Is Safety Cheaper?

In a Randian world (think Paul or Ayn), government regulations are a drag on individual liberty and creativity, an economy-killer, the antithesis of the rugged American entrepreneurship. In the real world, government oversight can make the workplace safer, and cheaper to run – so says a    researcher at that bastion of liberalism, the Harvard Business School.

In the May edition of Science, Michael Toffel, and his colleagues David I. Levine of the University of California Berkley, and Matthew Johnson of Boston University, presented the results of a data analysis of 409 California companies, selected from industries with high injury rates for random inspections by the state’s Division of Occupational Safety and Health. The trio found that inspections actually resulted in a 9.4 percent decline in injury rates and a 26 percent reduction in injury costs, when compared to a matched cohort of 409 California companies that were eligible but not selected for random OSHA inspections.

Further, “we find no evidence that these improvements came at the expense of employment, sales, credit ratings, or firm survival,” the researchers said. Continue reading