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Posts Tagged ‘OSHA’

Even though I’m a fiscal policy economist, I often get hit with questions on other topics. This frequently happens when I’m overseas and I’m put in the position of defending every nuance of free market policy.

I don’t mind pontificating on other issues, but I get frustrated with myself for sometimes not having the specific knowledge to make the best possible case. I was recently asked, for instance, whether the private sector was capable of protecting the health and safety of workers.

I knew enough to discuss the overall cost of regulation, the amount of valuable time diverted to comply with red tape, and some of the research on regulation and job creation.

Moreover, I made the generic argument about how employers have a profit-maximizing incentive to protect the health and safety of their workforce.

But when the person asserted to me that the creation of the Occupational Safety and Health Administration (OSHA) was followed by safer workplaces, all I could do was mumble something about the sun doesn’t rise because roosters crow and that we would need hypotheticals and counterfactuals.

Fortunately, I work at the Cato Institute where there are experts about almost every policy issue, so I was able to track down some analysis about OSHA in the Cato Handbook for Congress.

This then led me to the National Safety Council, where I discovered that the person who was asking me about regulation was correct. As seen in this chart, workplace deaths have fallen significantly since OSHA was created.

There is a discontinuity in the data in 1992 because of a change in methodology, but I’ll stipulate that this doesn’t weaken in any way the argument that the creation of OSHA was followed by lower death rates in the workplace.

But it also turns out that my cop-out response about roosters and sunrises was right on the mark.

Let’s now look at the same chart, but this time we will include data going all the way back to 1933. What we find is that the workplace deaths were falling before OSHA and they continued to fall after OSHA.

Now for some caveats. This chart doesn’t prove OSHA is completely ineffective. Moreover, I”m sure there were state-based workplace regulations in effect in the pre-OSHA era, and I assume the federal government also had some health and safety regulations as well, perhaps through the Labor Department.

My argument is simply the more limited hypothesis that regulations impose considerable costs, which should be taken into account, and that businesses have a profit-maximizing incentive to promote health and safety in the workplace, which is increasingly important as society becomes richer.

So let me put the onus back on the pro-regulation crowd. Given the charts above, shouldn’t there be some sort of obligation to show that regulation has had a positive impact, particularly when costs are added to the equation.

And don’t give me a lazy argument about “even if we save just one life,” because I’ve already shown that a heavy regulatory burden can have a deadly impact.

P.S. Let’s also remember that OSHA generates some bone-headed regulatory choices, such as the crazy example recounted by Dave Barry and this nutty bit of regulatory excess uncovered by my colleague Walter Olson.

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This story from St. Louis, which my Cato colleague Walter Olson cites in a post about OSHA, is a typical example of bureaucratic stupidity and absurd “safety” laws. My favorite part is that the bureaucrat actually thought it would be reasonable to rent a lift for $750 per day just to attach a harness for somebody working only 11 feet off the ground. I’m sure the consumer would have been happy to swallow that additional cost. Reminds me of the classic Dave Barry column I cited in this post. Good to see that the Occupational Safety and Health Administration is just as incompetent today as it was decades ago.

In April, Heffernan and his nephew were working on a house in the 6400 block of January Avenue. Heffernan had finished rebuilding the chimney and his nephew was finishing up the job when Heffernan left to bid a job in West County. While he was looking at the prospective new job, he got a call from his nephew. There was some kind of a problem with an inspector. Heffernan returned to the site on January Avenue and found that an inspector for the Occupational Safety and Health Administration had shut down the site. In other words, she had told Heffernan’s nephew to stop working. Heffernan was taken back. …He said the inspector had written several citations. The first thing she told him was his scaffold wasn’t level. He said he pulled out his level and put it on the scaffold to show that the scaffold was level. He said the inspector then wrote down the brand name of the level, as if there might be something wrong with his equipment. …He said he offered to let the inspector walk on the scaffold, but she declined and said she was afraid of heights. The inspector told him his nephew needed a helmet and a safety harness. “We have safety harnesses. If the job requires it, we wear them,” Heffernan said. “But my nephew was only about 11 feet off the ground. I told the inspector I didn’t know what I was supposed to attach the harness to. She told me I could rent a lift and run the main pole above the chimney and have the safety line from that hooked to my nephew. A lift costs about $750 a day. It made no sense.” …Heffernan received notice in the mail that he had been cited for three violations. …Heff’s Tuckpointing is a successful operation, but it cannot afford $3,600 in fines. …So Heffernan requested a meeting to contest the violations. He said he spoke with an OSHA compliance officer who offered to drop the first violation and reduce the fines of the other two by 40 percent. Heffernan refused the offer. He has now requested a formal hearing.

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