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Saving Lives or Wasting Resources? The Federal Mine Safety and Health Act, Cato Policy Analysis No. 453

Saving Lives or Wasting Resources? The Federal Mine Safety and Health Act, Cato Policy Analysis No. 453

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Published by Cato Institute
Executive Summary

Most Americans take for granted the federal

government's role in protecting workers from

injuries that might occur on the job. The popular

notion is that, without the Occupational

Safety and Health Administration and its sister

agency, the Mine Safety and Health

Administration, some companies, perhaps many,

would not invest in safety, which would lead to a

rise in workplace accidents in the United States.

The problem with the popular perception is that

it is based more on faith in beneficent government

than on facts about government intervention

in workplace safety.

Although MSHA has claimed success, there is

no reliable evidence indicating that the Federal

Mine Safety and Health Act of 1977 has made

the nation's mines any safer. It is actually more

likely that the act's substitution of rules for

results, of government vigilance for employee

vigilance, and of sanctions for cooperation has

slowed the historic trend toward safer mines.

Despite the questionable benefits bestowed by

the act, special interest groups and MSHA have

successfully defended it against proposals for

reform. As a result, consumers and taxpayers are

left paying the substantial direct and indirect

costs of federal intervention.

The best solution may be to repeal the Mine Act. Contrary to popular belief,

there are substantial incentives in place that encourage mine operators to make

investments in safety. One of the most notable incentives is the compensating

wage differentials that miners demand for undertaking more hazardous work. By

respecting the risk-for-pay decisions made by individual miners, the federal

government might be able to achieve its objective of making the nation's mines

safer.
Executive Summary

Most Americans take for granted the federal

government's role in protecting workers from

injuries that might occur on the job. The popular

notion is that, without the Occupational

Safety and Health Administration and its sister

agency, the Mine Safety and Health

Administration, some companies, perhaps many,

would not invest in safety, which would lead to a

rise in workplace accidents in the United States.

The problem with the popular perception is that

it is based more on faith in beneficent government

than on facts about government intervention

in workplace safety.

Although MSHA has claimed success, there is

no reliable evidence indicating that the Federal

Mine Safety and Health Act of 1977 has made

the nation's mines any safer. It is actually more

likely that the act's substitution of rules for

results, of government vigilance for employee

vigilance, and of sanctions for cooperation has

slowed the historic trend toward safer mines.

Despite the questionable benefits bestowed by

the act, special interest groups and MSHA have

successfully defended it against proposals for

reform. As a result, consumers and taxpayers are

left paying the substantial direct and indirect

costs of federal intervention.

The best solution may be to repeal the Mine Act. Contrary to popular belief,

there are substantial incentives in place that encourage mine operators to make

investments in safety. One of the most notable incentives is the compensating

wage differentials that miners demand for undertaking more hazardous work. By

respecting the risk-for-pay decisions made by individual miners, the federal

government might be able to achieve its objective of making the nation's mines

safer.

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Published by: Cato Institute on Mar 26, 2009
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Most Americans take for granted the federalgovernment’s role in protecting workers frominjuries that might occur on the job. The popu-lar notion is that, without the OccupationalSafety and Health Administration and its sisteragency, the Mine Safety and Health Administration, some companies, perhaps many,would not invest in safety, which would lead to a rise in workplace accidents in the United States.The problem with the popular perception is thatit is based more on faith in beneficent govern-ment than on facts about government interven-tion in workplace safety. Although MSHA has claimed success, there isno reliable evidence indicating that the FederalMine Safety and Health Act of 1977 has madethe nation’s mines any safer. It is actually morelikely that the act’s substitution of rules forresults, of government vigilance for employee vigilance, and of sanctions for cooperation hasslowed the historic trend toward safer mines.Despite the questionable benefits bestowed by the act, special interest groups and MSHA havesuccessfully defended it against proposals forreform. As a result, consumers and taxpayers areleft paying the substantial direct and indirectcosts of federal intervention.The best solution may be to repeal the Mine Act. Contrary to popular belief, there are sub-stantial incentives in place that encourage mineoperators to make investments in safety. One of the most notable incentives is the compensatingwage differentials that miners demand forundertaking more hazardous work. By respect-ing the risk-for-pay decisions made by individualminers, the federal government might be able toachieve its objective of making the nation’smines safer.
Saving Lives or Wasting Resources? 
The Federal Mine Safety and Health Act 
by C. Gregory Ruffennach
_____________________________________________________________________________________________________
C. Gregory Ruffennach is an attorney specializing in mineral law in Durango, Colorado.
Executive Summary 
No. 453September 19, 2002
 
We shall not grow wiser before we learnthat much that we have done was veryfoolish.F. A. HayeThe 1977 Federal Mine Safety and HealthAct (hereinafter Mine Act), which is rapidlyapproaching its 25th anniversary, was passedby Congress “to provide a more effectivemeans” of preventing death and serious phys-ical injury in the nations mines.
1
To that end,the act created a federal law enforcementscheme consisting of regulation, inspection,and sanction. The tripartite forced compli-ance scheme was supposed to be more effec-tive, not only than its forerunner, the FederalCoal Mine Health and Safety Act of 1969(hereinafter Coal Act), but also than the otherfederal mining laws that preceded it. Prior tothe 1969 Coal Act, the federal government didnot take a forced compliance approach tomine safety. Although the Bureau of Mines,which was created as a federal agency in 1910,had limited enforcement authority at certaincoal mining operations by 1952, it was pre-dominantly an informational agency.The Labor Department, whose MineSafety and Health Administration is chargedwith implementing the Mine Act, has alwaysmaintained that the forced complianceapproach required by the act has been moreeffective than the informational approachtaken by the Bureau of Mines. In fact, formerlabor secretary Robert Reich has gone so faras to hold out the Mine Act as the epitome of effective government enforcement:It’s become fashionable lately to dumpon Washington, to say the federal gov-ernment is just too nosy, too demand-ing, makes too many rules. The triumphof the mine safety and health programserves to remind us of the good thatgovernment can do.
2
Similarly, Davitt McAteer, who held the topspot in MSHA under the Clinton adminis-tration, has repeatedly boasted that the MineAct is a “scheme that works.”
3
Regardless of whether or not it is fashion-able to “dump on” the federal government asReich contended, it is certainly not fashion-able to question the federal government’s lawenforcement role in mine safety. As Rep. CassBallenger (R-N.C.), chairman of the HouseSubcommittee on Workforce Protections,noted during a congressional hearing on theMine Act in 1998,I am well aware of the fact that even toraise these issues is to invite criticismand demagogue, as being uncaringabout miners, especially undergroundcoal miners, whose work, I know, is haz-ardous and difficult.
4
Ballenger was speaking from experiencebecause, three years earlier, his modest pro-posal to reform the Mine Act along with theOccupational Safety and Health Act of 1970was characterized by organized labor as “theWorkplace Death and Injury EnhancementAct (DIE Act).”
5
Nonetheless, after more than a quarter of acentury of federal policing of the nation’smines, it is appropriate to attempt to deter-mine whether the Mine Act has provided amore effective means of preventing minerdeaths and injuries than did the information-al approach that predated it. The determina-tion is legitimate not only from a statutoryperspective but also from the larger perspec-tive of wisely allocating society’s scarceresources. Although proponents of the MineAct often tout its purported lifesaving featuresand even attempt to identify specific individu-als who could have been saved with more vig-orous enforcement,
6
it is essential to keep inmind that the resources dedicated to the pro-tection of adult miners at the workplace areresources that cannot be used for other pur-poses, such as preventing the accidentaldeaths of children at home. While “we mightall be happier in a world where there were nosuch constraints to force us into choices andtrade-offs that we would rather not face,
7
thefact of the matter is that, in a world with finiteresources, such tradeoffs are inescapable.
2
Resourcesdedicated to theprotection of adult miners atthe workplaceare resourcesthat cannot beused for otherpurposes.
 
Forced compliance has not been more effec-tive in preventing death and serious physicalinjury in the nation’s mines than the policy of information that preceded it.
8
Since the turn of the 20th century, fatalities in the nation’s mineshave been steadily declining irrespective of fed-eral police intervention. In fact, on a fatality permillion ton basis, it appears that the trendtoward fewer fatalities in the coal mines actual-ly slowed after the forced compliance approachwas introduced.Although that observation may come as asurprise to people like Reich, who believe inthe capable beneficence of the federal gov-ernment, it will not surprise those in the min-ing industry who recognize that forced com-pliance does not equate to improved safety.The Mine Act attempted to resolve a per-ceived, but probably not real, economic prob-lem with a legalistic solution. The legalisticapproach, which substituted rules for results,inspector vigilance for employee vigilance,and sanctions for cooperation, was inferior,in every respect, to the informationalapproach taken by the Bureau of Mines.Obviously, a legalistic approach thatyields no measurable benefits in terms of lives saved while diverting resources fromwealth creation and even safety-related activ-ities is not the best use of societal resources.In this regard, the necessary corollary to thesentiments expressed by Reich is that any“good that the government can do” is onlygood for those who reap the benefits. TheMine Act benefits Labor Departmentemployees, organized labor institutions,large unionized mine operators, and, of course, attorneys,
9
to the detriment of thepeople who might otherwise benefit if thoseresources were put to other uses.Because the Mine Act fails to achieve itsstated objective and squanders society’sscarce resources, Congress should repeal, orat least significantly amend, it.
10
In theabsence of federal policing, responsibility forthe safety of the nation’s mines would fall onAmerican society, state and local govern-ments, and ultimately the individuals whomake up the mining industry. In the eventthat there is a demonstrated market failureonce the forced compliance approach isabandoned, the federal government shouldlimit its role to the tried and true approach of providing information and, perhaps, creatingmonetary incentives for additional invest-ments in workplace safety. However, lawenforcement, in the limited circumstances inwhich it is appropriate, should be left to localauthorities, which are accountable to thecommunities that they serve.
The Emotional Origin of Safety Regulation
The origin of federal police interventionin the nation’s mines was, in large part, theNovember 1968 explosion in Farmington,West Virginia, that fatally injured 78 coalminers.
11
Unfortunately, the Farmingtonexplosion was not the first or even the worstcoal mine disaster in our nation’s history.According to MSHA, “the deadliest year” inU.S. coal mining history was 1907, when3,242 deaths occurred and a single mineexplosion killed 358 people near Monongah,West Virginia.
12
Despite the tragic number of deaths, mine disasters, such as Farmingtonand Monongah, were not even the largestcontributors to the loss of life in the nation’scoal mines.
13
The Farmington disaster was specialbecause it was the first mining disaster thatreceived nationwide media coverage.According to one account, “The resolution of the disaster . . . played out in the living roomsof America” and “created a media circus thatwould measure up to anything generatedsince.”
14
Congress, responding in large part to thepublicity that the disaster received, convenedhearings on coal mine safety and health. Thefocus of the congressional hearings was noton the testimony of safety professionals,actuaries, statisticians, and economists buton the testimony of “daughters and wives” of coal miners who had perished in theFarmington mine.
15
Such emotional testimo-
3
Forced compli-ance has not beenmore effective inpreventing deathand serious phys-ical injury in thenation’s minesthan the policy of information thatpreceded it.

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