Economist: OSHA and MSHA Have Failed

Using charts, statistics, and anecdotes Thomas Kniesner, professor of economics at Syracuse University, argued that OSHA has nothing to do with the decline in U.S. workplace fatality rates, or with reducing injuries and illnesses on the job.

In a lecture given yesterday (Sept. 12) at Georgetown University's Center for Business and Public Policy in Washington, DC, Kniesner presented a paper that made the following points about OSHA:

  • The decline in workplace fatalities pre-dated the creation of Occupational Safety and Health Act of 1970, and the rate of decline did not accelerate after 1970;
  • Occupational injury and illness rates have not declined, either pre- or post-OSHA;
  • OSHA inspections are so few and fines are so low that companies have little economic incentive to alter their behavior out of fear of OSHA enforcement.

Kniesner said defenders of government workplace enforcement agencies frequently point to the Mine Safety and Health Administration (MSHA) as a better example of how an agency can affect safety. MSHA has a far more robust enforcement effort than OSHA, inspecting mines every three months. But the professor said an exhaustive analysis of MSHA data, covering 50,000 inspections from 1983-1997 showed there is little evidence that MSHA has improved safety or health at underground mines.

"Our results suggest that at most it would take 100 percent more MSHA inspections to reduce lost work day case rates by 20 percent," said Kniesner.

Kniesner made three other arguments to show why OSHA is the least significant factor in cutting occupational hazards:

  • Workers' compensation caused companies to spend $52 billion in 1998;
  • Wage differentials, or the premium companies must pay workers who work with higher risk than others with the same job but where risks are lower, accounted for an estimated $210 billion paid by U.S. firms in 1998;
  • OSHA fines, state and federal, totaled $132 million that year, a ratio of 2,000 to one when compared to workers' compensation and wage differentials.

But the economist did not argue the solution to the problem was to increase OSHA and MSHA fines and enforcement. He maintained instead that it would be far more cost-effective to cut the enforcement budgets of these agencies by 50 percent and use the money to buy defibrillators for every workplace.

Kniesner's paper provoked a lively discussion at the packed conference room, as economists and others questioned his data by pointing to studies that have shown when OSHA regulations and enforcement are narrowly focused on specific hazards, safety and health improve.

Others questioned Kniesner's policy assumptions, which equated saving lives from heart attacks with lives lost due to unsafe workplaces.

"We have greater control over our health and our hearts, and greater responsibility for them, than we can ever have over unsafe workplaces," asserted Joseph Fowler, Jr., executive director of the Laborers' Health and Safety Fund of North America. "That's why Congress passed a law promising every American a safe and healthy workplace."

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