Dispelling an OSHA myth

We long been hearing moans and groans from many in the business community about how OSHA rules stiffle the economy, or worse, from employers who insist that following OSHA rules will cost them jobs.   The sad truth is the exact opposite: failing to meet basic health and safety standards can shutter the doors of your business.   Just look at what was announced by ConAgra last week about their Slim Jim plant near Garner, NC, the site of massive explosion in June that killed three workers.  They are laying-off more than 300 workers.  In the words of the USW's Jim Frederick:

"The old myth: if we make the boss follow OSHA rules it will cost us jobs.  Or is it the inverse?:  if we donât make the boss follow OSHA rules it will cost us jobs."

The GarnerCitizen.com reports in "ConAgra plans layoffs":

"The company says the job cuts are directly connected to the June 9 accident.  'It was a very difficult decision,' company spokesman Dave Jackson said.  'We didnât want to do it, but at the same time we can only produce about half of the product that we did prior to the accident.'  The company met in a town hall meeting with 600 employees [on] Sept. 16 to inform them of the layoffs.  Since the accident, the company has been paying all employees who are unable to work for 40 hours a week. Those payments stopped, however, as of Monday, Sept. 21."

That part of the story is terrible enough, but the full toll of the disaster is worse still.  The GarnerCitizen. com reports that 70 workers----70 workers---are still off-work because of the injuries they suffered in the June 9 explosion.   The direct cost of those disabilities are huge, say nothing of the social and other indirect costs for the workers and their families.  

I hope under the new regime at OSHA and OIRA, that the broadest definition of cost for failing to prevent deaths and disability is built into the agency's regulatory flexibility analyses.  They can look to the work of  Professor Les Boden (here, here, here), Professor Al Dembe here, and others for insight on "costs" of work-related injuries that don't make it into typical cost-benefit calculations.  This includes: being forced out of a chosen trade, demands on family members to cut back on school or paid work to care for the injured or take on more household duties, uncompensated injury-related costs, depression and post-traumatic stress disorder.  Better yet, we should figure out a simple mechanism for these 70 injured ConAgra workers and injured workers from around the country to share their own data with OSHA on the costs to their family of this disaster.   Those are economic and social burdens that will drawf the other side of the traditional cost equation.

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I rarely hear the "OSHA/MSHA is trying to put me out of business" argument anymore. The reality is most businesses in most areas realize not only do you sleep easier at night if you follow safe practices but there are business cost benefits to avoiding occupational incidents.
Unfortunately there are a few exceptions out there. Recently I heard of a large airport project in Florida where the contractors do not provide PPE to the employees, but projects like that, thankfully, are no longer the rule.
Much of the credit for improving conditions is the training required by OSHA and MSHA regarding the rights of worker's. Knowledge is power and our workers are more empowered now than ever.

By Glenna Davenpo… (not verified) on 29 Sep 2009 #permalink

Often we all fall into the âit wonât happen to meâ denial mode, from the old timer worker who doesnât need to wear PPE to a Fortune 500 company. As far the financial impact, I found this investment analyst note:

ConAgra Foods Inc (CAG)
ââ¦Slim Jim impact will linger in Q2. It is clear that Slim Jim business recovery was a significant hit on the overall channel, affecting top line growth. Reestablishing capacity has been more than 15% of overall CapEx costs ($119Million). The question remains how much of this impact will linger throughout Q2 and Q3. ConAgra has committed approximately $35 Million of capital related to Slim Jim business recovery efforts.â
SOURCE: Credit Suisse America/US Equity Research, Global Product Marketing, First Edition â US Alert Wed Sept 23, 2009, p. 5 full note on CAG.

When Wall St says jump, a publicly traded company must jump. The disconnect in many organizations is overcoming denial mode along with understanding that say, safety inspections of boilers has a material impact on the company much less the suffering if the injured workers.


By Dave Smith (not verified) on 29 Sep 2009 #permalink