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Inspections Improve Bottom Lines, Study of Cal/OSHA Results Finds

Tuesday, June 5, 2012

By Bruce Rolfsen  

Businesses that underwent state safety inspections in California saved money, on average, because the reviews lowered workers' compensation and other medical costs, according to a study published May 18 in Science magazine.

Employers saw a 26 percent drop in injury-related costs and a 9.4 percent decline in injury rates in the four years following inspections, the report found.

And when the authors, three professors from Harvard Business School and the University of California's Hass School of Business, looked at whether inspected employers were more likely to go out of business or experience a drop in sales than uninspected establishments, the researchers found no significant difference.

“We were surprised by the magnitude of the effect,” Michael Toffel, an associate professor at Harvard Business School, told BNA May 21 about the inspection results.

The study, Randomized Government Safety Inspections Reduce Worker Injuries With No Detectable Job Loss, examined 409 companies inspected by the California Division of Occupational Safety and Health from 1996 to 2006. The authors compared how those employers fared with results at similar establishments that were not inspected.

The researchers decided to focus on California inspections because Cal/OSHA has a program that randomly inspects employers in industries with high injury and illness rates, even if there are no reported injuries or complaints at the businesses, Toffel said. The state's size ensures a large and diverse selection of establishments under a single set of rules.

David Michaels, assistant secretary of labor for occupational safety and health, in a May 21 blog post, said the study findings supported his argument that “OSHA doesn't kill jobs; it helps prevent jobs from killing workers.”

At the U.S. Chamber of Commerce, Marc Freedman, executive director of labor law policy, challenged the notion that more inspections are better. “The study says nothing about comparing outcomes from more enforcement with outcomes from more resources being put into cooperative programs,” he told BNA May 21.

 

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