Trade-offs: the hidden cost of safety regulation
Your salary is only a fraction of the cost of your employment. Employers must factor in payroll taxes, health-care benefits, and days of vacation and sick leave to calculate your total cost to their budget. On top of this, any other regulation the government imposes upon the company factors not only into your employer's bottom line, but into yours as well.
I'm not just talking about Social Security reducing your take-home pay by as much as 14 percent. I'm also talking about all the safety regulations the government imposes, which add real expenses to the cost of doing business. When those costs are recognized and considered, the value of "saving" lives comes into question.
A 1986 study by noted fiscal scholar John F. Morrall III found that regulations on asbestos by the Occupational Safety and Help Administration (OSHA) saved 74.7 lives annually. While some will applaud, presuming that all human life is priceless, it is the very value of human life that also compels us to look at the costs and trade-offs involved.
The cost of saving these 74.7 lives annually was $6.4 billion in 1986. That's $89.3 million per life. Today that would be $172 million per life saved, or a total of $12.8 billion. Interestingly enough, that is about half the total annual cost of America's food stamp program, which helps more than 25 million Americans afford to feed themselves.
Recent construction deaths in Las Vegas have prominent politicians like Sen. Harry Reid (D-Nevada) clamoring for more safety regulations, no matter the cost. Reid as well as Sens. Hillary Clinton and Barack Obama and the nannies at OSHA want more safety nets, harnesses and other features, which will lead to higher costs of employing construction workers. Higher costs either mean lower pay for that worker, higher prices for the buyer (of the finished project), or higher unemployment rates for construction workers.
Ultimately our political leaders will have to ask themselves whether or not the mere possibility of saving a life is worth the risk of putting other people out of work, or of removing food from their tables.
To some, these may seem dark thoughts. In reality, however, there are always trade-offs that must be managed in public policy. If we spend money to add additional safety for construction workers, that money cannot be spent elsewhere – for reducing poverty, feeding the hungry or improving education.
Trade-offs are a part of reality, whether we like them or not.