How much is a human life worth?

An analysis of the ‘value of a statistical life’

EPA explanation
    The EPA (search <Mortality Risk Evaluation>) explains the VSL as follows: “Suppose each person in a sample of 100,000 people were asked how much he or she would be willing to pay for a reduction in their individual risk of dying of 1 in 100,000, or 0.001%, over the next year. Since this reduction in risk would mean that we would expect one fewer death among the sample of 100,000 people over the next year on average, this is sometimes described as ‘one statistical life saved.’ Now suppose that the average response to this hypothetical question was $100. Then the total dollar amount that the group would be willing to pay to save one statistical life in a year would be $100 per person X 100,000 people, or $10 million.”
    VSLs have the potential to demonstrate huge savings offered by a safety regulation. For example, a VSL used during cost-benefit analysis for Cal/OSHA’s proposed changes to its lead standard (if in place from 2020-2040) showed a net financial benefit to the state at approximately $3.8 billion dollars unadjusted by inflation. The end savings occur primarily by reducing mortality among lead workers through stricter lead controls. Cost of compliance for the Cal/OSHA regulation, however, exceed benefits during the first seven years that softened enthusiasm for the regulation. Be aware that federal OSHA’s proposed revision to its lead standard, expected later this year, will include a similar VSL cost-benefit analysis that includes the entire U.S. population of lead workers.

Changes ahead
    On March 24, 2023, the Consumer Product Safety Commission issued the document: “Notice of Availability: Proposed Draft Guidance for Estimating Value per Statistical Life.” The CPSC document includes Tables 1 and 2.

    Table 2 is a monumental change. A constant among all U.S. government agencies during the past 40+ years, and particularly to conform with the U.S.’s Office of Management and Budget 2003 Circular A-4, is that VSL cost-benefit analyzes are not adjusted for age.

    When the CPSC proposed a new method of VSL cost-benefit calculations, it appeared that the commission went against OMB 2003 Circular A-4 guidance. The CPSC, however, was likely aware of the upcoming proposed change to OMB Circular A-4, that occurred on April 6, 2023. OMB Circular A-4 update now encourages “Valuation of Reductions in Health and Safety Risks to Children.” The CPSC’s recent regulations on Safety Standard for Magnets, Safety Standard for Operating Cords on Custom Window Covering, and Safety Standard for Clothing Storage Units would likely have contained stricter controls if the proposed VSL at $23.2 million for a child were used for these regulations.
    The CPSC wasted no time getting the ball rolling to use an updated VSL for future regulations. CPSC’s urgency suggests that the EPA, DOT and HHS may quickly follow with separate VSL calculations for adults and children.

Desperate for workers
    Changes in adult/child VSL cost-benefit calculations arrives at a time when U.S. workplace laws are rapidly changing to expand the activities and time that children under 18 years of age may work. New Jersey and New Hampshire enacted laws in 2022 that favored child workers. Midway through 2023 has already seen Arkansas, Iowa, Minnesota, Missouri, Nebraska, Ohio, and South Dakota enact or introduce laws that will increase the number of child workers.
    Many of the above enacted and proposed laws greatly increase workplace fatality risk for children. Iowa law (SF 167), for example, will allow 14-year-olds to work in meat coolers and industrial laundries. Fourteen- and one-half year-olds (14.5) could drive themselves up to 50 miles to and from work between 5:00 a.m. and 10:00 p.m. Fifteen-year-olds could work on assembly lines. Minnesota law (HF 375) would allow 16-year-olds to work on construction sites. For more information on this topic see Economic Policy Institute report <epi.org/263680>.
    Other laws, such as the 2023 enacted federal PWFA and PUMP Act, change the notion of when “children” are directly impacted by workplace conditions and practices.

Best practice advice
    Every employer and OHS pro should have a defensible opinion of what a human life is worth. The opinion may be formed by state workers’ compensation survivor benefit payments, life insurance payouts, National Safety Council Injury Facts (2021 estimated cost per death at $1.34 million), or some other defensible source.
    The VSL used by various U.S. state and federal agencies is a powerful tool used during cost-benefit regulatory analysis. The VSL used by government agencies may be modified by OHS pros for use at the workplace for purposes such as defending budget requests that help prevent a workplace fatality. Information is quickly trending that by scientific principles the statistical life of a child in the U.S. is worth in monetary terms twice as much as the statistical life of an adult. The challenge for OHS pros is to reconcile this position i.e., ethics debate when requesting budget for controls that are necessary to prevent injury or illness between an adult and child worker.
    Be aware that different VSLs for an adult and child will be picked up by activist and advocate sources, such as the legal community, to establish arguments such as monetary awards demand during wrongful death charges and similar conditions.
    OHS pros should be alert to VSL updates and proposed changes to state laws that will increase the number of child workers. OHS pros should submit comments during the public comment period for these updates and laws, particularly when proposed changes may directly impact their workplace.