Concerns about tariffs are growing, and they are affecting more than just the prices of goods. Businesses are feeling the pressure on their supply chains, and this is impacting how they manage their workforce. As tariffs rise, companies face higher costs, which can lead to changes in labor practices and increased risks for workers.
For many large businesses in the U.S., tariffs create a chain reaction. Higher import taxes on medical equipment and pharmaceuticals can drive up the costs of treating workplace injuries. This, in turn, affects workers’ compensation claims. Employers may find themselves in a tough spot where they need to ask their workers to put in longer hours or take on unfamiliar tasks. This can increase the chances of accidents occurring on the job.
Jeff Cole, an executive at Sentry Insurance, highlighted that many U.S. company leaders are worried about supply chain issues, economic uncertainty, and inflation. In a recent survey, nearly half of the executives listed supply chain problems as their biggest concern. Cole noted that these issues are interconnected and that the disruptions caused by tariffs come on the heels of the supply chain challenges faced during the COVID-19 pandemic.
As companies deal with fewer employees taking on more work, the risk of injury grows. Replacing injured workers becomes more difficult in a tight labor market. This situation pushes employers to invest more in safety measures and rethink their insurance strategies. Cole pointed out that while some businesses are struggling, they are still prioritizing workplace safety. In fact, a staggering 99% of companies surveyed plan to increase their spending on safety this year.
Interestingly, even though the number of workplace injury claims has been declining, the cost of each claim is on the rise. Medical inflation, driven by healthcare staffing shortages and increasing drug prices, is a significant factor in this trend. The cost of individual prescriptions has also risen, adding to the financial burden on employers.
To help manage these rising costs, experts recommend that businesses take proactive steps. They should work with pharmacy benefit managers to find cost-effective alternatives for medications, invest in safety protocols, and keep an eye on tariff and trade policy changes that could disrupt their operations.
The impact of tariffs on workers’ compensation remains to be fully understood. However, early signs indicate that fewer workers are facing more pressure, new job risks are emerging, and medical costs per claim are increasing. As economic uncertainty looms, many companies are bracing for the challenges ahead, with some even planning to reduce their workforce.
In summary, the interplay between tariffs and labor practices is creating a challenging environment for businesses and their employees. As companies adapt to these changes, the focus on safety and cost management will be more critical than ever.