How could anyone find fault with a government agency whose stated mission is “to assure so far as possible every working man and woman in the nation safe and healthful working conditions and to preserve our human resources”?[1]
As is typical with government agencies brandishing impossible missions, the Occupational Safety and Health Administration (OSHA) has become a burdensome regulatory body, seemingly more concerned with pushing paper and imposing fines rather than in establishing safer working environments. Indeed, since OSHA’s first month in existence in 1970, when it instituted 4,400 job safety and health rules, the agency has played the role of adversary to American business.[2]
In reality, the private sector possesses every incentive to maintain a safe and healthy working environment for employees. Indeed, beyond a commonly held concern for one’s employees, the financial incentives are substantial. That is, after factoring into the equation lost production and productivity costs, health-care costs, insurance costs, possible lawsuits, and so on, it is clear that safety pays.
Unsafe workplaces have always been and remain the exception rather than the rule. Of course, OSHA acts under the opposite assumption, thereby imposing significant and unnecessary costs on business and the economy. Such costs translate into less entrepreneurship, slower economic growth, and fewer jobs.
There is substantial evidence that OSHA has strayed far from its much-touted educational, advisory, and cooperative relationship with business. Indeed, OSHA’s concern for real safety is lost in a bureaucratic and regulatory haze of citation quotas, tax collection, and remarkably inane regulations. For example:
• OSHA imposes an incredible paperwork burden on U.S. business. In 1994, seven of the top ten most frequent OSHA citations were related to paperwork. OSHA has perfected the government “make-work” scheme—generate a paper blizzard of regulations and then fine businesses for not complying.
• In 1976, 95 percent of OSHA citations were classified as “nonserious,” while in recent years 70 percent of citations have been classified as “serious.”[3] It remains difficult to fathom that “serious” violations have grown so much, especially considering the general decline in workplace deaths and injuries. More likely, a considerable, ongoing redefinition of OSHA violations has been undertaken. Such a development reflects the arbitrary and subjective nature of OSHA citations.
• With the 1990 budget deal, OSHA stepped up its role as a revenue collector for the federal government. OSHA’s maximum allowable penalties were increased seven-fold, and $900 million in additional revenues were expected over five years.
OSHA’s maximum penalties range from $7,000 per violation—for “serious” and “other than serious” classifications—to $70,000 for the “willful and repeat” classification. These are dollar levels that can put many small- and medium-sized businesses out of business. OSHA can levy an “egregious penalty,” where fines can be arbitrarily increased by counting each employee possibly exposed as a separate violation—another example of the arbitrary nature of OSHA citations.
The current administration’s so-called plan to “reinvent” OSHA noted a few examples of ridiculous OSHA regulations:
• Plastic gas cans can be used on manufacturing work sites, but not on construction sites, even if they have been approved by local fire marshals.
• OSHA only allows for radiation signs with purple letters on a yellow background, while the Department of Transportation calls for black on yellow.
• OSHA requires that work-site first-aid kits be approved by a physician.
Unfortunately, in the midst of all the talk about government “reinvention,” OSHA has been busily preparing additional regulations. The federal budget offers program statistics for each agency. “Standards promulgated” (i.e., regulations imposed) are estimated at 12 annually for 1995 and 1996 by OSHA—a kind of regulation quota. OSHA has committed substantial resources to three particular areas in recent years—indoor air quality, ergonomics, and mandatory workplace safety commissions. Scientific evidence pertaining to indoor air quality and ergonomics is weak, if not non-existent, while mandatory worker safety commissions amount to nothing more than a sop to labor unions. If implemented, such regulations will cost tens of billions of dollars annually—translating into fewer resources for investment, employee compensation, and job creation.
Another glaring problem with government regulation and inspections of any industry or workplace is that most, if not all, regulators lack expertise in particular industries. If such individuals were experts, they would hold productive, private sector jobs. They are government bureaucrats. Bureaucrats know paperwork. Hence, the most cited violations by OSHA are paperwork related. The phenomenon was noted by Mr. Vitas M. Plioplys—safety services manager at R.R. Donnelly & Sons Company, the world’s largest commercial printer—before the U.S. House of Representatives Subcommittee on Workforce Protections of the Committee on Economic and Educational Opportunities:
Any time an OSHA inspector comes into one of our facilities, it is probably the first time they have ever seen a large commercial printing press. In our plants where the presses are 100 feet long and three stories high, the OSHA inspector doesn’t know where to start. In every case the inspector will invariably find a guard off, or some other minor, readily apparent violation, but will pass by process equipment which, if it failed, could blow up our facility. Because they are not experts in the industry they cannot know the critical issues we deal with on a daily basis. . . . Our informal conferences end up being training sessions on safety in the printing industry to the local OSHA offices. They do not know our industry, yet try to cite us as if they do.
Even after noting the many OSHA horror stories, regulations, paperwork burdens, and costs, some still claim that OSHA’s benefits outweigh its costs. In a May 16, 1995, speech President Clinton linked OSHA with reduced workplace deaths: “The Occupational Safety and Health Administration has been at work in this cause since it was created with bipartisan support in 1970. Since that time, workplace deaths have been cut in half.”
Of course, workplace deaths were on the decline for decades before OSHA was created. Fewer workplace deaths reflect many changes in our economy—greater automation, shift in employment from manufacturing to the service sector, leaps in technology, enhanced knowledge, et al. There exists no clear and substantial evidence that OSHA has played any significant role in preventing workplace injuries or death.
The incentives for the private sector to maintain safe working conditions are clear. As already mentioned, many factors make safety and good health a priority for employers. Indeed, as many business owners and operators will tell you, maintaining a safe working environment and complying with OSHA regulations are quite often separate endeavors.
OSHA deregulation efforts are underway in Congress, and should be applauded. However, OSHA eventually should be scrapped altogether—“disinvented” if you will.
Private industry—with technological advancements, expanded knowledge, and proper incentives—has steadily improved the working conditions of employees. Regulatory efforts, have been largely incidental to such developments. Indeed, as noted above, regulations often simply create additional costs with few benefits.
Workplace safety can be and is ensured by individuals—employers, employees, and insurance companies—and if necessary, the courts. If the U.S. economy is to compete and succeed in the years ahead, government’s heavy hand of regulation must be lifted.
1. The Occupational Safety and Health Act as quoted in Congressional Quarterly’s Federal Regulatory Directory, Seventh Edition, Congressional Quarterly Inc., Washington, D.C., 1994, p. 394.
3. Information provided by U.S. Representative Cass Ballenger’s office.
Raymond J. Keating
Raymond J. Keating is an author and serves as Chief Economist with the Small Business & Entrepreneurship Council.
This article was originally published on FEE.org. Read the original article.
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