The Economics of Killing Workers

Last week a British Petroleum oil rig blew up, killing 11 workers. A Massey Coal Explosion killed 29 miners three weeks ago. Obama eulogized over empty coffins today.

British Petroleum and Massey Coal are in a race for top prize on how to make profits by shaving worker safety. Both Massey and BP work sites were nonunion, and unions usually help corporations lose that prize.

In 2009, four years after a BP explosion in a Texas refinery that killed 15 workers and injured 170, the Occupational Safety and Health administration imposed the largest fine in its history—$87-million on British Petroleum. BP also paid billions in criminal charges and civil claims for the accident: $50-million in criminal fines for violating the Clean Air Act and over 4,000 claims from a $2.1-billion claims fund.

Why does this company still operate in this country? How many more workers does it have to kill?

In my economics classes, I teach the economics of health and safety. The two-minute version has the same conclusion as the two lecture version: If it is cheaper for the company to kill workers than it is to safeguard the workplace so they are not killed, workers will be killed. Unions and hefty government fines would raise the price of killing workers. Both Massey and BP work sites were nonunion. And the rate of unionization in this nation is at a all time low: 7.2 percent.

No other developed nation has a weaker labor movement than the United States and this country kills more workers per year than most.

Even these numbers are suspect. And the United States, unlike other rich countries, does not count fatalities due to occupational disease as a fatality. Seven countries impose safety obligations upon either directors or senior managers of companies—Germany, France, Italy, Sweden, Japan, Canada, and Australia—while the United Sates imposes none.

The U.S. Department of Labor classifies on-the-job fatalities as misdemeanors, even if the employer was negligent by willfully failing to follow OSHA safety standards. The maximum civil penalty OSHA can levy for a safety violation is $70,000,  and the maximum prison sentence for a willful violation of a safety standard that leads to a worker’s death is six months. Six months.

Check out Fair Warning for direct commentary on corporate health and safety practices.

These workplace fatalities are not accidents of nature; they are caused by the Congress’s and the president’s failure to regulate and protect workers who attempt to unionize.