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In the time of COVID, what’s a life worth?

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The following story was published in 2011. I was writing another story on safety and this question came up: How do we value,  from an actuarial point of view, a human life? As our government wrestles with reengaging our economy against the risk of encouraging increase deaths due to COVID, it’s a question we’ll all be asking—and trying to answer—again. 

In December of 2010, the Expert Advisory on Occupational Health and Safety in Ontario released a report to the Ontario Ministry of Labour. (You can download the report at www.labour.gov.on.ca ) The report was requested on behalf of the Government of Ontario after four men died on Christmas Eve, 2009 when the scaffold they were working from collapsed.

It is the nature of such reports that their recommendations require money. The challenge of opposing such expensive recommendations is that safety is such a motherhood issue. Arguing against increasing the cost of safety means facing the contempt of those who indignantly suggest that only an evil, black heart would “put a price on human life.”

Fact is, putting a price on human life is done all the time and is a necessary part of deciding, for instance, how to fund an army, parcel out humanitarian aid or decide how much life insurance to take out. (Go to www.lifehappens.org to find out how much your life is worth from an actuarial point of view. According to the website, my life is worth $210,305)

For example, the Environmental Protection Agency (EPA) in the U.S. is called upon to make decisions regarding environmental regulation to protect the safety of Americans. But it also has a budget, so it regularly determines the value of human life in order to identify which policies make the most sense. In 2008, it was much chided for reducing the value of a human life from $7.8 million to $6.9 million.

The implications of that choice are well described in an article written in the Huffington Post at the time: “Consider, for example, a hypothetical regulation that costs $18 billion to enforce but will prevent 2,500 deaths. At $7.8 million per person (the old figure), the lifesaving benefits outweigh the costs. But at $6.9 million per person, the rule costs more than the lives it saves, so it may not be adopted.”

It is true that safety increases return on investment (ROI) to a company. But there comes a point when the incremental cost involved in saving one more life becomes so expensive that there is no reasonable expectation that a company conducting inherently risky tasks could afford to stay in business at all.

And realize too, that when we put an economic price on life we can avoid investing in inefficient ways to protect life in favour of ways that are efficient. In that respect, putting a price on life is actually life saving.

In this industry, in order to keep our government lean and out of our hair, we must know the price that it puts on life so we can decide where the government’s responsibility for safety ends and yours begins. Yes, we need safety regulation, but we don’t need to stifle business growth, create roadblocks to progress, inflate the cost of renovations and give the underground one more reason to flourish. This report’s recommendations will likely do that.

We can’t let the line where government involves itself in safety to creep relentlessly forward as this report—and every public tragedy—will do. We also don’t want anyone to get hurt. To meet these two goals, the private sector (you) must do two things; First, it must demand that the government be candid and public about how it evaluates the cost of a human life (It is being done somewhere in the halls of power, but nobody wants to talk about it.) and require that is uses rigorous tests, not emotional blackmail, to decide how it makes decisions on safety programs.

The second is that each of us must make safety culture the highest priority on our job sites. To the credit of the report, it mentions the need for safety culture, and encourages training to inculcate it into our industry. But safety culture comes from the heart, not training, and my appeal here, to push back against more government regulation, is not to wait for the training, or the safety inspector or anyone else to get safety into the culture of your company. Do it yourself, at zero cost, now. Tell your guys there are no heroes on your sites—no macho men. Give them the right tool for the right job. Use your gut to smell danger and have the guts to stop everything if that’s what it will take to avoid it. You know the list. You know the decisions you need to make. Make them. Don’t wait or the government will make they for you and make you pay for the privilege.

Do you want to take your business to the Next Level?