Hannah Clark HR Extra Credit Article Summary The Declining Effects of OSHA Inspections on Manufacturing Injuries, 1979 to 1998

by Wayne B. Gray and John M. Mendeloff: Article 8 This paper studied the declining effects of safety inspections done by the Occupational Health and Safety Administration (OSHA) on injuries. The metric used for effectiveness is lost workday case rate, based on an annual report from the Bureau of Labor Statistics, called the Survey of Occupational Injuries and Illnesses. There are multiple ways OSHA can affect injuries. First, OSHA provides information to employees and their employers through training activities and consultations, and by spreading educational materials. Most of the organizations resources, however, are devoted to OSHAs enforcement programs. The OSHA inspections and the threats of penalties for noncompliance can push employers to improve safety programs overall, and the threat of inspection and generate compliance to avoid anticipated penalties, even though actual OSHA inspection rates, especially among companies with low injury rates, are very low. The authors created an equation that summarized a bunch of risk factors that might influence the riskiness of working at a plant. Theres the inherent hazardousness of working at the plant, the degree of the workers experience, the degree of the workers fatigue, the degree of general deterrence caused by OSHA inspections, the probability of inspection, the expected penalty for a violation an inspection might cause, and the history of past inspections at this plant. If a plant were to experience unusually high injuries at a certain period of time, it would lead to increased attention on the plant during the next period of time. This could also lead to a negative autocorrelation in what the authors call the unobserved random element of the injuries. The authors focused on examining the effects of inspections based on both the inspections themselves and the characteristics of the firms being inspected.

The relevant characteristics of the firms being inspected are whether a penalty was given, whether that inspection was pre-programmed or caused by a complaint, whether the inspection was for safety or health, and whether the plan was in a state designated as Federal OSHA or a State Plan state. Theres also a degree to which plants could vary in their degree of their response to OSHA influence. The demand for safety will depend on how strong the incentives provided by institutional arrangements at the firm are. Smaller firms, for example, tend to be under less media scrutiny than larger firms, and large firms run much larger damages via public relations costs. Previous studies have indicated that small establishments have much higher fatality rates than larger firms do. Larger firms also tend to have been around for longer, and therefore are likely to have been through OSHA inspections before, which would diminish the impact of a previous inspection. Firms with unionized workforces are also much more likely to be larger firms. Unions, which can collectively bargain over health and safety conditions, are likely to have lower fatality records. Unions also tend to respect median preferences instead of those of the marginal worker, meaning that wage premiums at risky workplaces tend to be significantly higher at unionized workplaces. Unionized workplaces are also more likely to be inspected, and those inspections are also more likely to be thorough and cite more violations. Unions also have their own educational programs to prevent safety hazards, which would also potentially decrease fatalities. Industry factors can also play a role, in some industries more than others. Industryspecific technology can also affect costs of injuries and prevention. For example, industries like logging, which involve safety in outdoor environments, can be harder to maintain than those working in more closely-knit units. OSHA standards can also be more relevant to certain industry hazards than in others.