NCPA - National Center for Policy Analysis

OSHA'S Role in Promoting Occupational Safety and Health

November 20, 2012

The Occupational Safety and Health Act of 1970 created two federal agencies: the Occupational Safety and Health Administration (OSHA) and the National Institute for Occupational Safety and Health (NIOSH) in response to the deteriorating health conditions of many workers. Today, workplace injuries and fatalities have fallen dramatically, but OSHA is not the reason for it, says John D. Leeth, a professor and chair of Bentley University's Department of Economics.

  • At the end of the 1960s, 3 percent of American workers were injured enough to require at least one day off to recover.
  • This resulted in a loss of over 100,000 man-years of production.
  • By 1970, the lost-time injury rate increased to 15.2 million man-hours.
  • To add to that, another 390,000 workers were diagnosed with industrial diseases.

All these factors provided an impetus for the federal government to create OSHA. And while health conditions have improved over the years, factors other than OSHA are responsible. In fact, the most powerful mechanism in making changes to the workplace has been the market.

  • The legal system, for example, has created incentives for employers to create a safe environment to avoid exorbitant legal fees.
  • Moreover, the loss of production as a result of injuries has prompted many employers to make the work environment safer.
  • Additionally, states' workers' compensation insurance programs also provide an incentive to improve workers' health and reduce hazard.

Critics of market forces say that it is ineffective because workers lack the necessary information to evaluate hazards properly. They further contend that employers do not compensate workers for riskier jobs. However, evidence from studies indicate that workers do consider risk when accepting employment and that wages increase in relation to the amount of risk associated with a job.

These factors, combined with technological advances, have made the workplace safer and reduced health hazards for many workers. In lieu of this, OSHA should use its limited resources more effectively to complement other pillars of workplace safety in several ways:

  • Provide information to workers about possible hazards.
  • Gear inspections toward worksites where dangers are hard to monitor, and firms that employ less mobile and less knowledgeable workers.
  • Moreover, it should continue to offer consultation services to small and medium-sized firms.
  • Finally, encourage firms to establish management systems that address health and safety issues.

Source: John D. Leeth, "OSHA'S Role in Promoting Occupational Safety and Health," Mercatus Center, November 13, 2012.


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