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Will Deregulation Kill Workers?

Don't freak out about a slight fall in the number of federal safety inspectors.

Workplace health & safetyDesigner491/Dreamstime.comA temporary federal hiring freeze last year saw staffing numbers at the Occupational Safety and Health Administration (OSHA) fall by about 4 percent. Forty of the agency's approximately 1,000 inspectors departed without replacements filling their vacated positions.

Some observers see this as an example of deregulatory fervor running amuck and costing lives. "The bottom line," wrote former OSHA official Jordan Barab, "is that shrinking government is not just about reducing employees and 'bureaucrats,' or combating 'waste, fraud and abuse,' it means limbs severed and lives lost."

"While Trump might say we need smaller budget, smaller government, at the end of the day I think workers would rather their health and safety thought of," says Marni Von Wilpert of the Economic Policy Institute. A declining number of OSHA inspectors, managers, and other staff, she tells Reason, are putting lives at risk.

In fact, as with most critiques of the Trump administration's rather marginal regulatory rollbacks, these worries about a small decline in the number of safety snoops are overwrought. They carry an implicit assumption that only federal regulation can keep workers safe, but the evidence suggests the opposite: While the number of OSHA inspectors per capita has declined, American workplaces have only gotten safer.

Since agency's founding in 1971, the number of OSHA inspectors has stayed pretty consistent, never going above 1,500; it has hovered around 1,000 since the early 1980s. During that same time, the number of workplaces in the United States has expanded rapidly. So the ratio of inspectors to workers has fallen from roughly 15 inspectors for every million employees in 1980 to 6.8 per million in 2016.

"The economy has been growing and jobs have been growing. OSHA's ability to keep up with workplace safety has been shrinking," von Wilpert says.

Yet workers are safer on the job now than at almost anytime before.

In 1980, 13,800 people died at work—a workplace fatality rate of 13 deaths per 100,000 workers. By 2015, worker deaths were down to 4,836, making for a workplace fatality rate of 3.4 deaths per 100,000 workers.

Workplace fatalities were also falling at a continous rate in the decades prior to OSHA's creation, dropping from 37 deaths per 100,000 workers in 1933 to 17 per 100,000 workers the year OSHA was created.

None of that surprises John Leeth, a Bentley University economist who has researched workplace safety. A marginal decline in the number of OSHA inspectors in nothing to be concerned about, he says.

"It's hard to say that increasing the number of inspectors for OSHA or reducing them by small amounts is going to have much of an impact one way or another," Leeth tells Reason.

Employers have much stronger incentives than OSHA to provide a safe workplace. Each state, for example, requires employers to purchase workers compensation insurance for their employees. Those policies cost employers $91.8 billion in 2014, according to a study conducted by the National Academy of Social Insurance. Total OSHA penalties in that same year totaled only $143.5 million.

Like other forms of insurance, workers comp grows more expensive with new injuries and accidents. Leeth estimates that this incentive to improve workplace safety is responsible for up to a 22 percent reduction in workplace fatalities.

Labor markets themselves provide another major incentive for employers to provide safer working conditions. "Workers don't like risk," says Leeth. "There is nothing to be gained by taking a risky job other than the employer giving you something in return."

A 2012 working paper co-authored by Leeth found that employers paid an additional $100 billion a year in this kind of danger pay, easily dwarfing the costs of OSHA fines and enforcement actions.

The ability to sue over workplace injuries and health hazards also encourage employers to protect employer safety.

"If you rank the three other areas that provide incentives, you're talking multi-billion dollars, and then you get to OSHA and the expected penalty is incredibly small," says Leeth.

Having 40 fewer inspectors isn't likely to change that.

Photo Credit: Designer491/Dreamstime.com

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  • Enjoy Every Sandwich||

    I know this is hard for some people to understand, but businesses don't want their workers getting hurt or killed, even if you cling to the notion that employers are horrible greedy capitalists. Replacing a worker costs a lot of money. Workers are not interchangeable parts however much government bureaucrats and progs may believe otherwise.

  • Sevo||

    "Workers are not interchangeable parts however much government bureaucrats and progs may believe otherwise."

    I've even heard of employers raising a worker's pay to keep them from leaving!

  • sarcasmic||

    That's because government bureaucrats are interchangeable.

  • Citizen X - #6||

    That's the entire point of a bureaucracy, government or otherwise. A bureaucracy is a machine made of people in order to perform a given task the same way every time.

  • loveconstitution1789||

    A business owner might not care about replacing unskilled workers like ditch diggers and strawberry pickers but times have changed when dead people were just left in the streets.

    We have combines now that harvest cotton which used to take "x" number of people days to pick.

    Know what you are worth to an employer and why and you will likely never have much problems with gaps in employment.

  • ||

    Mostly true but sometimes some businesses/industries don't mind high turnover. I remember my time at the bank being like that. Management would from time to time cut financial planners or other people on commission who made too much money in their view. I guess they calculated it was cheaper (?) to retrain a whole bunch of people. Of course, the continuity of the advisor/customer relationship - which they drilled into our heads was crucial - suddenly didn't seem to matter when some employees were making too much.

    But overall, you're right. Businesses would prefer to retain. I know I have a girl on staff I'd like to keep but it may prove difficult. Building a whole new relationship hinged on trust is not easy. We'll see.

  • Citizen X - #6||

    That's because banks are a prime example of a nongovernmental bureaucracy as i described above. You want to see Hayek's knowledge problem in action? Try to get in touch with anyone in a big bank's loss mitigation department who has any idea what the hell is going on - and it doesn't matter if you're a struggling borrower or a legal professional who has been retained by that bank specifically to perform loss mitigation/collections work.

  • Enjoy Every Sandwich||

    I figure the cost would be high even if the work is low skill, if a significant number of the workers are getting killed or maimed (as opposed to leaving or being laid off). I suppose that might not be the case if job seekers had absolutely no other choice but to work there, but where does that happen nowadays?

  • Lester224||

    If you are in a rural area with few employers for low-skill workers (like chicken factory or a coal mine) I think some amount of regulation is needed if past history is any guide.

    I am always amazed at the naivete of some anti-regulatory hard-liners. The employers of the world are not all nice people. There are some assholes who own and run factories, mines etc. out there too. Even in America.

    https://www.npr.org/2014/11/12/363058646/
    coal-mines-keep-operating-despite-injuries
    -violations-and-millions-in-fines

  • Uncle Joe||

    Without sufficient consequences for bad behavior, nice employers are at a competitive disadvantage.

  • Tionico||

    and the top performing planners will quite easily find more rewarding work elsewhere, and be replaced by nowhere near as competent droids...... and those planners have their ways of taking their best clients along with them when they move. I had a great manager due to a forced takeover turning my former smaller regioinal bank over to Bank of America. After a while, my guy disappeared. He was replaced by a droid who neither knew nor cared who I was, let alone what any of MY needs/preferences were. Didn't take long to find where he went Seems he and a couple of pals started a whole new bank. When I walked into the door of his new operation he was in deep conversation with a guy in a suit, back by his desk. He signalled his other client, left him walked over to me, greeted me warmly with a big handshake and said "I'll just be another couple minutes, please wait for me if you can>" I could, and did, and thus began the best banking relationship I've ever had. Sadly, that bank got forced by an hostile takeover by a larger one.... my friend lasted less than a year and left. After that, the new bank slid downhill VERY quickly and eventually fell apart. Never did learn where he went.

  • Rich||

    "The bottom line," wrote former OSHA official Jordan Barab, "is that shrinking government ... means limbs severed and lives lost."

    *** cracks knuckles ***

    If you catch my drift.

  • BestUsedCarSales||

    OSHA stopped growing in 1980. The same year that Jason Voorhees was introduced to the world. Coincidence?

  • $park¥ leftist poser||

    I guess Jason's untimely demise could be considered a workplace accident.

  • Citizen X - #6||

    NO SPOILERS.

  • Scarecrow Repair & Chippering||

    I like your drift.

  • Citizen X - #6||

    The potential disapproval of a highly-paid itinerant federal employee is the only reason workers don't jump in front of threshers or stick their faces into running bandsaws. It is known.

  • loveconstitution1789||

    I was killed because of less OSHA inspectors.

  • Bronson, Missouri||

    This was a good article. Won't generate a ton of comments, but a very solid post. Clear, concise, and backed up by relevant facts/research.

    More articles like this and I'll have to stop skipping straight to the comments.

  • Longtobefree||

    OSHA is a violation of the theory of evolution.
    Being stupid should hurt.

  • Tionico||

    OSHA are redundant and no longer useful. Can them. They serve no purpose even remotely useful behond keeping those "emolyees" out of souplines. And this purpose surely is a bug.......

    OSHA could do as well if they never set foot again into any fixed place of business. They waste most of their time prowling aobut searching out such silly things as extensioin cords on the floor, fire extinguishers placed two inches too high/low on the wall, burned out lamp in an EXIT sign, and not enough offishul signage on the wall in the break room. No one has ever died or lost a limb due to any of these situatioins. Further, the only time they can catch out the business owner on such items is when its been a long time since the state equivalent agencies have come round snooping. It would be one thing if they'd simply write up the "violations" and some round again in a month to see they've been dealt with. Instead, they levy crippling fines against struggling employers, thus further diminshing any hope of profitability.

  • Uncle Joe||

    I'll just point out that having extension cords running all over the floor is a pretty dumb thing to do. I especially love seeing a space heater plugged into a cord meant for Christmas lights. Probably haven't had the fire extinguishers checked in 10 years, either.

    Hope your office doesn't burn down & force you to stand in line at the soup kitchen.

  • Uncle Joe||

    Most job injuries are in low/moderate skill jobs. In most of the cases I've seen, employers are pushing workers to meet deadlines or quotas that incentivize breaking existing safety rules. The article is on point with the note that workers' comp insurance companies are probably more on top of this than OSHA.

    The overall budget impact is going to be tiny, I think I saw $13 million in cuts. This is more of a symbolic move than anything. I'd be a lot more worried about efforts to undercut workers' ability to sue when employers turn a blind eye or encourage a dangerous environment. Cost control really is a big driver behind the drop in injuries.

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