The People's Agents: Rescuing the Occupational Safety and Health Administration

The Occupational Safety and Health Administration (OSHA) is the most maligned and least respected federal agency with responsibility for protecting people’s lives. Now that Hilda Solis has been confirmed as Secretary of the Department of Labor, we can only hope that a new OSHA administrator with a strong stomach, an iron will, and a “yes we can” attitude will be chosen to take over this troubled agency.

Workplace injuries and illnesses numbered 4.1 million in private sector workplaces for 2006, or an average of 4.4 per 100 workers, down from 10.9/100 in 1972. Unfortunately, in all likelihood, these figures substantially understate the true incidence of injuries and illnesses. Recent studies by independent economists suggest that actual injuries may be as much as 30 to 69 percent higher than Bureau of Labor Statistics estimates. A total of 5,488 fatal work injuries were recorded in the United States in 2007, a decrease of 6 percent from the revised total of 5,840 fatal work injuries reported for 2006. Fatal occupational injuries incurred by non-Hispanic Black or African American workers were at the highest level since 1999. Overall, 90 percent of the fatal work injuries involved workers in private industry. According to Michael Silverstein, MD, MPH, an occupational safety and health expert at the University of Washington, most of these incidents were predictable and preventable, with a disproportionate burden falling on construction laborers, nurses’ aides, and farm workers.

In addition to the tremendous toll of human suffering, the economic costs of occupational injuries and death are daunting. According to Liberty Mutual Insurance, the nation’s largest workers’ compensation insurance company, 2005 data indicate that U.S. employers paid $48.3 billion in “direct costs” alone, that is, payments for medical expenses and lost wages. The insurer points out that the major causes of employee injuries remained essentially the same between 1998 and 2004 even though the United States lost almost 20 percent of its manufacturing jobs and created approximately 8 million service positions during this period.

Amazingly, conservatives and liberals basically agree on their diagnosis of OSHA’s deficiencies. Economists Thomas Kniesner and John Leeth, writing for Regulation, a publication of the libertarian Cato Institute, acknowledge that the OSHA does a terrible job with respect to real horrors in the workplace, but they would put it out of business in order to clear the field for state authorities to take on these responsibilities. The AFL-CIO is far more thorough than Cato in mustering the statistics and analyzing the trends that demonstrate the OSHA’s appalling performance, and urges Congress to rehabilitate the agency.

But how to do that? The first place to start with the rehabilitation mission is clearly money. In 1975, OSGA fielded 2,405 inspectors to cover a U.S. worker population of 69 million. In 2006, it fielded 2,165 to cover more than 133 million workers and 8.7 workplaces. The agency generally averages about 40,000 inspections annually, employing a variety of tactics to pick the worst industries, worst workplaces, and emerging hazards. But at this rate, it would take 212 years for OSHA inspectors to visit all the workplaces that were under its jurisdiction in 2006.

The next step toward reform must be strengthening OSHA penalties for illegal conduct. Existing law defines “serious violations” as incidents where there is a “substantial probability that death or serious injury could result,” but penalties are capped at just $7,000 per violation. “Willful violations” involve situations where an employer evinces “plain indifference to the law,” but even then penalties are limited to $70,000 per incident, even if that plain indifference kills a worker. Compounding the gross inadequacy of these provisions, which make it easy for companies to pay their way out of cases that involve death and grievous injury, is the fact that the statute does not give the OSHA any authority to recoup the profits earned as a result of the lawlessness—the avoided costs of forcing workers to operate without safety equipment, for example. It’s practically an invitation to employers to ignore OSHA’s safety standards.

As I have written before on this blog, all indications are that President Obama will nominate Cass Sunstein, a Harvard law professor, to serve as his “regulatory czar,” otherwise known as the director of the Office of Management and Budget’s Office of Information and Regulatory Affairs. Sunstein once wrote an article questioning whether OSHA is constitutional because it wields great—and vague—power that should be confined to elected leaders. Given the agency’s tissue paper tiger nature, this criticism is peculiar. But Sunstein could go a long way toward proving his credentials as an advocate of strong and smart regulation by taking OSHA under his wing, refining its power, helping it get the resources it needs to target willful violators, and saving thousands of workers from needless death and injury.