Freeman

ARTICLE

OSHA at Home

OSHA Imposes Billions in Compliance Costs and Confers Zero or Negative Benefits

AUGUST 01, 2000 by CHARLES W. BAIRD

Filed Under : Labor Unions

About 16 million employees do some work at home for their employers, and that number is growing rapidly. Increasingly sophisticated computers, software, faxes, and modems have made telecommuting a realistic and desirable option for many employers and their workers.

Late last year Richard Fairfax, the Occupational Safety and Health Administration’s director of compliance, issued an advisory letter stating that employers are just as responsible for the safety and health of employees who work in their homes as they are for employees who work on company premises. OSHA personnel had been working on this letter for two years. If implemented, the advisory could mean that such employees would be subject to unannounced OSHA inspections of such things as lighting levels, doorway dimensions, bathroom facilities, storage of household chemicals, and of whether desks, chairs, and other equipment were conducive to employee safety.

We have been lulled into accepting many governmental intrusions into our privacy, such as government’s annual inspection of our incomes, but it seems we aren’t yet ready to be coerced into opening our homes to OSHA. To the chagrin of Mr. Fairfax, his letter caused a maelstrom of protest. On January 4 Secretary of Labor Alexis Herman forced OSHA to retreat for now. Seeing an opportunity for political gain, Peter Hoekstra, the head of the House subcommittee responsible for oversight of OSHA, scheduled a hearing to publicize this extraordinary blunder.

On February 25 the head of OSHA issued a directive that explicitly exempts “home offices,” but not “other home-based worksites,” from inspections. Lest you think this is a victory for privacy, remember that bureaucrats always seek to expand their empires and this is merely an agency directive. OSHA bureaucrats are unlikely to discard two years of work merely because the public doesn’t agree with them. In their minds they are anointed to lead, not follow, the public. Any agency directive can be modified, interpreted, and reinterpreted to fit the moment.

The directive states, “Employers are responsible in home worksites for hazards caused by materials, equipment, or work processes which the employer provides or requires to be used in an employee’s home.” Inasmuch as OSHA is currently promulgating an ergonomics rule ostensibly to protect workers against “work-related musculoskeletal disorders” such as carpal tunnel syndrome, it isn’t hard to imagine that OSHA could soon classify computers as hazardous equipment. Since computers are central to telecommuting, the “home office” inspection exclusion would inevitably break down.

Senator Robert Wagner, author of the National Labor Relations Act (NLRA), coined the phrase “camel’s nose under the tent” to characterize his strategy of expanding government regulation little by little until conditions were right to finish the job. Inspection of “other home-based worksites” is OSHA’s camel’s nose. If people are seduced into accepting this idea, inspections of all home worksites will soon follow. If Representative Hoekstra is serious about keeping OSHA out of homes, he should pursue legislation that keeps OSHA out of all home worksites. At the behest of labor unions President Clinton would veto the bill, but he isn’t going to occupy the White House much longer. Besides, it would be refreshing to see Congress take a principled stand on something as basic as privacy at home.

The Unions’ Stake

Union officials are delighted at the prospect of OSHA inspections of home worksites because they oppose most telecommuting. This episode has created a cloud of uncertainty concerning employer liability for work-related injuries and health problems at home. In response, fewer employers will permit telecommuting and many of those who already do will do less of it.

Telecommuting is anathema to unions for at least two reasons. First, at-home workers are difficult to organize. NLRA makes it almost impossible for workers to avoid union organizers on employers’ premises, but workers are still free to exclude union organizers from their homes. Second, telecommuting is an example of mutually beneficial arrangements between individual workers and employers. Unions depend on the myth that labor and capital are natural class enemies. If more and more workers come to recognize that mutually beneficial deals can be worked out without unions, they may come to doubt that unions are necessary at all.

Labor unions were principal proponents of the original Occupational Safety and Health Act in 1970. They argued that workers needed government protection from workplace fatalities and injuries because greedy capitalists would otherwise sacrifice the well-being of workers on the altar of profits. It didn’t matter to them then that workplace fatalities had been steadily declining since 1937 because of improvements in safety technology and changes in the occupational distribution of workers. Nor does it matter to them now that OSHA has had no measurable effect on that continued decline. To unions OSHA is not about worker safety and health. It is about preventing union-free workplaces from gaining any competitive advantages over union-impaired ones.

Employers have an interest in making work processes and environments safer and healthier for workers. First, employers with good records pay lower workers’ compensation premiums than those with poor records. Second, employees are willing to work for less in safe and healthy work environments than in unsafe and unhealthy ones. In 1993 total workers’ compensation premiums amounted to $55 billion and wage premiums received by workers in risky jobs amounted to $200 billion. Employers are eager to minimize these expenditures while still getting their work done.

Unionized firms are typically impaired in their ability to discover and implement improvements in work processes and environments. It is an unfair labor practice for an employer unilaterally to implement such changes. All work conditions and processes are stipulated in formal contracts. Experimentation is impossible without the consent of union officials, who rarely give it, especially when any workers may feel threatened by changes in the status quo.

Command-and-control regulation stifles entrepreneurial discovery of better ways to do things. Unions count on OSHA to impose workplace regulations on union-free firms that will make it as difficult for them to innovate as it is for union-impaired firms to innovate. If it weren’t for OSHA, it is likely that at least some union-free firms would have better worker safety and health records than they do. Without OSHA, the uninterrupted decline in workplace fatalities since 1937 may have accelerated after 1970.

In short, far from allowing OSHA to extend its reach into private homes, Congress ought to abolish the agency. Its official annual budget is now $348 million, and it imposes billions more in compliance costs throughout the economy. In return it confers zero or negative general benefits.

ASSOCIATED ISSUE

August 2000

ABOUT

CHARLES W. BAIRD

Charles Baird is a professor of economics emeritus at California State University at East Bay.

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