Behavioral Economics Drives New Safety Approach: OSHA Chief

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By Stephen Lee

June 29 — As he winds down his final year in office, the head of the Occupational Safety and Health Administration says he’s focusing on the findings of behavioral economics to nudge employers into improving their safety performance.

“We know that employers don’t want to be seen as laggards,” David Michaels said June 28 at the American Society of Safety Engineers’ annual conference in Atlanta. “They want to be seen as top performers. A top performer has a low injury rate. Any employer with a high injury rate, you know there’s poor management there.”

That thinking provides the rationale behind OSHA’s plan to post employers’ injury logs on the internet starting Jan. 1, 2017, under its new recordkeeping rule.

Similarities to Restaurant Grades

To illustrate, Michaels compared OSHA’s postings to the letter grades some cities give restaurants, which must be displayed in their windows. Studies show that restaurants with “C” grades lose revenue, while those with “A” grades gain revenue, he said.

After one year, however, restaurant owners with poor grades clean up their kitchens and the number of establishments with “A” grades rises, Michaels said. Hospitalizations for food-borne illnesses also drop, he said.

“That’s behavioral economics. It’s telling these restaurants, if they want to make a profit, if they want to be seen as a good place to eat, they better get an ‘A,' ” Michaels said. “So I’m now applying this to safety, hoping for that bigger impact.”

Approach Not New

His embrace of behavioral economics isn’t new. Early in his tenure as OSHA chief, Michaels raised the ire of the business lobby by saying he wanted to “shame” employers by publicizing notable violations.

For the strategy to work, however, OSHA must gather complete and accurate data, which means workers must be free to report their injuries, Michaels said.

To that end, another provision of the recordkeeping rule mandates that starting Aug. 10, employers must tell workers about their right to report work-related injuries and illnesses free from retaliation.

Justice Department Praised

Also during his remarks, Michaels applauded the Justice Department for recently agreeing to take on more worker safety cases as criminal matters.

“The Justice Department will take our referrals much more seriously now,” he said.

OSHA regional staff have met with “almost every” U.S. attorney across the country, Michaels said.

He also said he was “very pleased” to see former Massey Energy chief Don Blankenship sent to jail for conspiring to violate mine safety regulations. Blankenship was sentenced to one year in prison on April 6.

Growing Frustration

Michaels further expressed frustration that worker deaths and injuries don’t get more attention.

By contrast, he pointed to the Takata airbag recall, which has prompted the recall of tens of millions of airbags around the world and spurred chief executive officer Shigehisa Takada to offer his resignation, despite the fact that 14 people have died worldwide since the defects were identified more than five years ago, Michaels said.

The same number of workers die every 26 hours in American workplaces, said Michaels.

“There’s something wrong,” he said. “We don’t put enough emphasis, we don’t put enough care, into protecting workers. I’m not sure why that is. But that has to change.”

Advice for Successor

When asked what message he would like to pass along to his successor, Michaels, the longest-serving OSHA head in the agency’s history, said he would stress the need for a balanced approach.

“There’s always this fight in Washington—do more enforcement, do more compliance assistance, do more campaigns,” Michaels said. “You have to do them all. Every employer is different. There’s a whole range of them. If you want to impact all employers, you have to think about all the different approaches.”

Michaels, who returns to George Washington University’s School of Public Health when his term expires, also said he already reflects fondly upon his years as OSHA chief.

“I’ve just enjoyed this job tremendously,” he said.

To contact the reporter on this story: Stephen Lee in Atlanta at slee@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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