Sunday, February 9, 2014

Do we need OSHA?

The following text is from Dr. Thomas E. Wood's book, 'Rollback':

"We are told that workplace injuries have declined since the Occupational Safety and Health Administration (OSHA) was established in 1970. We are not told that such injuries were already on the decline before 1970, and that they have not fallen any faster with the opening of this federal agency. 

To the contrary, in roughly the quarter century before the creation of OSHA, the decline in the frequency of workplace fatalities was 70 percent larger than in the quarter century that followed. An evaluation of OSHA’s performance a quarter century after its creation discovered, after a survey of the existing literature, that its effects on workplace safety had been negligible, and that the costs it imposed on the private sector far outweighed the alleged benefits. 

 “The most optimistic figures,” wrote Professors Thomas Kniesner and John Leeth, “show OSHA currently creating three times more costs than it generates in benefits.” Increasing its funding seems unlikely to make much difference; Quebec spends over four times as much per worker and has had no more success than OSHA.

The study also found that 40 percent of recent workplace deaths had been transportation related, with half of those being highway fatalities. Another  20 percent involved assaults and violence at work. There isn’t much OSHA can do about any of this. That means only about two-fifths of workplace fatalities are in fact the kind of incidents most people associate with “workplace fatalities” in the first place. 

Firms spend about 1,600 times as much on compensating wage differentials (i.e., higher wages they must pay to compensate for potentially dangerous work) and workers’ compensation as they do on all of OSHA’s annual fines combined, so their incentives to improve workplace safety come overwhelmingly from these other sources rather than from OSHA’s trivial influence." --- Dr. Thomas E. Woods (Rollback Chp. 6)

Citation for the study Dr. Woods refers to: 
Thomas J. Kniesner and John D. Leeth, “Abolishing OSHA,” Regulation, no. 4, 1995, 49

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