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formation on a common basis. The need for consistency will grow if OSHA makes a conscientious effort to focus its attention on high priority areas, areas where it can be shown to have made a difference. In order to identify such areas, data on injuries and health losses and on inspections and violations will have to be merged.

OSHA retains responsibility for overseeing State programs, and for assuring that their standards do not dip below Federal levels. At present, there is no requirement that States maintain data on inspections and violations in the same form as OSHA; many do not. Consistent data bases would make it possible to draw inferences on relative performance, presently a nearly impossible task.

Data on injuries are fairly systematically generated in our system. Injuries are observable events. Moreover, they are linked through the workmen's compensation system to financial transactions. Finally, there are ongoing systems to collect such information. Data on occupationally related health losses are more difficult to come by. Losses may not show up for many years, and there may be many contributing factors which can not be disentangled. It is unlikely that it will soon be possible to assemble data on occupational health losses at the time of occurrence. The best OSHA can do is to create a system where reasonably strong inferences can be drawn.

There will be two key elements in a system to record occupational health losses: a tally of causal relationships, and an exposure index. Causal mechanisms relating occupational conditions to health loss must be inferred from substantial data sets, where available, and laboratory experimentation. Together, such studies can provide information on what levels of exposure to what types of conditions will induce what sort of health losses. It is the responsibility of NIOSH to assess causal relationships. We would urge that emphasis be placed on the final implicit step in any such determination: Assess what magnitude of health loss will be associated with any particular level of exposure.

An exposure index should be a running tally showing what type of workers (perhaps classified by age, sex, and health status) have been exposed to what intensities of health-threatening conditions. It is the objective of OSHA, of course, to reduce exposures, particularly to the more severe health threats. OSHA recognizes the need for output measures relating to exposure to health threats.203 A data base on health exposure is likely to do more than merely document OSHA's performance in dealing with health risks. The very fact of its tabulation, we suspect, would reduce health risks, by making employers aware that they were being monitored. Moreover, once concrete output measures have been defined, OSHA will likely focus more resources in the health area, and those resources will be directed more effectively.

In accord with our belief that performance will in large part follow the available indicators of outputs and inputs, we have urged that systematic cost estimates be computed for meeting alternative levels of OSH standards. Even if OSHA's mandate does not permit cost to be an explicit consideration in setting standards, we believe that the

203 Dr. Corn, in an interview, told us of his plans to tally individuals removed from various levels of exposure. We prefer a direct exposure index, since we believe it will be hard to determine if 100 individuals are removed from risk in location A whether 100 have taken their place in location B. Either index, however, would be welcome.

mere fact that information on cost is generated will insure that it plays a more significant role.

The general principle is clear. OSHA should be generating data on a systematic basis that would enable it to evaluate all aspects of its performance. This need will grow if OSHA follows the central recommendation of this report that it focus its energies where it can do the most for promoting OSH for any given level of economic cost. Capability for policy analysis

This brief study makes no claim to have reviewed all of the information that may be available on the performance of OSHA. At the very least, however, it has made a conscientious attempt to secure all of the major studies that are available. OSHA itself has not generated, at least for outside consumption, any studies that detail the major consequences of the operation of that Agency for OSH or for the use of economic resources.

By this stage of its existence, OSHA should be well equipped to document the benefits it has generated for safety in the workplace. Health benefits are more difficult to establish, largely because of the time lag. Nevertheless, some indexes of exposure to health risks obviously are needed.

The economic costs entailed by OSHA would be more difficult to tally, particularly since they would necessarily rely on estimates made by thousands, perhaps millions of different workplaces. Still, it is a disappointment that the agency has made no efforts to estimate such

costs.

OSHA has developed a management information system that regularly accumulates data on its inspections, violations, citations, penalties, followup inspections, et cetera. Moreover, it systematically secures information on accidents through the Bureau of Labor Statistics. However, there appears to have been little attempt to date to assess the future consequences of various OSHA actions.

At the beginning of 1976 a small (a few full time professionals) policy analysis operation was begun at OSHA,204 Even at full operation, this staff seems insufficient to conduct the type of policy review operations needed to direct an agency of this size in profitable directions. At present a significant proportion of OSHA's analytic endeavors, for example its inflationary impact statements, is conducted under outside contract. This may be appropriate, but in the absence of an internal policy staff capable at least of evaluating contractors' studies, it seems unlikely that analytic studies can become a significant component of OSHA policymaking.

There is a recognized need, both inside and outside of OSHA, to document the agency's accomplishments. Moreover, if the agency is to serve the American public, or even survive, it must eliminate those workplace interventions that do more to harass the employer than to promote the health and safety of the worker. It should be able to identify which types of violations of which types of standards in which types of industries are most likely to place workers in danger. The resources of the Agency at present are not directed so as to permit such determinations.

204 Interview with Joe Kirk. Director, Policy Analysis and Integration Staff, OSHA, Washington, D.C., Aug. 20, 1976.

A well developed policy analysis capability at OSHA should provide two further classes of benefits. First, it should facilitate the Agency's day-to-day pursuit of its goals. At a time when its direction and emphases may be undergoing rapid evolution, the ability to assess what each branch of the Agency is accomplishing may prove most worthwhile. Second, it should provide the Agency with the capability to engage in long-run planning. The present standards-inspectionand-fine approach to occupational health and safety is only one of the many possible strategies that Federal regulatory agencies generally. and OSHA in particular, might pursue. With the present limited analytic capabilities within the Agency, it is unlikely that a systematic long-range strategy can be formulated for assessing and experimenting with alternative approaches. OSHA should establish as a top priority the development of a policy analysis capability that would enable the Agency to formulate concrete objectives, detail performance on those objectives, evaluate alternative approaches to governmental promotion of health and safety, and develop long run plans for OSHA. (We are unhappy to report that OSHA's current head, Dr. Bingham, appears to have abandoned OSHA's fledgling policy analysis capability.)

Division of responsibility between States and Federal Government

At present 23 States have chosen to exercise their right under the OSHAct to regain responsibility for regulation of occupational safety and health. In accordance with the Act, the Federal Government assumes 50 percent of the costs of operation for State plans, and 90 percent of any initial planning costs. Originally almost all States applied 'for approval. Enthusiasm among the States now appears to be declining.

The motivation for decentralized responsibility for occupational safety and health is the traditional one within our heirarchical system of government: Returning responsibility to the lowest feasible level achieves efficiency through decentralization as well as greater sensitivity to particular local conditions and preferences. The argument for a Federal floor on OSHA standards is twofold: (1) Congress has concluded that there is a Federal responsibility to guarantee each worker a safe and healthful workplace 205 and (2) in the absence of such a floor there might be an incentive for States to engage in mutually disadvantageous competition to lower standards.206

This study has made no attempt to investigate the consequences of the current mixture of State and Federal activities. Comparison studies would be hard to conduct at this time, since State plans do not provide OSHA with the same data collected on its own activities. However, since matters of implementation-for example, frequency and targeting of inspections, propensity to cite violations, and magnitudes of fines-may affect so significantly the effectiveness of any plan, in ways at present not well understood, it would be extremely difficult

25 Cornell, Noll, and Weingast, "Safety Regulation," conclude from an investigation of information on budgetary requests and approvals that Congress has been pushing for an increased Federal role, while the Nixon and Ford administrations advocated greater decentralization.

206 If all markets were perfectly competitive, a situation of this sort could not arise. But since, for example, wages do not automatically adjust to guarantee full employment, States might find it desirable to compete for jobs by lowering costs through lowered OSHA standards.

to determine if States met the test of providing plans "at least as effective" as OSHA.

The whole matter of State plans might merit a predominantly administratively oriented investigation to see whether the mixed system is generating problems. It is difficult to find parallel experience for regulatory procedures which are left predominantly to the State in some locales, yet are predominantly Federal in others. It is at least worth considering whether States should be encouraged more strongly to adopt their own plans, or whether, in fact, we should move in the opposite direction, discouraging all but the most enthusiastic States from taking responsibility for OSHA. The simplest means to change incentives would be to change the cost-sharing formula, though some States would be unlikely to change their present choice of status even if the cost-sharing percentages went from 50-50 to 90-10 or 10-90. Reorganization

A favored way to influence the objectives and performance of an agency is to change its position within government hierarchies. It is sometimes proposed, for example, that OSHA be brought out of the Department of Labor and be made an independent regulatory agency. Such an agency, it is suggested, would have more control of its own budget and affairs, and would be less subject to various political pressures when initiating programs. To investigate the ramifications of a proposal of this sort would require a sensitive and lengthy political and bureaucratic analysis, and is thus well beyond the confines of this study. One point can be made: Any reorganization of this sort would require great energies. Even if gaining independent status would be desirable, on its own, it may be undesirable if the required energies would be drained from other reform efforts.

Further study should also be directed at the relationships between. OSHA and its cooperating organizations, NIOSH, OSHRC and NACOSH. Most significantly, it is frequently alleged that NIOSH belongs within OSHA. At present, it is evident that NIOSH is not providing OSHA all of the information it needs for setting standards. on a timely basis. NIOSH is certainly not equipped to investigate economic costs, or to relate standard setting to performance in the field. A major consideration in any investigation of the organization of Federal efforts for OSH might be the appropriate location of NIOSH.

CONCLUDING REMARKS

OSHA was created to respond to what the House Committee on Education and Labor termed the "on-the-job health and safety crisis." 207 Congress hoped that by establishing a Federal agency to regulate OSH conditions it could "reduce the number and severity of work-related injuries and illnesses." 208 It is now evident, after 7 years, that no dramatic improvements have been achieved. Indeed, to date there has been no solid documentation that OSHA has yielded any gains in safety or health. This result is less discouraging than it sounds. Data are inadequate; small gains would be difficult to docu

207 House Education and Labor Committee report on the OSHAct, reprinted in BNA, Job Safety and Health Act of 1970, p. 152.

208 U.S. Senate Committee on Labor and Public Welfare, Legislative History of the OSHAct, p. 141.

ment. Dramatic gains should not have been expected even under the most favorable circumstances. Only a small fraction of America's workplaces have been subject to inspection; deterrent effects for uninspected workplaces have been insignificant, given the low scale for fines. Moreover, OSHA has focused its attention on capital equipment, having virtually no control over such factors as worker or supervisory behavior, which contribute significantly to OSH.

Any initial expectations that OSHA would make major inroads against occupational injuries and illnesses were totally unrealistic. Fortunately for the present image of the Agency, its OSH outputs are difficult to measure. Strong advocates of OSH regulation can be somewhat assuaged by monitoring the Agency's input levels, particularly since they are likely to overestimate the returns from such inputs.

The hostility of the business community, and indeed even of some labor representatives, to OSHA would have been more difficult to predict. Most employers in the United States have never met an OSHA inspector. Few have had to pay any significant fines, or incurred major expenses for correcting violations. It seems that OSHA's bad reputation has traveled through chains of anecdotes. Uninterpretable or misguided standards, fines for conditions only most indirectly related to safety or health, and an occasional preposterous and expensive imposition to correct a violation have all been cited in both trade journals and the popular press. The low likelihood of inspection has contributed to feelings that the whole system is somewhat random and therefore unjust.

This situation has evolved at the same time that the public has become increasingly hostile to Government intervention into the economy and into its daily lives.209 OSHA almost serves as a paradigm in this regard. The Agency is in an unenviable political situation, generating frequent and bitter complaints yet yielding relatively little of the benefits its supporters expected.

Rather than continue on the course of its first 7 years, we would argue, OSHA should be disbanded. Safety and health in the workplace would not suffer measurably, significant private and governmental resources would be saved, and an agency perceived primarily as a tool of Government harassment would be eliminated. Fortunately, these are not the only two courses available, and we would urge that some basic changes be considered.

OSHA, and other Federal agencies promoting OSH, should channel their resources in three directions: (1) Generating, gathering, and disseminating information about conditions that promote OSH; (2) increasing the use of OSH-promoting incentive mechanisms as an alternative or complement to direct regulation; and (3) intervening in the market directly in those areas, and only in those areas, where there is a demonstrated relationship between the means of OSHA's intervention and safety and health. Regulatory procedures and standards which can not be shown to be linked to occupational safety and health should be written off the books. Finally, we would urge that

200 In a series of lectures entitled "The Public Use of Private Incentives" (Godkin lectures. Harvard University, Nov. 29-Dec. 7, 1976) Charles Schultze, now Chairman of the Council of Economic Advisers, noted this growing dissatisfaction with Government regulation. He argued that in many areas, quite possibly including occupational safety and health, the Government should abandon the "command and control mode" of direct regulation, employing instead various incentive mechanisms.

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