[Editor's Note: The following is a commentary on a recent study from the New York Civil Justice Institute. The study argues that the New York’s "Scaffold Law" diverts millions of dollars to legal costs and insurance and that the law causes additional workplace injuries.]
New York’s construction contractors and insurance associations have been aggressive in their criticism of the state’s Labor Law 240, popularly known as the “Scaffold Law,” and have been lobbying hard for repeal or amendment.
This law holds builders financially responsible for the safety of their employees, and imposes liability in instances of injury or death on construction sites. Opposing reform, building trades unions and organizations that advocate for non-union construction workers applaud the existing legal framework. They point out that New York’s construction industry safety record is better than the national average, attributable, at least in part, to the Scaffold Law.
In my view, a recently publicized study misuses sophisticated statistical techniques and produces results that are inaccurate. (See “Study Says N.Y. ‘Scaffold Law’ Drives Up Construction Costs, Causes Injuries”) The analysis was conducted by the Rockefeller Institute, a branch of the State University of New York, with a Cornell University professor serving as a consultant.
Regrettably, it appears to me that these researchers misused sophisticated statistical techniques and produced inaccurate results. In my opinion, they erred particularly in the equations that serve as a foundation for the estimate of increased injuries supposedly caused by the Scaffold Law. Even the basic hypothesis may be flawed; it proposes that liability for injuries associated with the law ‘blunts employer incentives to invest in worker safety.’ This is counterintuitive. If employers are financially liable for injury and death, would they not be more likely to invest in safety?
The core of the research compares New York construction injuries and costs to other states over the period 2000-2010. But, it seems to me that in making the statistical comparisons, the authors paid virtually no attention to institutional and demographic factors that impact injury rates. For example, higher union density increases the likelihood that injuries will be reported, stronger laws and enforcement result in more accurate monitoring, more construction at height increases the risk of serious injury, immigrant workers (especially undocumented) are known to refrain from reporting injuries.
Furthermore, there is no consideration of the variable impact of workers compensation laws across the states. Nor is there information regarding whether the liability insurance required under Labor Law 240 is experience rated. The point I would like to make is that the authors of the report never mention most of these factors, and include no controls for any of them in their statistical modelling.
In my view, there also are multiple technical problems with the research. For example, the report overlooks the fact that there was no change in the Scaffold Law during the period studied, but a change would be necessary in order to accurately utilize the differences-in-differences modelling approach they adopt. I also have found what seems to me to be other technical flaws and some imprecision that may simply result from failure to explain data limits.
As a Cornell University economist who specializes in the study of worker organizations and labor law, I am skeptical of the veracity of the study’s conclusions. My personal opinion is that New York should retain the Scaffold Law, not sacrifice safety in the pursuit of profits.