Regulatory actions, when carefully designed, serve critical societal purposes, such as safeguarding workers, public health, and the environment. However, these regulations come with compliance costs that can burden businesses, leading to missed opportunities and higher operational expenses. Balancing these dynamics remains a persistent challenge.

For decades, the scope of U.S. regulations has expanded, increasing the financial demands on the economy. While these workplace rules aim to mitigate risks and liabilities, thus lowering costs to businesses, communities, and governments, the debate on regulatory efficiency persists. For instance, the 2020 federal budget revealed that OSHA’s enforcement and consultative services cost employers approximately $5 annually per business. This modest investment underscores the agency’s pivotal role in worker health and safety.

Regulatory Shifts Under the Trump Administration

The first Trump administration marked a significant shift toward deregulation. In 2017 and 2018, federal agencies enacted more deregulatory measures than new regulations. This trend resulted in net savings of $8.1 billion and $23 billion in those fiscal years, respectively. Despite these cost reductions, understanding both direct and indirect costs of workplace incidents remains essential.

Direct costs include measurable expenses such as medical treatments, workers’ compensation claims, and property damage. Meanwhile, indirect costs, though harder to quantify, often surpass direct costs. These encompass productivity losses, workforce training, hiring expenses, legal fees, incident investigations, and reputational damage. Comprehensive evaluations of these costs are vital for businesses to cultivate robust safety cultures and reduce risks.

The National Safety Council (NSC) reported a total cost of workplace injuries in 2022 amounting to $167 billion. This figure included wage and productivity losses ($50.7 billion), medical expenses ($37.6 billion), and administrative costs ($54.4 billion). Additionally, uninsured employer costs were estimated at $15 billion. On a per-worker basis, the economic burden of workplace injuries averaged $1,040 annually.

Current Trends and Projected Developments

In 2024, the second most disabling workplace injury — falls at the same level — had direct costs of $9.99 billion, while overexertion injuries from external sources reached $12.5 billion. Other notable injury categories included falls from elevated levels, contact with machinery or equipment, and repetitive strain injuries. These figures underscore the high costs of failing to implement effective safety measures.

The anticipated return of a Trump administration is likely to revive policies emphasizing collaboration with businesses over enforcement. During the prior administration, OSHA’s inspector count fell to 790, leading to fewer inspections. Future staffing reductions, deregulatory measures, and a leaner regulatory agenda are expected, potentially halting initiatives like the proposed OSHA heat stress rule, which addresses risks to workers exposed to temperatures above 80°F.

State-Level Impact and Variations

State plans, permitted under the Occupational Safety and Health Act’s Section 18, allow individual states to enforce their own health and safety programs, provided they are at least as effective as federal OSHA standards. States such as California, Oregon, and Washington are poised to lead aggressive enforcement efforts, particularly in the face of federal deregulation. These states may adopt stringent rules for workplace hazards, heat stress prevention, and emergency responses.

For example, California’s Division of Occupational Safety and Health (Cal/OSHA) has consistently pushed for advanced worker protections. Governor Gavin Newsom’s administration has actively sought to “Trump-proof” state policies, ensuring stringent compliance despite potential federal rollbacks. Similarly, other progressive states may drive localized improvements that could influence broader national standards.

The Economic and Ethical Imperative for Safety

Deregulation may temporarily ease business costs but carries risks of increased workplace injuries, illnesses, and fatalities — ultimately creating higher long-term expenses. For instance, workplace fatalities rose to 5,333 in 2019, with significant increases among older workers and Hispanic or Latino employees. Additionally, reduced inspection rates and weakened enforcement signal a potential decline in workplace safety standards.

While deregulation might appeal to businesses seeking short-term savings, the cumulative costs of inaction, including workers’ compensation claims, litigation, and damage to employee morale, often outweigh immediate gains. Sustainable health and safety practices are not merely regulatory compliance obligations but essential investments in workforce well-being and operational efficiency.

Conclusion

The debate on OSHA’s regulatory role reflects broader tensions between economic efficiency and public welfare. Although deregulation may reduce immediate compliance burdens, its broader implications necessitate careful consideration. Employers, labor organizations, and policymakers must collaborate to address evolving safety challenges, balancing economic and ethical imperatives. Ultimately, proactive investment in workplace safety can mitigate risks, reduce costs, and foster a culture of resilience and responsibility rather deregulation of OSHA standards.

References:

Direct And Indirect Costs Of Workplace Accidents, Hamza Ali, hseblog.com. April 26, 2023

Work Injury Costs and Time Lost, Injury Facts, National Safety Council, 2022.

Direct Costs of Top 10 Most Disabling U.S. Workplace Injuries in 2024, Statista, https://www.statista.com/statistics/711311/direct-costs-of-top-disabling-workplace-injuries-in-the-us/

National Census of Fatal Occupational Injuries in 2019,  Bureau of Labor Statistics News Release, U.S. Department of Labor, December 16, 2020.

Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings Rulemaking, OSHA, 2024, https://www.osha.gov/heat-exposure/rulemaking

Seyfarth Shaw, Radical Change at OSHA During Second Trump Administration?, JD Supra, December 5, 2024

Conn Maciel Carey, Trump 2.0, OSHA: Expect Shifts in Federal Enforcement and Rulemaking Priorities As Well As More Aggressive State Plan Enforcement, November 13, 2024