War on regulations misguided

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On the heels of Rep. Todd Rokita (R-IN) suggesting too many safety and health regulations could lead to the destruction of our country, Rep. Tim Walberg (R-MI) complained that the cost of regulations is too high.

“Everyone recognizes the need for commonsense rules that promote workplace safety,” he said on the House floor Feb. 11 (see video below). “However, onerous rules and regulations should not be a roadblock to job creation and economic growth.”

Walberg, chairman of the Education and the Workforce Committee’s Workforce Protections Subcommittee, quoted figures (.pdf file) from the Small Business Administration’s Office of Advocacy that show OSHA regulations cost businesses with fewer than 500 employees between $650 and $781 per employee.

This is a lot of money, no doubt, but the costs from an on-the-job injury and death far exceed regulatory expense.

Every single workplace death in this country costs $1.33 million, according to the National Safety Council. Every medically consulted workplace injury costs $36,000. The cost of injuries per worker, which is the value of goods and services each worker must produce to offset the cost of an injury, is $1,200.

On a broader scale, the SBA report cited by Walberg found OSHA regulations cost small business employers a total of $64.8 billion (cost estimate in 2009 dollars). But occupational injuries in 2009 cost U.S. workplaces $168.9 billion, according to the National Safety Council. Here’s how most of that figure breaks down:

  • $82.4 billion in productivity loss
  • $38.3 billion in medical costs
  • $33.1 billion in administrative expenses
  • $10.3 billion in uninsured costs, such as the time to investigate the injury and write up reports

I’m no math whiz, but it seems the cost of compliance is far lower than the cost of workplace injuries or deaths. Granted, some of this is an apples-to-oranges comparison – not every company will be faced with these injury and death costs, thankfully, but the costs for regulatory compliance will still be there. And, of course, some companies do work very hard to comply with OSHA regulations and yet still experience an unfortunate incident.

However, I’m willing to bet that, at the end of the day, most employers will be far more willing to spend a few hundred dollars per employee to comply with regulations designed to protect against workplace incidents than to shell out as much as 1,000 times more in the event of a workplace injury or death.

The real cost of occupational safety and health regulations is not in the dollars spent complying with them; it’s in the dollars spent not complying with them.

The opinions expressed in "Washington Wire" do not necessarily reflect those of the National Safety Council or affiliated local Chapters."

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