A recent decision by the Occupational Safety and Health Administration to enforce its regulations on small farms with less than 10 employees generated opposition among some senators in Congress. The senators claimed that the agency's decision ran counter to congressional intent and amounted to regulatory overreach. More importantly, OSHA's actions may produce more harm than good.
For decades, Congress exempted small farms from OSHA regulations and the agency complied with congressional request. However, recent OSHA guidance revised the policy and cleared the way for the agency to inspect small farms if they engage in postharvest activities, such as crop cleaning or sun drying. OSHA maintained that its memo simply clarified its existing policy, but the fact that it began fining small farms for the first time in decades signaled that its actions amounted to a change in policy.
By resorting to guidance, OSHA avoided the formal rulemaking process, which would have forced the agency to justify the rule's benefits and open the debate up to public comments and congressional review. The process may have also revealed the potential unintended consequences of OSHA's decision.
Enforcing OSHA regulations at small farm operations may marginally increase employees' safety, but the compliance costs may put many of these farms out of business or force them to cut back on the number of employees. In the current sluggish economy, it may take a while for the farm workers to find other employment. In addition, unemployment itself is a great safety risk associated with increases in heart attacks, alcoholism, crime, suicides and child abuse – hardly the outcome that OSHA intends to promote and something for the agency to consider before levying large fines on small businesses.
In addition, OSHA regulations are likely a bigger burden for small farms than for larger agribusinesses. A recent estimate put regulatory compliance costs for small businesses at $10,585 per employee as opposed to $7,755 for larger firms. It is unclear whether increased safety as a result of OSHA inspections would outweigh the potential harms from closing small farms and increased unemployment, since OSHA failed to conduct a proper analysis of its actions.
OSHA is not alone in rushing head first to regulate without properly considering the potential adverse effects. In this Mercatus Center study, I show that agencies commonly fail to account for the potential risk tradeoffs of safety regulation. For example, Transportation Security Administration regulations tightening airport security led to increases in traffic fatalities as many passengers decided to drive rather than fly. Similarly, the National Highway Traffic Safety Administration's rule mandating airbags on cars saved many lives but also increased fatalities in small children.
Better upfront analysis could help agencies mitigate the unintended consequences of safety regulations. Yet as OSHA's example demonstrates, agencies often focus too narrowly on their mission and fail to look at the potential downsides of new rules.
Sherzod Abdukadirov is a research fellow at the Mercatus Center at George Mason University.