I have been promoting that message since I became head of the Occupational Safety and Health Administration almost three years ago. It is supported by empirical evidence—and now—it’s been confirmed by a peer-reviewed study published in Science, one of the world’s top scientific journals. Not only that, the new study, conducted by professors at the University of California and Harvard Business School, shows that OSHA inspections save billions of dollars for employers through reduced workers compensation costs.
The study, “Randomized Government Safety Inspections Reduce Worker Injuries with no Detectable Job Loss,” found that workplace injury claims dropped 9.4% at randomly chosen businesses in the four years following an inspection by the California OSHA program, compared with employers not inspected. Those same employers also saved an average of 26% on workers’ compensation costs, when compared with similar firms that were not inspected. This means that the average employer saved $355,000 (in 2011 dollars) as a result of an OSHA inspection. The effects were seen among small and large employers.
Translated to the nation as a whole, OSHA inspections prevent thousands of workplace injuries, while saving employers money and protecting jobs. Michael Toffel, Associate Professor of Business Administration at the Harvard Business School, estimates that OSHA inspections nationwide could be saving employers $6 billion. And this doesn’t count the costs of lost production when workers are injured or made sick by their jobs or the pain and suffering of employees that is not compensated.
Important Conclusions from the Study:
According to the researchers, “employees almost surely gain from Cal/OSHA inspections,” and there was “no evidence that inspections lead to worse outcomes for employees or employers” in terms of employment or company survival.
“The benefits of a randomized safety inspection appear to be substantial. These results do not support the hypothesis that OSHA regulations and inspections on average have little value in improving health and safety.”
The fact is OSHA inspections save lives and jobs at the same time. This is not a surprise to me. I regularly hear from employers, both large and small, that they value OSHA inspections and treat the inspector as an additional, expert set of eyes.
The findings should finally put an end to the criticisms that OSHA inspections make running a business more expensive without adding value. The results are in: OSHA saves lives and jobs!