“OSHA doesn’t kill jobs; it helps prevent jobs from killing workers.”
I have been promoting that message since I became head of the Occupational Safety and Health Administration almost three years ago. It is supported by empirical evidence—and now—it’s been confirmed by a peer-reviewed study published in Science, one of the world’s top scientific journals. Not only that, the new study, conducted by professors at the University of California and Harvard Business School, shows that OSHA inspections save billions of dollars for employers through reduced workers compensation costs.
The study, “Randomized Government Safety Inspections Reduce Worker Injuries with no Detectable Job Loss,” found that workplace injury claims dropped 9.4% at randomly chosen businesses in the four years following an inspection by the California OSHA program, compared with employers not inspected. Those same employers also saved an average of 26% on workers’ compensation costs, when compared with similar firms that were not inspected. This means that the average employer saved $355,000 (in 2011 dollars) as a result of an OSHA inspection. The effects were seen among small and large employers.
Translated to the nation as a whole, OSHA inspections prevent thousands of workplace injuries, while saving employers money and protecting jobs. Michael Toffel, Associate Professor of Business Administration at the Harvard Business School, estimates that OSHA inspections nationwide could be saving employers $6 billion. And this doesn’t count the costs of lost production when workers are injured or made sick by their jobs or the pain and suffering of employees that is not compensated.
Important Conclusions from the Study:
According to the researchers, “employees almost surely gain from Cal/OSHA inspections,” and there was “no evidence that inspections lead to worse outcomes for employees or employers” in terms of employment or company survival.
“The benefits of a randomized safety inspection appear to be substantial. These results do not support the hypothesis that OSHA regulations and inspections on average have little value in improving health and safety.”
The fact is OSHA inspections save lives and jobs at the same time. This is not a surprise to me. I regularly hear from employers, both large and small, that they value OSHA inspections and treat the inspector as an additional, expert set of eyes.
The findings should finally put an end to the criticisms that OSHA inspections make running a business more expensive without adding value. The results are in: OSHA saves lives and jobs!
{ 30 comments… read them below or add one }
I have found that typically, only those facilities with “something to hide” or those that are more concerned with (this minutes) bottom line fear OSHA. Safety pay off in the long run.
Hello i am a former underground coal miner recently black listed for making a safety complaint to msha. During my enter view with investagator he assured me i had done the right thing an that i would get my job back by letting him conduct a investagation. I never would have thought a man from msha would have lead me down this road.I wish someone could help me get my life back.
As a union safety representative for my union I have seen this first hand that safety pays.
Dr Michaels i have an idea,Pennsylvania has a commerical out on T.V about fighting insurance fraud.It shows a potential employee at an interview with an H.R worker when the potential worker speaks up and states “i think you should know someting i have an insurance fraud conviction on my record” The H.R worker then replies”I’ll have to pass that along we’ll be in touch(while raising her eyebrows).So i thought that OSHA could do the same thing with there whistleblower protection program.We could have a potential employee at an iterview with an H.H rep when the potential employee speaks up and states “UM,I have an OSHA whistleblower claim on my record i think you should know about”, H.R rep,”well i’ll have to pass that along,we’ll be intouch”,then you could show the H.R rep throwing the resumee in the trash can.
What do you think Dr Michaels,the story is about saving jobs this way no one would blow the whistle on safety problem they uncover at there place of employment and lose there jobs right? plus it would free up all those 11(c) workers for your surprise inspections because you already know Dr Michaele 11(c) doesent work.
OSHA has prevented many workplace injuries, while at the same time saving and protecting employees jobs. In my opinion it is false that OSHA makes running a business more expensive while not providing worth.
Just think how effective OSHA could be if they focused more on conducting consultation inspections, which tend to be comprehensive, versus enforcement inspections, which tend to be focused on complaint items.
In response to Brad Ashby,Going through the same thig buddy.Go to the U.S Department of Labor’s youtube video’s and read what i have been posting under the video that MSHA Joe Main has posted and read my comments there and read what i have posted under the video “How to file a complaint” This whole DOL agency is a joke and there were three of us that lost our job.There was even a top OSHA offical who provided me inside information that was like something out of a movie Brad! I used that info that busted our case wide open and DOL swept it under the rug! This case involved refineries and there should have been criminal charges in our case with what i prooved! Something is is terribly wrong here Brad just wish i could figure it out.
If you read my comments on DOL youtube you will find my name and adress if you want,Good luck from one black listed worker to another.
Thanks Hilda Solis great job!
Even if the findings of the cited study are accurate, it doesn’t amtter. The United States was not founded upon an “ends justify the means” approach to governance. Sure, it is THE central principle of followers of Saul Alinsky, but not of Americans at large.
OSHA is not a legitimate part of government. Article 1 of the U.S. Constitution vests ALL legislative authority (consentually granted by the People to the federal government) in Congress. That power cannot be delegated, transferred, assigned, etc. by members of Congress to any other institution. Moreover, the first 3 articles of the Constitution vest each of the 3 essential authorities of government–legislative (Congress and state legislatures), judicial (courts), and executive (President and governors, who enforce laws but ONLY to the extent that officers of the executive branch conclude that a given law is consistent with the Constitution. Yes officers, you MAY refuse to enforce a piece of garbage the emerges from Congress or your states’ legislatures if you believe it violates the principles of the U.S. Constitution or the constitutions of your states and NO OTHER authority can compel you to exercise your enforcement power; only the People can through elections. If We the People disagree with your interpretation and nonenforcement of a law, we will compel the use of enforcement power by removing your from office and replacing you with someone who will enforce the law) in SEPARATE institutions. That is the how the Constitution provides for absolute “separation of powers”. Administrative agencies like OSHA are not legitimate government, because Congress attempts to delegate part of its exclusive lawmaking authority to an body organized under the executive branch, which is forbidden, and that has the practical effect of combining legislative and executive authorities (and in many cases, Congress attempts also to confer a quasi-judicial authority), which also is forbidden. Therefore, agencies are per se unconstitutional, and the rules produced by them, called regulations, are not law. Law can only be made by legislatures. Consequently, even if regulation occasionally offsets the immense damage done to the individual’s freedom to contract, own property, speak freely, etc., IT DOES NOT MATTER!! We, as a nation dedicated to individual liberty and weak, strictly limited central government, must reject platitudes like, “well, at least it does some good…” and refuse to comply with any “law” not created by a legislature.
P.S. All regualtion does is allow agencies to collect damages from businesses WITHOUT having to prove negligence in a court of law. Regulation is a mechanism, created by the agencies themselves, to be able to insert themselves into an incident/accident and be able to take money from someone. Using workplace accidents/incidents as examples, if you are injured on the job you still have to file a civil lawsuits yourselves, and you must prove negligence on the part of your employer through the Constitutional judicial process before you can collect damages. OSHA does not have to do that. It simply says, “Great! Another injury/incident occurred; now we can step into the mess and collect money from the employer.” Afterwards, OSHA leave you, the injured party to file your own lawsuit and actually follow the proper process to collect damages.
I know that OSHA has made the American workforce much safer (which has resulted with countless lives being saved as well as countless injuries and illnesses being avoided) since OSHA was signed into law by President Nixon some 42 years ago. I’m a safety consultant at USDA inspected meat and poultry facilities which is considered to be a “High Hazard” Industry. I have seen 1st hand at many plants when real safety and health training is finally put to bear for all employee’s; with new employee orientations, mandatory personal protective equipment and the like. I’ve also seen top management finally realizing that a safe plant is a more productive plant – thus increasing profit and employee morale.
There are several problems with the study. First of all, the researchers excluded all firms with less than 10 employees. Historically, these firms have fatality rates which are significantly higher than medium to larger-sized firms. If one of OSHA’s purposes is to prevent fatalities, why would they have exluded these firms?
The other problem I see with the study is that it excluded all complaint and accident-related OSHA inspections. In California, accident and complaint-related inspections account for 50% to 85% of all Cal/OSHA inspections. What use is a study of the effectivenss of OSHA inspections if a majority of the OSHA inspections are excluded from the study?
The other concern is that most of the critcism of OSHA is not solely a critique of the inspections that are completed, but rather the effect (or ineffectiveness) of the regulations that are promulgated. Most employers, may rarely receive a “random” inspection” , yet the deterrent effect of the regulations that are promulgated by OSHA force employers to allocate time and money to comply. This study didn’t address the costs and benefits of OSHA regulations which is probably the biggest concern to most employers.
The decline of industrial injuries began in the 1930′s not from OSHA inspections. Business owners and their insurance companies do not want injuries, they cost money. OSHA inspectors do not know the regulations and issue citations to our company when they nor citations and we must spend hours proving they are wrong. After their inspection it has taken 4 months for their report. If these citations are serious why does it take so long for them to notify us? The lower our accident rate is the more they inspect us. Why do we get two inspections in one year and many hazardous businesses are never inspected?
So I guess us independent safety consultants, insurance carrier loss control folks, insurance agency safety staff and company safety coordinators have nothing to do with any of these findings! It’s all due to OSHA Inspections?
Come on……………………………
I agree 100% that OSHA inspections save lives and jobs at the same time. Thank you for sharing.
Brad Ashby and Gregg S
You must contact MSHA and file a Whistleblower complaint. It is illegal to fire, black ball or take any adverse action against someone who reports safety or health hazards to MSHA or OSHA. You are entitled to get your job back with back pay. The problem is if you tell the whistleblower investigator that you do not want to work in that place again; then DOL cannot do much.
And there is no such thing as having a whistleblower complaint ” in your record”. There is no data base for employers to consult to check you out. If you do not tell the Human Resources rep of the new work place, he will not find out. The only way your employer finds out that filed a complaint is if you tell anyone (even your best friend will tell another friend who will tell the boss). So KEEP YOUR MOUTH SHUT!
Employees have a right to a safe workplace environment. OSHA makes sure that employers are up to code and comply with regulations. Employers that ignore OSHA standards are doing a disservice to their employees by putting them in harms way.
And OSHA has done this all by themselves? come on! give credit where credit is due. there are a lot of safety professionals out there that have made this happen…
No way is this true. Simply no way.
From what I’ve read of the study, it doesn’t look like it took into effect the hours and costs required to keep up with the mountain of paperwork and regulations OSHA requires. PSM is exceedingly costly, and small companies that I work with are often times crushed by the red tape and complexity. You get one piece of paper wrong, $ 8,000 fine. Get it wrong the second time, it’s willful. Oh, and OSHA wants the fines increased, and they think they can do it without congressional approval now. That’s comforting.
Did the study factor in the time lost complying with these regulations by employees who would otherwise be working on performing the work they were hired to do? How about the legal costs in either protecting the company initially or attempting to comply with OSHA’s demands? One of my customers received nearly a $ 250,000 fine, yet nobody was ever injured, and most of the citations were regarding paperwork. After paying tens of thousands of dollars in legal fees to protect themselves, they ended up with a $ 64,000 fine. Again, no one was ever injured; most of it was citations over paperwork. In many fines for this customer, OSHA was deferring to RECOMMENDATIONS by an industry trade group that my customer didn’t belong to in order to force fines upon the business. That’s your government at work, folks.
Only a government bureaucrat can look at a $ 100,000 expenditure ($ 64,000 fine, $ 40,000 in legal fees) by a small business to protect itself from a governmental entity claiming the customer didn’t do the paperwork the way they wanted it done, and conclude that it was good for the company. Oh, and the company ended up cancelling the purchase some equipment which would have added jobs. Bang, OSHA killed jobs. Didn’t need a ‘study’ to see that.
I agree with you about OSHA saving lives. The workplace has been made a lot safer because of the laws. I have a degree in Safety and my job has allowed me to see how the process operates. I thank you.
I have found that typically, only those facilities with “something to hide” or those that are more concerned with (this minutes) bottom line fear OSHA. Safety pay off in the long run
The author indicates (though not in the paper itself) that expanding random inspections over the rest of the country would save employers $6B. He does not mention that these savings would occur in the context of a $14T economy, nor does he provide a time-frame for the purported savings. The news articles picked up on $355,000 in benefit per employer, but that’s over five years. If the $6B is over five years, then the ratio of gain to economic activity is $6B/($14T*5), or a 0.009% boost.
The study is not nearly as brazen as the news articles about this benefit. To wit:
“The point estimates on changes in employment, payroll, sales, and credit ratings were all positive, although all coefficients were small, and none approached statistical significance.
“The estimates in Table 2 imply that we can be 95% certain that the mean establishment either grows payroll or experiences a decline of less than $221,000 over the five years after the inspection. The lower bound estimate of lost payroll is in different units than lost earnings and medical costs, and there is substantial uncertainty about our estimated benefits (with a point estimate of $335,000). With that said, these calculations imply that employees almost surely gain from Cal/OSHA inspections.”
Note carefully: “None approached statistical significance.” This means that the study authors cannot conclude that one thing causes the other, and neither should anyone else.
Nothing in the study appears to correct for overall market effect – variations in state GDP, for instance. The study period is 1996-2006, during which time economic output in the state of California was anything but stable.
The study includes survival assessment, and refutes the notion that safety inspections close companies. Of course, companies don’t close because of safety inspections – they close because they can no longer compete successfully in the market. Government safety inspections are one of the drivers towards that outcome, but not the only one. As such, one can intuit that businesses aren’t closing solely because of random safety inspections.
Nothing in the three news articles I read, or the paper itself, predicted the cost of expanding random inspections – either directly to taxpayers for the legions of new inspectors (and their supervisors), or indirectly to employers for the penalties those inspectors would impose on employers who, whether they are operating safely or not, get stuck with penalties for not being safe the way OSHA thinks they should.
Safety saves lives and jobs. OSHA enforcement creates a reason to address compliance risk associated with not following their standards, but does not – by itself – create safe workplaces (for anyone but OSHA employees). Concluding, from this study or any other analysis, that OSHA saves lives and jobs is connecting a dot too far.
@Bill Taylor: OSHA did not perform that study. It was published by non-OSHA folks in a peer-reviewed publication and Dr. Michaels’ simply wrote about it in his blog.
@Luke: It’s a good point and you guys definitely make a difference. But in studies (like this one), those things are inherently controlled for in the selection of the comparison firms. Studies are designed so that the controls (the comparison group) are as close as possible to the actual case selected… meaning their characteristics are the same, like size, and possibly safety involvement, etc… the controls are those eligible to be inspected, but it’s just that they weren’t. My point is simply that these comparison studies make a point of having the only remaining difference being the inspection. That’s how it becomes the difference here. Likewise, a study could be designed so that safety consultants or safety insurance is the only difference factor in question. In that case, OSHA inspections would probably be controlled for and you can look at the outcome of interest to see if there is a significant effect.
johndelahunt-
a few points:
it sounds like you’re advocating for no inspections ever in workplaces. being in the service industry, I would hate to see the effect on my employer who already tries to skirt every requirement of any kind. the effect would be detrimental and expansive!
the market would ideally be not those competing between safe and unsafe workplaces. employers simply shouldn’t be allowed on the market if they cannot provide a basic right to their employees. so this market ideology (that’s all it is) isn’t logical.
and inspectors are not as stingy as some of this string makes them seem. I’ve heard countless stories of those who overlook at many minute hazards and cite only those most major and safety/health-threatening.
I’ve not read the article quoted by Dr. Michaels, however, the conclusions are on the mark from my 33 years industry experience as a safety and health professional. During my career, I’ve been directly involved in several OSHA inspections, including one fatality inspection. They’re not fun and they’re not cheap. But my experience with the Compliance Officers and the Regional Officers has always been positive when you take the emotion out of the discussion. They’re trying to make a point and issue a wake-up call. Fortunately, my employers eventually accepted the call. I’ve experienced work comp rates go from over $1,000,000/yr to less than $20,000/yr; from bad press to being a valued member of the community; and, being able to hire only questionable employees and contractors to being a desireable place to work and being able to set high standards for those who are hired. Employee safety isn’t a “cost”. It’s income.
OSHA’S goal of 0 deaths and injuries is very noble, yet unrealistic. According to the latest OSHA statistics, about 4700 workers die each year from work related accidents in all industries.
Here are some interesting statistics regarding the numbers of deaths in 2010 in the USA:
Auto deaths: 47,000
Accidental deaths at home: 18,000
From smoking: 443,000
Workplace falls on level ground: 100
Falls from roofing construction: 40
Looking at these numbers it appears like the work place is the safest place to be. However for the simplest violation, even when no injury or death occurred, OSHA can and does issue large fines of up to $7,000 per person. So a crew of 10 can mean a $70,000 fine. And this fine is issued to the employer only, regardless of the training or safety requirements of the employer. There are no fines given to the workers, even if they are ignoring the companies requirements. And these burdensome fines can be issued for a violation as simple as climbing a ladder that does not extend 3 feet above the roof edge.
I have been in the roofing industry for over 20 years. The National Roofing Contractors Association has been around for 120 years. We have had several generations of roofing professionals over the years installing roofs. With the regulations that OSHA is now enforcing, the roofers have to fundamentally change the way roofs have been installed for over 100 years. For example, because of new regulations, we can no longer carry shingles up a ladder or make educated onsite decisions as to whether a roof is safe to walk on without being tied off. OSHA has fined several roofing companies over $100,000 for violations that a year ago were legal to do.
Of course we need to be safe on roofs, but the excessive OSHA regulations and disproportionate fines are like swatting a fly with a bazooka.
We need to take the blinders off and rescind these silly rules, regulations and laws that impede progress. We need to let America get back to work.
Regulations do tend to increase costs for employers, so I can see why people were worried about it hurting employment numbers previously. I am happy to see that OSHA is actually reducing the overall expenses of employers. This way, everyone is a winner.
These united, soverign states did not establish a limited central government in order to institute the philosophy that the “ends justify the means”. The union is rooted in the rule of LAW, of which the Constitution is supreme. It doesn’t matter whether any of us believe that OSHA inspections have a positive or (more likely) negative effect on anything.
Inspections are direct interferences with the Natural freedom to contract, and interference is the intent of every regulation if you take the time to consider what must happen to the underlying property interest. For instance, in order for OSHA regulators to trespass on your property without facing legal consequences requires slight-of-hand in the form of something that appears to be law, but isn’t because only legislatures MAY make law. Your employer spent his/her/its (in the case of corporate employers) own money to acquire the property. The Dept. of Labor is NEVER a party in a real estate sales contract formed by two persons, and therefore, DOL has absolutely no interest in the property to which it can attach a right to inspect.
Anyone who desires a safer workplace should accomplish that BY STARTING A BUSINESS!! If you complain, “it’s too hard”, then evaluate why starting a business is difficult: not only do you have to compete in what’s left of the market, but you have to satisfy, comply with, etc. an unsummitable mound of regulation. Inherent Right To Speak…is correct to assert that regulation is not law; that only legislatures can make law. NO property owner should comply with regulation just because it exists, but only because the person (voluntarily) chooses to accomplish the aim(s) of the regulation.
This is a typical approach from a democratic administration. “OSHA saves lives and Jobs”, really? Just how does OSHA do this? Employers didn’t do this, employees didn’t do this, your government did it for you. Why can’t you just keep the politics out of safety? How about this for a headline? “OSHA continues to support the union initiatives and through our draconian approach less work is done, fewer workers are working…and, guess what…fewer accidents”
“OSHA doesn’t kill jobs; it helps prevent jobs from killing workers.” This sentence hears very comfortable. But does it really work? Does government really carry out series of activites to improve workers workplace? If the answer is yes, what changes have taken place since then?
OSHA’s inspection saves an average of 26% on workers’ compensation costs, when compared with similar firms that were not inspected.
This means that the average employer saved $355,000 (in 2011 dollars) as a result of an OSHA inspection.
This shows how much compensation costs saves the employee with the OSHA s inspection.
Thank you
Thanks to OSHA.By this workplace injury claims dropped 9.4%.
The employee saves an avg of 26% of workers compansation cost.