Deregulation, OSHA, and the Battle of Short- vs. Long-Term Consequences
Given the current administration’s focus on deregulation and deep personnel reductions in government agencies, it’s hard not to be concerned about the long-term impact of these actions on safety. It’s clear that regulatory agencies like OSHA will be targeted for cuts by the Department of Government Efficiency (DOGE). In fact, just recently an Arizona congressman introduced a bill to abolish OSHA. The stated goal of shrinking government oversight is to reduce wasteful spending and debilitating constraints on businesses. Yet when the people doing the cutting know little about the agencies and regulations they are cutting, the cuts can do more harm than good.
The term “government regulation” has taken on a progressively negative connotation. However, regulations are an essential safeguard for workers, public health, public welfare, and the environment. One only needs to recall the economic crises of 2008 to understand that regulations have an important role in society. Of course, regulations have a cost for the governments who must enforce them and the organizations who must comply with them. Finding the balance between ensuring safeguards are in place and not overburdening companies is an ongoing challenge.
It’s tempting when regulations become overly burdensome to want to impose drastic cuts. But regulations and regulatory agencies are vital, especially in safety. OSHA and other regulatory agencies provide essential services, including educating organizations on how to keep workers, the public, and the environment safe. They also provide consequences — the key ingredient to ensure organizations behave in the best interest of all. Without consequences for those who do not comply with rules, the natural consequences in business will take over. Businesses exist to make a profit. The driving force for leaders of for-profit organizations is to focus on productivity, quality, and customer service; because those performance indicators are directly related to the bottom line.
Safety’s connection to the bottom line is less transparent. Companies with mature safety cultures can point to the impact that good safety performance has on the bottom line, but many organizations sadly still view safety as a cost. Safety has to fight for time, attention, and resources. To be clear, this is not because leaders don’t care about safety. I have never met a leader who doesn’t care. Safety has always struggled to compete for reasons completely unrelated to the goodwill of leaders. The reasons center around metrics and the probability of consequences.
Despite decades-long calls for more preventative measures of safety, the prevalent metric is still incident rate. As I and many others have argued (see the book Safe by Accident?), incident rate is not a good measure of how safe an organization is. People can work in unsafe conditions and/or engage in unsafe behaviors and not get hurt, sometimes for long periods of time. The Deepwater Horizon remains the most striking example of this fact, given it was celebrating 7 years without a lost-time incident on the day of the explosion.
How is this relevant to deregulation? If safety regulations and inspections were severely curtailed today, we would not see a spike in incident rate next week or even next month. As noted above, incidents are probabilistic events. Even the most unsafe work environments can and do go for extended periods without incidents. If regulations and inspections are reduced and nothing bad happens in the short term, many people might conclude that the regulations and inspections weren’t really necessary. But short-term results can be dangerously misleading. Unfortunately, our society focuses very heavily on the short term, and when bad things happen in the longer term, they aren’t often linked to past causes.
This innate short-term focus we all have introduces another variable that negatively impacts safety. When regulations and inspections are reduced, organizations can focus more time, energy, and resources on productivity, which will have a fairly immediate positive impact. If you don’t have to follow lengthy procedures, fill out permission forms, or do safety inspections, you can produce more product and thus make more money. You might not need as many employees, further positively impacting the bottom line. These are powerful, relatively immediate positive consequences that are likely to reinforce the lack of regulations for organizations. The negative consequences of worker injuries, increased workers’ compensation costs, potential increased lawsuits, and brand erosion are all in the future and uncertain, which makes them much weaker than the more immediate and more certain consequence of increased profit. While most leaders understand that safety is ultimately good for business, this imbalance of consequences that favors short-term profit over safety makes it harder to consistently act in the best interest of safety. This is what regulations are designed to address.
There is no doubt that regulations require extra effort: most things that are good for humanity do. Eating well and exercising, going through airport security screening, saving for retirement, and taking old paint to a recycling center (rather than throwing it in the trash) all require concentrated effort. Rules and regulations help us humans do the right thing, when doing the right thing is burdensome in the short term, but in our best interest in the long term. In the absence of government regulations to ensure compliance with basic safety standards, it becomes increasingly important for leaders to promote and support the development of a proactive safety culture that makes safe production the standard.
