Road Traffic and its effect on economy

[AbrhamT2021]

4 WAYS ROAD CRASHES IMPACT THE ECONOMY​

There’s no question that road crashes have a devastating impact on victims and their families. The world health organization states that road crashes kill 1.25 million people and injure 20 to 50 million people every year. Road crashes also bear a heavy economic cost. According to statistics from the Together for Safer Roads’ Expert Panel White Paper ” crashes come at a cost of USD $518 billion per year to the global economy. The White Paper outlines these eye-opening statistics on the cost of crashes.
1. It’s an international problem.
The cost of road crashes varies in different economies. According to the WHO, crashes amount to approximately 1 percent of the gross domestic product (GDP); in middle-income countries the cost is 1.5 percent of the GDP; and in high-income countries the cost is 2 percent of the GDP. Some studies even cite costs as high as 3 percent of the GDP (1, 2). The TSR White Paper says that the cost of crashes in the developing world often exceeds the amount of payments that those countries receive in financial aid. It also points out that because of poor reporting and lack of a central data system, we don’t know as much as we’d like about the cost of crashes in many less developed countries.
2. The effects are pervasive.
In the United States, motor vehicle crashes cost USD $242 billion per year, according to the TSR report. That breaks down in the following ways:

• 28 percent property damage;
• 25 percent workplace productivity loss;
• 8 percent household productivity loss;
• 39 percent medical costs, traffic congestion, and other costs

3. On-the-job deaths leave a huge void at home and on the job.
In the U.S. alone, road crashes are the number one reason for on-the-job deaths. Annually, 2,100 people die and 353,000 are injured in crashes while working, according to the International Labor Organization. In the U.S., direct costs for a single traffic fatality are approximately USD$1.4 million, according to the NHTSA. A majority of those costs—87 percent—are connected to lost productivity at work and at home.
4. Employers pay a steep price.
The TSR report notes that each traffic death costs employers approximately USD $3.8 million (USD $500,000 in fringe and non-fringe benefits, and USD $3.3 million in wage-risk premiums) and non-fatal injuries cost approximately USD $128,000 (USD$ 76,000 in fringe and non-fringe benefits, and USD $52,000 in wage-risk premiums). Some industries, according to the report, face a larger economic burden when it comes to traffic injuries. Those include agriculture and forestry, land transportation, mining, heavy construction, and automotive sales and repair.
Road crashes have an impact that reverberates through every sector and every country. If businesses work together to help improve road safety, the benefits will spread throughout the economy, with the potential to help a company’s own bottom line.