Economics

Worker Safety: Is Government Helpful?

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Not too much, Bryan Caplan concludes, studying the numbers from Kip Viscusi's article on "job safety" in the Concise Encyclopedia of Economics:

Annual OSHA penalties for safety violations (2002): $149,000,000

Annual Workers Compensation Premiums (2001): $26,000,000,000

Estimated Annual Wage Premiums for Risky Activities (2004 dollars): $245,000,000,000

His point: Market incentives for worker safety dwarf legal incentives, which in turn dwarf regulatory incentives. The level of safety we see in the workplace today is about the same as the level we'd see if government just looked the other way.

For a look at the "cost" side of any cost-benefit analysis of OSHA-style workplace regulations, from our Aug/Sept 2001 issue, James De Long on "how New Deal-era regulations stifle flexible work arrangements."

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  1. While an interesting anecdote, it says nothing about the incentives. It is only a commentary on how effective enforcement is (or isn’t) and how compliant firms are. How much is being spent on being OSHA compliant?

    This would be like comparing how much a company spends on auditors for public company filings and fines for SEC violations and saying the market incentives dwarf government incentives. Any CFO would tell you that statement is complete bunk.

  2. At least 20 years ago when I did the research in college, the nubmer of job accidents per hour worked stayed exactly the same pre-OSHA and post OSHA. All of that money and regulation and the accident rate didn’t drop one bit.

  3. The level of safety we see in the workplace today is about the same as the level we’d see if government just looked the other way.

    A liberal would argue that this is precisely what is occuring a Bush administration, by design.

    A realist would argue that the habit of the Bush admin being incomptentent means probably the liberals are right, except that it’s not on purpose.

  4. Interesting graph of the effect of OSHA on declining workplace deaths.

    To be fair, I’d like to see the mix for plant floor jobs versus office jobs. Or perhaps a graph showing the increase in deaths of assembly line robots, who do not enjoy the protections that OSHA provides.

  5. But without OSHA the corporations would be able to take more advantage of the common man. You libertarians are just a bunch of rich white guys who want poor, hard-working people to have unsafe labor conditions and you don’t care what happens to them!

  6. I briefly held a position that included reviewing contractor records for OSHA violations. Almost all of them were on the order of Handrail 32″ above the leading edge of the steps, not the required 30″.

    A liberal would argue that this is precisely what is occuring a Bush administration, by design.

    Actually, it’s been true since Nixon invented the agency.

  7. but only a racist nutball would want to get rid of OSHA…lets get serious people.

  8. But — but — if you do away with OSHA, we won’t be able to pretend to be helping workers! Libruls will be upset!

  9. you don’t care what happens to them!

    I do so!
    Training some new dumb bastard to take the place of the old dumb bastard eats into my DisasterCapitalist Parasite Millions. My Maybach is nearly six months old, and I need a new one. And I just noticed a spot on my top hat.

  10. Reinmoose Troll,

    “You libertarians are just a bunch of rich white guys who want poor, hard-working people to have unsafe labor conditions and you don’t care what happens to them!”

    That’s how we roll on Rainbow Puppy Island. Where’s my beer?

    Actually, we’re not just rich white guys on RPI. Chicks of all flavors. Giggity giggity.

  11. Nick –
    I hear the rate for falling coconut deaths is staggering. We could probably train some monkeys though to help us.

  12. Train them to collect coconuts (just before they fall, of course) and bring them to us for use in making Pina Coladas. Brilliant!

  13. Something must be done to stop the monkeys from unionizing and demanding better working condi…. oh man this pina colada is sooooo gooood.

  14. I don’t know where you guys work, but around here we get yelled at for doing anything that might drive up our work comp policy.

    Although, the numbers quoted up above aren’t very useful. They only show the price of OSHA penalties, not the actaul cost of complying with OSHA regulations, which is substantial. Also doesn’t illustrate all the OSHA regulations that are well intentioned but less safe.

  15. Those OSHA stats need to be per hour worked in various environments, or they are worthless.

  16. In a Public Administration class I took during my Masters program (15 years ago), I did a study of worker comp related accidents and concluded that lack of sleep contributed to more accidents than the use of illegal drugs.

    /Basing personnel decisions on drug testing is a waste of resources and talent.

    //Post accident drug testing does not indicate intoxication at the time of the accident.

  17. We just finished with an OSHA VPP audit and I can assure you jumping through the hoops and putting on the dig and pony show don’t do a damn thing for safety. In the end they always say the same thing, “you are responsible for you own safety.”

    Get this, I cracked up when the lead OSHA Auditor told us maintaining our VPP status was a high privilage and that it was not some……wait for it….. GOVERNMENT FREEBIE!!! I liked to choke on my lunch when he said that. I wanted to ask exactly what would fall under government freebie if everything the government does is financed by the citizens? You know like you auditor job.

    All regulatory adds to the cost. I have plenty of dumbass auditor findings to prove my point if needed.

    Its true at the end of the day your no safer with OSHA. Everything is just CYA incase something happens so you don’t get fined and thats all there is to it.

  18. Well, I followed the links, and nothing in them supports the assertion that workplace safety would be no worse “if government just looked the other way.”

    Yeah, each number is greater than the last. That proves nothing.

    But because deregulation is your ideology, you’re willing to accept any statistic, no matter how irrelevant, if it seems to reinforce what you already believe.

    Come on, you guys can do better.

  19. Xboy, did you see MikeP’s graph at 1:28? Not proof, but it suggests workplace deaths were in a freefall since 1937 and have continued to decline ever since, and with no apparent change in trajectory at OSHA’s conception in 1969.

  20. I think OSHA’s greatest contribution toward saving lives is the spillover from workplace to retail/home of NRTL Listed products. This has been accomplished by OSHA’s certification of private NRTL’s for the purpose of certifying products used in the workplace as safety.

    http://www.osha.gov/dts/otpca/nrtl/index.html

  21. Well, I followed the links, and nothing in them supports the assertion that workplace safety would be no worse “if government just looked the other way.”

    Xboy, you’ve got it just backwards. Around here, we think that the burden of proof lies on the proponents of government programs. They need to show that their favorite program actually produces beneficial results, seeing as said program is financed with taxpayer money and enforced by prosecutors and cops and all.

    The data seems to show that OSHA can’t really be tied to any perceptible increase in worker safety. Got anything that shows otherwise?

  22. BBS: I saw Mike P’s graph and yes, it does show that workplace deaths have been declining both before and after OSHA. Thanks.

    RC: My point is that the data (those three numbers somebody pulled out of their ass) don’t show, or even seem to show, anything at all. I don’t need to be an OSHA supporter to point out a weak argument when I see one.

  23. Xboy, did you see MikeP’s graph at 1:28? Not proof, but it suggests workplace deaths were in a freefall since 1937 and have continued to decline ever since, and with no apparent change in trajectory at OSHA’s conception in 1969.

    Keep in mind, was not the beginning of workplace safety regulation.

  24. Not to be all statist or anything, but if workplace deaths started dropping in ’37 might FDR have done something to get things going?

  25. I’ve worked in construction my whole life and have never seen an OSHA inspection or heard of one. I was actually amazed the reported fines were so high. But I don’t know what point those stats prove. IRS fines are probably dwarfed by the costs to file taxes.

    OSHA is not traffic cops out looking for speeders. They have little budget and few field inspectors. What they provide are minimum guidelines that are used by insurers. If you are in violation of OSHA rules you will have a hard time defending your workmans comp case. State agencies enforce many of these rules and probably collect many more fines than OSHA does.

    As for workplace injuries dropping since 1937, of course they have. I’m sure they have dropped in direct relationship to the shift from farming and industrial to service and professional jobs over that period.

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