OSHA’s “Recession Tax”

OSHA claims their fines are primarily based the ‘gravity’ of a violation which is judged by both its severity and the amount of employees that could potentially be affected. Conventional wisdom tells us that high unemployment should result in lower overall OSHA fines as less employees are working and at risk for injury. The opposite is true however, with annual OSHA fines sharing a high level of correlation with the U.S unemployment rate over the last two decades.

This ‘recession tax’ seems to transpose party lines, with dramatic OSHA fine increases taking place during the onset of the early 90’s recession under George Bush Sr. as well as ‘The Great Recession’ under Barack Obama. Notably, Ronald Regan did not indulge in this practice during the Early 1980s recession.

 

It’s no coincidence by any measure, with presidents raising or lowering OSHA fines based on the governments revenue requirements. The government makes less money when the economy is performing poorly (and spends more, too) thus prompting the increase in fines. The below OSHA fines timeline indicates the onset of each recession along with fine increases that followed immediately after.

 

 

 

Since OSHA fines are used as a revenue generation vehicle, it casts doubt over the agencies true purpose and core goals.  Employers have long complained about OSHA inspectors nitpicking ridiculous violations, such as the failure to place a MSDS label on a bottle of window cleaner, in order to ramp up fines.  The three strategic goals listed on the OSHA website are:

Goal #1: Reduce occupational hazards through direct interventions.

Goal #2: Promote a safety and health culture through compliance assistance, cooperative programs and strong leadership

Goal #3: Maximize effectiveness and efficiency by strengthening capabilities and infrastructure

Not surprisingly, this list makes no mention of OSHA’s core purpose: Generate revenue for the U.S government.

 

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