How Workplace Testing Can Get Us Back to Work

We’re used to thinking of testing as a public health function. But there’s growing support for workplace-based testing for COVID-19 infections as a first step towards getting the economy restarted again.

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by Michael Mandel, Chief Economic Strategist| Progressive Policy Institute

We’re used to thinking of testing as a public health function. But there’s growing support for workplace-based testing for COVID-19 infections as a first step towards getting the economy restarted again. Scott Gottlieb, former head of the FDA, wrote a op-ed for the Wall Street Journal where he argued that

As employees return to work, perhaps as early as May, employers can offer screening at their place of business. Rapid diagnosis and containment will be a critical part of limiting spread.

An essay by Rajaie Batniji, co-founder and chief health officer at Collective Health, a health benefits company, makes the same point. Indeed, companies such as Amazon and Whirlpool are already exploring workplace-based testing. Amazon, in particular, is starting to take step towards regularly testing all staff, including those without symptoms, according to CEO Jeff Bezos in his letter to shareholders.

What are the pluses and minuses of workplace-based testing? Done right, it benefits workers, businesses, and the broader society. Individuals get a safer work environment and sick leave if they test positive. Businesses get to stay open in a sustainable way. And public health is improved, especially if the information gained from the test can be used to inform contact tracing. It becomes a bridge to broader testing. Workplace testing gets us a lot closer to the 500,000 tests per day that many experts think is necessary.

Done wrong, workplace-based testing can be used as a hammer against workers, violating privacy without gains. The key is to understand what workplace-based testing can do and what it can’t.

First, we’re talking about tests for current COVID-19 infection, not tests for antibodies or immunity. Some people have suggested favoring workers who have coronavirus antibodies, but it’s going to be some time before we know how long immunity lasts. As long as that’s unknown, companies have to test for infections.

Second, businesses must pay for the test. Currently, each cartridge for Abbott Laboratories’ rapid coronavirus tests costs $40. The Cepheid point-of-care test requires a cartridge that sells for $35. By comparison, average compensation in the private sector is about $35 an hour, so the cost of one test is about an hour of work. In addition, we’d have to add in the cost of the equipment and trained personnel to administer and run the tests.

But these numbers will likely come down quickly as more tests come on the market. Big companies can buy in bulk, which can help bring down the costs. And Amazon is exploring building its own testing capabilities.

Third, the nasal swabs or saliva analysis will have to be repeated regularly, both because of the possibility of false negatives and because workers can obviously pick up the coronavirus at home or in the community. In addition, they will have to be supplemented with daily temperature checks.

Fourth, the work environment will have to be restructured, where possible, to minimize the number of people affected if and when someone is found positive. That means shifts, even for office work, and rearrangement of factories and the like to reduce contact. This is essential, from the personal, business, and public health perspective.

Fifth, the information from the tests has to be available to the public health authorities for contact tracing and potential isolation of infected people. That’s essential to fully leverage business testing for the public good.

Indeed, this division of labor is appropriate for the United States. health care system, which still depends on employer-provided health insurance. Companies are used to providing health coverage for workers, so testing becomes a relatively small part of these expenditures.

While much of testing can be decentralized to workplaces, contract tracing and followup is something only the public sector can take the lead on, aided perhaps by the sort of technological capabilities that companies such as Apple and Google are building. And to be frank, there still isn’t yet bipartisan political support for expanding public health funding enough to support both large-scale testing and large-scale contact tracing.

Legally, testing by employers is on firm ground during a pandemic, as part of providing a safe workplace. The EEOC has already noted that

Generally, measuring an employee’s body temperature is a medical examination. Because the CDC and state/local health authorities have acknowledged community spread of COVID-19 and issued attendant precautions, employers may measure employees’ body temperature.

The same reasoning applies to other kinds of pandemic-related testing. In addition, the EEOC has noted that while employers must keep health records in a confidential file, they may disclose the name of employees that have COVID-19 to public health authorities.

As an economic decision, workplace testing is a positive for employees. Everyone wants to earn a living, and no one wants to die. So workplaces that pay more attention to safety will be more attractive to workers, especially if a positive test comes with paid sick leave and payments for care.

Similarly, as the cost of testing goes down, it looks increasingly appealing from a business perspective as well. A large body of economic literature shows that businesses that don’t test will have to pay higher wages in order to attract workers, even in these hard times. Workers have a good sense of their risk level, and vote with their feet accordingly.

The largest businesses are likely to be the ones that lead the way towards testing. Pre-pandemic, there were roughly 1400 firms with employment over 10,000 workers in the United States. Together these firms employ roughly 30 million workers. Not every big company will test, of course, but if 10% of these big-company workers are tested every two weeks, on average, that comes to 300,000 tests per day.

To be a good proposition for workers and businesses, testing doesn’t have to be perfect but it does have to be systematic. Businesses can’t stop and start — they have to pick a strategy and stick to it. And the strategy has to include a commitment to take immediate steps when positives occur, as they inevitably will.

It should be noted that there’s one part of the labor market where the risk-pay tradeoff doesn’t hold, and that’s immigrant workers, especially from Mexico. According to a 2010 economic study, Mexican immigrant workers “on average

receive zero or very low levels of wage premiums for fatal injury risks.” The key factor appears to be whether the immigrant worker is fluent in English. So industries that employ a larger number of Mexican immigrants who are not fluent in English — notably agriculture and food production — may not be under the same pressure to test.

The public health analysis is more complicated. On the one hand, opening up workplaces does reduce social distancing and increase potential transmissions. It’s a function of how many people are in contact with each other at the workplace, the length of time between tests, and the odds of being infected at home or in transit.

On the other hand, sustained business testing will take a significant burden off the public health system. If a significant number of large employers start workplace testing, it has the potential for reaching a large number of Americans quickly.

But the benefits of this testing require that the public health system be ready to act on this information with sustained contact tracing, to understand how the worker got infected and to potentially isolate their families and contacts who may be asymptomatic and not realize that that they are infectious. Businesses obviously cannot do contact tracing beyond the workplace — that’s the responsibility of the private sector. So business testing makes sense as a complement to investment in public health contact tracing as well.

What about the downsides of workplace-based testing? It clearly raises issues of privacy, especially if the names of people who test positive are passed onto public health authorities. It’s essential that workers not be penalized for testing positive. Nor should they be penalized for being in a vulnerable category, like being over 60 or immune-compromised. Indeed, comprehensive testing makes it easier to employ such people.

Similarly, workers that test positive should be eligible for paid sick leave. That’s likely to raise payroll costs more than the testing itself. If we assume that 5% of the big-company workforce tests positive at any moment and is on sick leave, that raises average weekly compensation costs to large companies by $2.5 billion. That’s a significant cost, but it can be absorbed or passed onto consumers as an essential part of doing business.

Another issue is whether small businesses can afford workplace-based testing that allows them to compete with big businesses. Some provision should be made for allowing small businesses to take advantage of the testing supply chains that large companies develop, to bring down the costs.

In the end, testing in the workplace is an affordable proposition. It will raise costs and likely prices, and lower profits, but that’s a small price to pay for a safer workplace.

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Radically Pragmatic. We seek to advance progressive, market-friendly ideas that promote American innovation, economic growth, and wider opportunity.

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