Last week, as the Occupational Safety and Health Administration celebrated its 25th anniversary, it extended an olive branch of sorts to America’s estimated 5 million employers–many of whom look at OSHA and other federal regulatory agencies as their worst nightmare.
OSHA promised to streamline business reporting rules and reign in its 1,000 inspectors if employers themselves would rate their workplace conditions and then work with the agency to fix health and safety violations.
The unusual move raised eyebrows across America’s corporate landscape, but by and large the business community remains skeptical or outright cynical about any attempts at cooperation by federal regulatory authorities.
After all, if history is any judge, the relationship between America’s businesses and the government bureaucracies set up to regulate them has been anything but harmonious.
Government agencies such as OSHA, the National Institute for Occupational Safety and Health, the Federal Trade Commission, the Food and Drug Administration, the Securities and Exchange Commission, the Equal Employment and Opportunity Commission, the Environmental Protection Agency and the U.S. Department of Agriculture field 130,000 regulators and inspectors that much of the business world views as a plague of locusts.
For example, even as OSHA and NIOSH gathered for a short ceremony Monday to mark the anniversary of their dual creation in 1970 by President Nixon, both were engaged in raucous, headline-making battles with corporate America.
NIOSH, the 900-person agency which is part of the Centers for Disease Control, was waging a legal battle with Caterpillar, Inc. over a plant it operates in York, Pa.
Industrial hygienists and epidemiologists from NIOSH, after being denied entry to the plant to investigate reports of potential health hazards, got a federal court order to allow its inspectors into the Caterpillar facility.
Caterpillar has refused to comply. Instead, it has called the NIOSH investigation “unreasonable” and an “illegal invasion” of its facilities in order to support an “unproven medical hypothesis.”
NIOSH Director Dr. Linda Rosenstock said it had received reports from the United Auto Workers union and employees that high levels of cadmium in the plant were lowering levels of testosterone, which can retard male reproductive ability, among other health problems.
On Wednesday, the U.S. attorney for the middle district of Pennsylvania said in a court document he had received information that Caterpillar was working to eliminate evidence of cadmium in the plant.
OSHA, meanwhile, was engaged in a nasty struggle with AK Steel Corp. of Middletown, Ohio, over a flash fire last October that killed one worker and seriously injured two others.
While OSHA has proposed penalties totaling $1 million against AK Steel, the company has promised to “vigorously contest” the citations.
James K. Stanely, AK Steel’s vice president of safety and health, insists the company’s overall safety record is one of the best among the eight-largest integrated U.S. steel companies.
OSHA disagrees.
“This company has had nine fatalities during the past 20 months,” said OSHA representative Cheryl Byrne. “OSHA currently has four investigations going on there. There is clearly a problem. But the company has taken a bunker mentality and has refused OSHA entry. We have had to get warrants.”
And so it goes–a never-ending struggle between business and government; between a company’s scramble to make a profit and stay in business and a government agency’s mandate to safeguard consumers and employees.
Chicago has been treated to a high-profile example of that struggle in the lawsuit filed by the EEOC against the Mitsubishi Motor Manufacturing of America plant in Normal. The EEOC lawsuit, filed on behalf of several female employees, alleges a pattern of “egregious and pervasive sexual harassment” at the plant. Mitsubishi brass and many of the company’s employees vehemently deny the charges.
“We feel like we’ve been targeted by the EEOC because our parent company is Japanese,” said one Mitsubishi official who spoke on condition of anonymity. “This is nothing more than an intrusion by government into our operations.”
Government regulators hear that kind of response all the time.
“Companies don’t want to be regulated, period,” said OSHA’s Byrne. “But that is not an option. Our goal is to make regulations and their enforcement reflect the real world. We don’t send out gangs of marauding inspectors. We have 1,000 nationwide and an additional 1,000 at the state level. And they are responsible for 100 million workers at almost 6 million work sites.”
Yet those who own and operate the nation’s businesses and factories see things differently. They don’t see just one agency, such as OSHA, but a whole raft of federal agencies that seem bent on making their existence miserable.
They say the heaviest drag on their ability to compete is not the cost of labor or equipment, it’s government regulation.
They say government regulation has become so pervasive and costly that it’s almost like having another layer of competitors to deal with.
Indeed, independent studies conducted recently on the subject have reached some startling conclusions about its impact on business and the American economy.
A study by the Center for the Study of American Business at Washington University in St. Louis says $1.3 trillion in total economic activity is lost each year because of government regulations. That includes things like lost productivity, lost business and the cost of compliance.
More than $200 billion is spent on paperwork alone, the report said.
“There are more regulations than ever,” said Murray Weidenbaum, director of the Center. “And they are continuing to grow.”
One way Weidenbaum and others gauge the growth of government regulations is by examining the Federal Register, the nation’s regulatory bible. The Federal Register was 53,000 pages in 1988. By 1994 it had grown to almost 67,000 pages.
A recent General Accounting Office study found that in the past 50 years, 26 laws have been passed that regulate the workplace. They include things like the Civil Rights Act, Americans with Disabilities Act, and Immigration Reform and Control Act.
“There is such a multiplicity of regulations today that many are devoid of common sense.” Weidenbaum said. “They literally get in each other’s way. One agency tells you to do it one way and another agency fines you if you do.”
David Ridenour, vice president of the Washington-based National Center for Public Policy Research, says the experience of Raymond Haysbert, owner of the Park Sausage Co. in Baltimore is a good example of life in the regulatory jungle–especially for small and medium-size businesses that complain federal regulations can sometimes put them out of business.
Haysbert was told by the Department of Agriculture to wash down the company’s floors at regular intervals throughout the day or he would be fined. But OSHA told him he would be fined if he didn’t keep his floors dry at all times.
“The government has yet to provide any guidelines for dry-washing floors,” said Ridenour.
Sometimes the clinging undergrowth of regulation can border on the absurd, says Ridenour.
Take the case of DeBest, Inc. a plumbing company in Garden City, Idaho, It was fined $7,875 after two employees failed to don government-approved hard hats or build a retaining wall before rescuing another worker who was trapped under a mound of earth after the trench he was working in collapsed.
OSHA’s Byrne says the agency ultimately rescinded the fine, but sees no need to apologize for the regulation on which it was based.
“The intent of the regulation is good,” said Byrne. “It is designed to save lives.”
Since OSHA strengthened trenching regulations in 1990, trenching fatalities have declined 35 percent and hundreds of trenching accidents have been prevented, Byrne says.
“If one of every 10,000 inspections produces a silly situation like the DeBest story, that’s OK,” Byrne said. “But if 9,999 inspections save peoples lives or protect them, then its worth it.”
Therein lies the dilemma, say those on both sides of the issue. It’s a classic struggle between those who want to operate a business in an economy as free of rules as possible and those who see a need to provide a layer of protection for society.
If Americans were suddenly thrust back into the late 19th Century when regulation was virtually non-existent and businesses and industry were guided only by some ill-defined moral obligation to provide safe workplaces and a fair field of competition, they probably wouldn’t like it, say historians.
The turn of the century was an era of unprecedented worker and consumer exploitation devoid of the kinds of workplace rules and fair competition laws we take for granted today.
The environment was polluted with impunity. Similarly, the food, drugs, machinery, appliances, and medical equipment sold during the early years of this century would never make it to the consumer today because much of it would be rejected as unsafe.
A study released last week by the AFL-CIO, the federation of 78 labor unions, said since President Nixon signed the bill creating OSHA and NIOSH, the rate of workplace deaths has fallen by 72 percent and the rate of injuries has been cut by 23 percent.
Nevertheless, the report said, 6,588 workers were killed on the job in 1995, more than 6.8 million were injured and an estimated 50,000 died of occupational diseases. Job injuries alone cost the economy more than $120 billion and 125 million lost work days each year.
On an average day, 17 working Americans are killed in safety accidents and another 16,000 are injured, according to OSHA statistics. Meat-packing workers suffer an incredible annual injury and illness rate of 39 per 100. And cumulative trauma disorders created by repetitive motion and other demands of the new workplace have jumped 770 percent in the past decade.
With numbers like those, it’s hard for anyone to make a case for abolishing government watchdog agencies like OSHA or NIOSH.
“I know of no company or trade association that says let’s eliminate the FDA or EPA,” said Weidenbaum. “Do we need environmental protection? Of course. Do we need to be protected from dangerous drugs or medical equipment? There is no question. It’s just a question of how much. Most businesses want the process and the regulations streamlined.”
According to a recent poll by the Center for the Study of American Business, 52 percent of America’s mid-sized companies named government regulation as their biggest challenge–more challenging than taxes, controlling expenses and providing health care.
