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Economic Consequences of Mining Injuries 

By: 

T. Camm and J. Girard-Dwyer1 

1

National Institute for Occupational Safety and Health, Spokane Research Laboratory, 

315 E. Montgomery Ave., Spokane, WA 99207 
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ABSTRACT 

 Direct costs such as medical, legal, administrative, and 

worker’s compensation costs, property damage, lost 

earnings, and lost benefits are typically used to compute the 

economic impacts of occupational injuries. However, there 

are also a number of less obvious, indirect costs that 

substantially contribute to the overall loss costs. In fact, for 

every $1 of direct costs an estimated $3 to $5 of indirect 

costs are also incurred. 

 This paper presents a systems approach that incorporates 

engineering, economics, psychology, and sociology in order 

to evaluate the total value of investments in safety. By 

studying the interrelated system comprised of the injured 

worker, their family and coworkers, as well as the 

organizational structure that was the setting for the incident, 

a methodology can be developed that will more accurately 

capture the true costs of mine injuries. 

INTRODUCTION

 From 1980-1995, mining had the highest fatal 

occupational injury rate recorded in the National Traumatic 

Occupational Fatalities Surveillance System (NTOF), with a 

rate of 30.3 fatalities per 100,000 workers. This is 50% 

higher than the next highest industry division—agriculture, 

forestry, and fishing—with a rate of 20.1 per 100,000 

workers, and double the fatality rate for the third highest 

industry, construction, with a rate of 15.3 per 100,000 

workers (NIOSH, 2000). 

 The purpose of the National Institute for Occupational 

Safety and Health (NIOSH) is to deliver on the promise of 

occupational safety and health for all workers through 

research and prevention. The NIOSH Spokane Research 

Laboratory (SRL) is specifically tasked with performing 

research related to mine safety and health. This paper 

outlines a systems approach research methodology related to 

an on-going NIOSH project that seeks to identify the costs 

and associated consequences of workplace injury and 

fatality in the workplace and to identify the complex 

dynamics involved in workplace accidents. This 

information will be useful in designing safer work practices, 

developing focused training in the consequences of risky 

behavior, and providing estimates of the economic 

incentives of safer workplaces. 

SYSTEMS THEORY IN SAFETY RESEARCH 

 Systems and systems thinking are terms used frequently by 

many disciplines. While common sense dictates that the 

entire sequence of events leading up to an occupational 

injury must be examined when trying to determine the 

causes and ultimate effects of a particular injury, formal 

scientific systems approaches are a relatively new means of 

examining the problem. 

General Systems Theory
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 The root meaning of the word system is derived from the 

Greek word syshistanai, which literally means “to place 

together.” A system can be thought of as “an integrated 

whole whose essential properties arise from the 

relationships between its parts,” and systems thinking, “the 

understanding of a phenomenon within the context of a 

larger whole” (Capra, 1996). Understanding things 

systematically means putting them into context to establish 

the nature of their relationships. 

One of the first people credited with the establishment of 

systems thinking as a major scientific movement was von 

Bertalanffy (Capra, 1996). According to von Bertalanffy 

(1968), systems theory is a general science of “wholeness” 

with an emphasis on mathematics to define principles that 

apply to systems in general. 

 The work done by von Bertalanffy distinguishes between 

closed systems (systems which are considered to be isolated 

from their environment) and open systems. Typical closed 

system approaches are physical chemistry and 

thermodynamics, whereas systems comprised of living 

organisms are considered open. Such open systems 

maintain a continuous inflow and outflow, building up and 

breaking down of components, such that they are never in a 

state of chemical or thermodynamic equilibrium (von 

Bertalanffy, 1968). But, although a living system is never in 

a state of equilibrium, it is constantly seeking a state of 

stability. A system’s stability is continually tested by 

fluctuations which can cause a deviation that can be either 

corrected or magnified by positive or negative feedback. 

Homeostasis is the systems terminology used to describe the 

state of dynamic balance characterized by multiple, 

interdependent fluctuations (Capra, 1982). 

 Another term used to describe the interconnected aspect of 

systems theory is rheomode (rheo from Greek meaning “to 

flow”) (Bohm, 1980). Bohm was a quantum physicist who 

believed the tendency to describe the universe as discrete 

fragments provided an inadequate world view. He used the 

rheomode as a way to describe the universe in essence, as 

everything in an unbroken and undivided whole movement. 

To attempt to describe the universe in individual fragments 

will miss the essence of the connected nature of the 

universe. “Rather, it implies that any describable event, 

object, entity, etc., is an abstraction from an unknown and 

undefinable totality of flowing movement” (Bohm, 1980, p. 

49). Bohm used the image of a flowing stream, an everchanging pattern of waves and ripples which have no 

independent existence apart from the stream. Applying this 

principle to human health, Bohm stresses that the 

fragmented nature of current culture with its emphasis on 

autonomy, has adverse effects. The paradox of human 

nature is that society has a sense that wholeness or integrity 

is necessary to make life worth living, yet most social 

structures emphasize a fragmented existence. The word 

health in English is based on the Anglo-Saxon hale meaning 

whole—to be healthy is to be whole (Bohm, 1980). The 

totality of existence is an unbroken wholeness, an undivided 

flowing movement without borders. 
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 In systems theory, the interactions and relationships 

among parts of a system are as important as their individual 

characteristics in understanding the dynamics of the system. 

This is particularly important when studying human 

behavior within a system. A key characteristic of the 

organization of living organisms is the tendency to form 

multileveled structures of systems within systems, referred 

to as hierarchies. Hierarchies, in this sense, are different 

from the term as it is typically thought of in organizations 

where there may be a clear-cut order of “above and below” 

or of “management and subordinates.” Rather, in naturally 

ordered systems, there are networks within other networks. 

Understanding these complex connections, relationships, 

and context are fundamental to understanding the system. 

Systems Engineering

 Systems engineering is an interdisciplinary approach 

which helps enable the realization of successful systems. It 

focuses on defining customer needs and required 

functionality early in the development cycle, documenting 

requirements, then proceeding with design synthesis and 

system validation while considering the complete problem 

which may include: 

• Operations 

• Performance 

• Testing 

• Manufacturing 

• Costs and scheduling 

• Training and support, and 

• Disposal 

 Systems engineering integrates all the disciplines and 

specialty groups into a team effort forming a structured 

development process that proceeds from concept to 

production to operation. Both the business and technical 

needs are considered all with a goal of providing a quality 

product that meets the customer needs (INCOSE, 1999). 

Bowen Systems Theory

 When applied to the workplace, Bowen’s theory provides 

a framework for describing a safer, more meaningful work 

environment in terms of an individual worker. For example, 

if a worker feels pressure to conform to the demands of a 

group or a boss, the worker may compromise his or her own 

safety to avoid appearing weak or unproductive. This may 

happen even when there is no expectation to perform a work 

function in an unsafe manner and such a perception is held 

by the worker only. 

 The cornerstone of Bowen’s family systems theory is the 

concept of differentiation of self (Goldenberg and 

Goldenberg, 2000). Bowen developed a theoretical scale 

for evaluating a person’s level of self differentiation using 

values from 0 to 100. Complete undifferentiation exists in a 

person who has achieved no emotional separation from the 
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system (i.e. the family or work organization the person is 

in). These individuals may be referred to as “no self” and 

are generally incapable of being an individual in a group. 

This level of functioning would be assigned a scale value of 

zero (Kerr and Bowen, 1988). On the other end of the 

spectrum, someone who has achieved complete 

differentiation has fully resolved the inappropriate (too close 

or too distant) emotional attachment to his or her system 

(i.e. family and/or work relationships) and would be 

arbitrarily assigned a self-differentiation scale value of 100. 

The scale is not intended to be diagnostic or to assign exact 

levels to individuals; rather it can be useful in determining 

general patterns of behavior and to define an individual’s 

ability to adapt to stressful situations. The higher the level 

of differentiation, the more stress required to trigger an 

unhealthy symptom (Kerr and Bowen, 1988). In addition, 

the higher the level of differentiation, the more likely a 

person is to cooperate, to look out for one another’s welfare, 

and to stay in adequate contact during stressful as well as 

calm periods. The theory indicates that a worker with 

higher self-differentiation is more likely to respond in a 

thoughtful manner to an unsafe situation and more likely to 

handle the stress of an injury, fatality, or other stressful 

experience in the workplace in a healthy, constructive 

manner. 

SRL’s SAFETY SYSTEM MODEL 

 The safety system model developed for the on-going SRL 

project includes four main components: 

1. Economics 

2. Social consequences 

3. Engineering, and 

4. Human factors. 

These components provide a model based on viewing the 

safety of a work organization as an overall system. Using 

principles from systems theory and systems engineering, 

this allows evaluation of an injury or fatality from multiple 

perspectives: (1) economics considers direct, indirect, 

productivity, and intangible costs; (2) social consequences 

examines psychosocial effects, stress, anxiety, depression, 

and group conflict; (3) engineering considers the design and 

types of equipment, the work environment, and how they 

interact; and, (4) human factors include work design, 

organizational culture, worker ability, and training. Using 

this four-part systems model allows researchers to focus on 

key areas and interrelationships of the overall safety system 

of a work setting. Two factors of this research model, 

economics and social consequences, are presented below. 

Economics

Costs to the employer: The cost to individuals and industry 

from occupational injury and fatality is enormous. 

According to the National Occupational Research Agenda, 

“the costs of work-related illness and disability (both in 

human and economic terms) justify devoting substantial 

resources to the control of workplace hazards; yet 
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surprisingly little attention had been paid to describing and 

measuring these costs” (NIOSH, 2002). In addition to 

standard losses such as lost wages and health care costs, 

there are numerous direct and indirect costs associated with 

workplace injuries that are often not taken into account 

when assessing the monetary impact of a workplace injury 

or fatality. Leigh et al., (1997) described direct costs as 

including actual dollars spent on medical expenses, health 

care, property damage, police and fire services, and legal 

and administrative expenses for insurance and workers’ 

compensation. While direct costs can be substantial, they 

only represent about 34% of the total costs with indirect 

costs contributing to 66% of the total (Leigh, et al., 1996). 

Indirect costs to employers include costs associated with 

additional hiring and re-training, time delays due to the 

disruption of work processes, and the effects of workplace 

injury, exposure, or fatality on the productivity of coworkers 

who see themselves at heightened risk. However, costs to 

the employer are only part of the total. 

Costs to the injured worker and their family: A workplace 

injury has direct medical, employment and earnings 

consequences for a worker, and these consequences are the 

focus of a growing literature (Leigh, et al., 1997; Miller, 

1997; Miller and Galbraith, 1995; and Viscusi, 1996). 

Indirect costs to workers and their families may include 

reduced income, depletion of savings, and loss of assets 

(which could include automobiles or even homes). 

Oftentimes, indirect costs to a worker and their family will 

also occur in the form of lost fringe benefits and lost home 

production when other members of the household are 

required to quit or cut back on their own work hours to care 

for the injured family member. Additional potential costs to 

workers and their families include professional counseling, 

caregiver services in the home, home modifications and 

equipment related to disability, and deferral or loss of 

education opportunities for family members. 

Costs to the community: The changed economic 

circumstances of the family and possible increased care 

required for the injured worker may also affect the 

economic and social outcomes and behaviors for other 

family members including children. Costs may also be 

absorbed by the community with the increased use of social 

services. While fatalities are the most dramatic and tragic, 

nonfatal injuries may still have devastating impacts on 

families, often with fewer organized sources of support. 

Extending the literature on earnings losses for workers with 

injuries to losses in family income and social consequences 

is an area of increasing interest to occupational economics 

researchers. 

Estimates of actual costs of occupational injuries in the 

industry: Occupational injuries, fatalities, and illnesses can 

be very costly. The International Labor Organization 

estimates these costs to the global economy at $1.25 trillion 

per year based on the calculation that accidents and workrelated illnesses cost some 4 percent of the global gross 

domestic product. Other sources report that the average cost 

of a fatality is $2.57M to $5M (Miller and Galbraith, 1995; 
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Viscusi, 1996), and for each $1 of direct costs, there are 

associated indirect costs of $3-5 (Liberty Mutual, 2003). A 

study of costs of injuries at sand and gravel mines estimated 

the average cost of nonfatal injuries to be $46,400 per 

incident (Camm, 2000: December 1990 dollars; Camm et 

al., 2000). However, the actual costs may be substantially 

higher than what has been presented in the literature to date, 

and costs per incident are expected to increase in the future. 

For example, in March 2003 a jury awarded $163.8M to the 

widow and children of a contractor fatally injured at a mine 

(MSHA, 2003). The Liberty Mutual Research Institute for 

Safety (2003) also reported that the direct costs of the three 

leading causes of work-related injuries (for all industries) 

grew at rates substantially greater than inflation (12% to 

17% higher) and 2.5% overall. 

Social Consequences

 “The American Institute of Stress...estimates that stress 

and the ills it can cause—absenteeism, burnout, mental 

health problems—costs American business more than $300 

billion a year” (Daniels, 2002). 

 Symptoms of stress can be physical, mental, and/or 

behavioral. Mental and behavioral effects include 

depression, anger, and anxiety (Freudenberger, 1998). Forty 

percent of workers reported their job is “very or extremely 

stressful” in a survey by Northwestern National Life 

(NIOSH, 1999). This report went on to report that health 

care expenditures are nearly 50% greater for workers who 

report high levels of stress. Clearly, a comprehensive 

investigation of the costs of injury requires including 

occupational health psychology (Sauter, et al., 1999), along 

with the disciplines of engineering and economics. 

Integrating the social consequences of workplace injuries 

with economic impacts in a systems engineering framework 

provides a rich and comprehensive analysis of the effects of 

workplace injuries. 

 There are also substantial non-economic consequences of 

workplace injuries and illnesses on quality of life. Physical 

and psychological functioning in everyday activities may be 

affected, self-esteem and self-confidence may be reduced, 

and an individual's role in the family and community may 

change. Even less research has been focused on these nonmonetary costs. Studies of unemployed workers and their 

families and of people with chronic illnesses and disabling 

injuries show that income and employment losses, illness, 

and physical impairment can have profound human 

consequences on both workers and their families. Better 

measures of both economic impacts (direct and indirect) and 

non-economic impacts will help improve targeting of 

resources for research, prevention, and compensation 

(NIOSH, 2002). 

SUMMARY 

 Clearly, a comprehensive investigation of the costs of 

injury require including the traditional disciplines of 

engineering and economics, but valuable information can 
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also be gathered by including occupational health 

psychology and sociology in the analysis of overall costs. 

By studying the interrelated system comprised of the injured 

worker, coworkers, family and community, as well as the 

organizational structure that was the setting for the incident, 

a systems methodology can be developed that will more 

accurately capture the true costs of safety. 

 Results of this project will add to the body of knowledge 

on how much occupational injuries truly cost, thereby 

lending measurable economic credence to the value of 

accident prevention. This type of information is valuable 

for safety professionals who must justify safety procedures 

as a bottom line value to the mining company and have no 

methodology to follow in order to correctly capture the true 

costs of safety. A combination of traditional research that 

studies the causes of mine injuries and worker behaviors, 

coupled with systematic economic analyses of occupational 

injuries will provide a framework for prioritization of 

prevention resources and efforts. The findings will also be 

useful in documenting the social consequences of frequently 

occurring injuries to the workers who may not have 

considered the impact of occupational injures beyond their 

own individual concerns to include their co-workers and 

families. Finally, the results will add to the body of 

knowledge concerning methodologies to gather quantitative 

and qualitative data to measure economic and social 

consequences of occupational injuries, and will provide a 

new level of understanding of occupational injuries and 

fatalities that cannot be determined using engineering, 

economic, managerial, sociological, psychological, or other 

disciplines alone. 

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