passed on to the consumer, and we may not be ready yet to accept this. Nevertheless, even though costs may mitigate against safety in this industry in an 1 overall sense, studies would doubtless show some areas where it would be highly profitable to take precautions. There could be no excuse for not taking such steps at least. A continuing program of scientific investigation should be a part of any plan for the future. This is how progress is made in other areas of our economy in this en— lightened age, and the only way that anything can be really accomplished in construction safety. If management "wants to" reduce the number of injuries, then this is the manner in which the "how to" aspects can be best learned and passed on. At the present time there is emphasis placed on regula— tions, penalties, assistance, carelessness, enlightened self interest and all sorts of other things, but research is rare— ly mentioned in relation to accident prevention in the build— ing industry. The three E's are talked about the most: 238 education, engineering, and enforcement. Educate who? It usually is the other fellow who needs this. Engineering-— they are notoriously not safety conscious. Actually what this statement implies is that money be spent to do away with unsafe conditions, and there is really very little pres- sure for this. Enforce what? Anything that someone talks loudly enough about? These things can only have meaning if they are tied in with research so that the right things are taught and enforced. There needs to be proof in back of any proposals and not a lot of slogans that sound good but con- vince no one. In other words, research of one type or another is the key to all of the recommendations in this chapter, and regardless of what approach is eventually found to be most effective in promoting increased safety, studies involving rates, costs, and methods will still be needed. More Specifically, should there be a safety code con- taining various provisions and regulations in Michigan? On balance, this would probably be best, but a great deal de- pends upon the spirit in which this is presented to the in- dustry. It will take a long time for anyone to have all of the answers, so at first a code could be considered as a _general guide only. Threats and punishment should not be major factors in a state program. Therefore, management should be interested in any assistance eSpecially if unrea— soning and harsh restrictions are absent, and there are no political overtones. 239 All possible participation and company involvement must be striven for in the hope that there will be increased attention and motivation as a result. If a restrictive pol- icy is taken, then there are limitations that other states have already leaned about to their dismay. How often will inSpections take place and cannot a shrewd operator give untold reasons why he is or is not doing certain things? There cannot be a constant watch on all firms. If a con- tractor is not interested he can find many ways to cut cor- ners and take chances. What has to be emphasized in the beginning is that companies are Securing a service. ‘Rather than their having an inspector call on them, they are ob- taining the help of a Specialist in accident prevention. In other~words, it seems to this investigator that the construction industry does not need policemen at this point, but rather people who can help them with the problem. Old, retired carpenters and union men following a set of rules, just will not do. It is extremely important to have well qualified personnel who are highly trained in the area and who can develop new methods and ideas. This is no place to economize, for if the state representative is inadequate or improperly oriented, the best program will be doomed to failure. The average builder's only contact with the state plan is through the safety specialist and everything comes together in his hands. He passes on information concerning the best way of doing things, persuades the owner to try 240 various safety precautions, gives cost data, figures fre- quency and severity rates, and gathers research material. . He is a teacher or expert and should not be called or even considered to be an inSpector in the usual sense of the word. If there is not a system of education and coordination of this type, how can progress be made? Expecting businessmen to learn by reading a set of regulations is unrealistic and will solve nothing. The first thing is to do away with the secrecy sur- rounding accident rates and figure the frequency and sever- ity for gxg£y company. Insurance firms can supply the pay- roll from which the hours worked may be estimated, and the lost-time cases could be obtained from the Workmen's Com— pensation Department. At last everyone would know exactly where they stood and how Serious their difficulties were. What is important is that there be fewer injuries and not mechanical observation of Specific regulations. If everyone were to learn how serious the problem really is by knowing the actual rates of disabling injuries, a great deal of motivation and incentive would be automat- ically provided. However, this cannot be accomplished with voluntary plans. Michigan has the opportunity to succeed where Ohio failed. It is true that systematic collection and determination of injuries would probably make Michigan's rates look comparatively high, but without this, the ability to "reduce" rates by not recording injuries would handicap 241 any type Of program. Michigan has the Opportunity to be a real leader in safety and to help the entire construction industry of the nation by its example, and by what it learns. Some plan whereby all companies would be given a safety rating depending upon their frequency and severity could be put into effect if stronger means of persuasion were necessary. The result would be that the onus of re- sponsibility or blame would not be on the government's shoulders. If a firm is unsafe because of its own doing, then employees, customers, stockholders, competitors, and the general public among others Should know about it. ~Any- one entering into a relationship of one kind or another with this contractor would be able to take his safety record into consideration whenever necessary. If this affected his com- petitive Situation, then he might try to take greater pre— cautions. On the other hand, the builder who goes out of his way to consider the welfare of others by guarding them against hazardous conditions, ought to have a low accident rate; and this Should be known by all so that he may receive the acclaim and benefits that he deserves. The modern trend is for those people having reSpon- sibility to be able also to judge their own performance from accepted standards and not depend on others to tell them how they are doing. This type of System substitutes internal pressure and motivation for outside control. If a contrac- tor has a high accident rate and is aware of what it is, he 242 can push himself to improve rather than have the state rep- resentative issue veiled threats. Furthermore, it may be a good idea to have provisions for out-of-pocket cost penal- ties when injury rates climb over a certain Specified point. This could be patterned somewhat after the Ohio plan. The percentage of the penalty would depend upon how high above the Specified points the rates were and for how many years this situation persisted. In other words, if a contractor had an unsafe job and he violated accepted standards with the result that someone was injured, he would have to pay a penalty equal to somewhere between 15 to 50 per cent of his workmen's compensation premium only if his frequency and severity rates were in the top 10 per cent of the industries accident experience. The main point here is that if some- thing of this type were in effect, the builder would be interested in knowing his rates and following their progress. In addition, he would look at safety Specialists as a source of aid in attacking the problem and not as policemen. Of course, any direct action of this type should come only after there is more knowledge in the area. That is why any new Michigan Safety Commission must start out with the intention of learning. The safety specialist who calls on the construction site has a wonderful opportunity to gather all types of invaluable information. _He can observe what is being done in safety, note the management‘s attitudes, re- cord the type of construction that is done, the volume of 243 employment, the size Of the company, and all other signif- icant factors and correlate these things with frequency and severity rates. For example, he would be able to see what difference the wearing of helmets made and also judge how successful other preventive practices were. Cost studies, research, and the dissemination of knowledge would be his primary concerns. If builders did not follow his sugges- tions it would be to their disadvantage. He is like the safety man who has a staff position in a large corporation and reports to the president or other major executive. He does not need to have any authority in the usual sense, but he does have to be an expert and be able to persuade, sell, and educate. Therefore, a safety code would serve a useful pur- pose if it was continually revised and explained, regardless of whether or not there was any need for pressure. It would act as a guide, with Special separate cost penalties only if they were necessary. These things along with a program Of continual research on the most effective ways to reduce the number of injuries at the least cost with proven results, should be one of the most fruitful methods of handling the problem Of the exceedingly high rate of injuries in the con- struction industry. BIBLIOGRAPHY Public Documents Bureau of Labor Standards. Safety Subjects. Bulletin No. 67. Washington, D. C.: United States Department of Labor, Revised 1956. Bureau Of Labor Standards. Safety Standards. Washington, D. C.: United States Department of Labor, 1951 (Bi- monthly). Michigan. Public Act NO. 89, 1963. Michigan. Public Act No. 285, 1909. Michigan. ,Public Act No. 163, 1962. Michigan, Department of Labor. Annual Report, 1959-1963. Michigan, Department of Labor. .Labor Laws. Lansing, 1953. Michigan, Workmen's Compensation Department. Workmen's Compensation Act and Rules of Practice, August 1, 1956. Ohio. Constitution, 1924. Ohio. The Workmen's Compensation Law of Ohio, 1912. 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