Wednesday, 21 December 2016

Workplace Safety

It's widely believed that it was the intervention of government and labour unions which is responsible for improving safety conditions in factories and other industries, but that is not accurate. This graph demonstrates that workplace fatalities were already very much on the decline before OSHA (the Occupational Safety and Health Administration) was even founded in America:

Effect of OSHA work workplace fatalities:

Tom DiLorenzo wrote in Capitalism "Enriches the Working Class":
"Capitalism has also made the workplace safer. In relatively “dangerous,” strenuous, or dirty jobs, employers must pay a wage premium because relatively few people want such jobs. Economists call this a “compensating difference.” The man who rides on the outside of the garbage truck at daybreak, in the winter, in the northern states, does so because he makes a very good salary – better than any of his alternatives. Profit-seeking capitalists have always understood that they need to pay more to get people to perform risky or dangerous work. Therefore, they have also always understood that there is profit in making the work place safer. A safer workplace requires a lesser compensating difference. Lower wages paid to the workers can mean higher profits for the capitalist. Thus, the American workplace had become safer and safer for generations before the Occupational Safety and Health Administration (OSHA) was established in the 1970s. Indeed, OSHA has often reduced workplace safety with its clumsy and stupid workplace rules enforced by government bureaucrats with no knowledge of the specific work that they are regulating. "

The government can intervene to bring about workplace safety faster, but this will not be without any negative consequences to their employees. The dictates of government will displace private efforts. Once the state declares that they are in charge of safety businesspersons are going to leave it up to the experts. Rather than investigating what investments will improve safety most effectively, they will spend lots of money on whatever the central planners at OSHA dictate; and if these are harebrained ideas these resources will be misallocated and go completely to waste.

Do you really think those workplace safety advancements were paid for out of the factory owners pockets? Well they weren't. They were paid for out of the workers pockets. Employers have a certain amount to budget for labour and it makes zero difference to them whatsoever if that gets spent on wages, health and safety, health insurance, company cars or anything else the employees might want to receive as payment in kind. On a free market employees will tend to get roughly the package of spending on them that they want because if a workplace is too dangerous they can go somewhere across the road that pays them less and spends more on safety. As recent empirical evidence of this the economist Benjamin Powell actually went to factories in the poorest countries in the world and asked them if they would like better health and safety, shorter hours, and a long list other benefits; overwhelmingly they said yes to everything - who wouldn't? - Unless those benefits meant less pay. In which case they declined them all. This is why workplace safety was shoddy when people were poor, but improved as people got richer. When you're broke you'd rather your employer spent the money on your wage than health and safety. However, as your standard of living increases safety at work becomes more of a priority so your expectations on your employer go up. This would all arranged voluntarily even without legislation from government. In fact it was! If employers were responsible for injuries or deaths they may have been sued for damage in common law courts for having caused harm or loss.

The best defense of workers rights is having the largest choice of employers available as possible. All of the things which the left think will help workers reduces their number of options by making employing people profitable to less employers and therefore reducing the options of workers rather than increasing them. The consequence of having less jobs to go around is that low skilled workers have to accept whatever is going on whatever terms are offered to them, and often tolerate crappy bosses. On a free market, some people might have to tolerate a less well paid job in the short term, but if they have a bad boss or do not like the safety conditions at work they can easily walk into a job elsewhere because anyone can employ them. This is a system of spiritual advancement. A wise individual can choose the job that will teach them the most skills, then move to the next one, and onto the next, and keep on moving from job to job gathering skills until they can get a management position, start their own business, or become a staff trainer or consultant themselves. It affords the maximum opportunity for class mobility. Each well-intentioned socialist policy: the minimum wage, maximum regulations, workplace safety, - takes a big slice out of the pie of possible jobs available and reduces the prospects of the poor to become wealthy in the long term.


  1. Replies
    1. I tried to get earlier data Dominic but I couldn't. I guess that's when they started counting. I think you'll find what we see is a continuation a trend that began the instant factories started getting populated, as the welfare of the poor increased every year from the beginning of the industrial revolution in a manner unprecedented in history. This was despite hugely regressive taxes like the corn laws and 3 costly wars - if it was not for these their welfare would have increased quicker still.
      As people became more wealthy the demand for safer workplaces out paced the demand for higher pay and employees could choose between factories as there was relatively little to stop anyone with the capital from opening one.

  2. Very intelligent article. Food for thought. :)