SECRETARY OF LABOR ROBERT B. REICH
COMMITTEE ON EDUCATION AND LABOR
U.S. HOUSE OF REPRESENTATIVES
APRIL 28, 1993
Mr. Chairman, Mr. Murphy, Mr. Goodling and Members of the Committee --
Today marks the twenty-second anniversary of the effective date of the Occupational Safety and Health Act. In 1971, we celebrated this seminal legislative achievement as the centerpiece of a national commitment to end the human and economic toll caused by workplace injuries and illnesses. Twenty-two years later, we take heart that much has been accomplished.
The Act, however, has not fulfilled all of our hopes and aspirations. Our workforce and our economy continue to suffer grievous and unnecessary losses. The law needs to be changed if its promise -- "to assure so far as possible every working man and woman in the Nation safe and healthful working conditions" -- is to be realized. April 28, 1993 is therefore a fitting day to pledge to develop a new approach -- in full partnership with all those whose knowledge, creativity and energy are required to meet this challenge. We must preserve the best of the current program, and examine new approaches based upon our collective experience. In this regard, I am mindful that this Committee and its Senate counterpart have taken a leadership role in making these issues a priority concern.
Improved workplace safety and health is an important aspect of this Administration's commitment to better jobs for all Americans. This commitment is entirely consistent with a more productive and more profitable America. In the emerging economy of the 21st century, employers and employees win or lose together; one group cannot gain for long at the expense of the other.
America's most forward-looking companies treat their workers as a key competitive asset to be developed rather than as a cost to be cut. These companies already provide healthy and safe workplaces, just as they continuously improve the skills of their employees and involve them in decisions about how to improve productivity and quality. The challenge we face as a nation is to guide and accelerate these practices throughout the American economy.
We have made progress in providing safer and healthier jobs since the enactment of the OSH Act. According to the Bureau of Labor Statistics, fatality rates have declined since 1971. Moreover, other studies provide evidence that where OSHA has focused its resources on a problem, successful results have been achieved. For example, five years after the agency's lead standard was issued, blood lead levels of workers in certain battery plants decreased by almost fifteen percent. Air lead levels in these plants were reduced by fifty percent. Similarly, OSHA's cotton dust standard has reduced the percentage of cotton yarn workers in the textile industry who suffer from byssinosis -- commonly referred to as "brown lung" -- from twenty-six percent to less than one percent. In addition, the General Accounting Office reported that almost thirty percent of employers have substituted less hazardous chemicals as a result of the OSHA's Hazard Communication Standard.
Despite this progress over two decades, the toll of workplace deaths, injuries, and illnesses continues at unacceptably high levels. In 1974, the rate of Lost Workday Injuries and Illnesses -- those incidents in which an employee loses, or must be placed on light duty, at least a full day -- was 3.5 per 100 workers. The rate has fluctuated over the years, and in 1991, this rate was 3.9 per 100 workers. Although the fatality rate has declined, the Bureau of Labor Statistics estimated that in establishments of eleven or more employees 2,800 workers were killed on the job in 1991.
Regrettably, these statistics do not describe the full extent of the danger at our workplaces. Workplace fatalities, as measured in the past, have been understated. In comparison to the BLS figures, the National Safety Council reported 9,900 workplace fatalities in 1991. In addition, reputable studies suggest that thousands of deaths resulting from occupational illnesses go unreported each year because we cannot link later disease to earlier workplace exposures.
Our statistical reporting capabilities will soon improve. By this Fall, the Bureau of Labor Statistics expects to release its new Census of Fatal and Occupational Injuries which will include more comprehensive and accurate fatality data for the nation.
In addition, it must be recognized that today's workplace is in many ways different from that of two decades ago, and new technology and mechanization bring new hazards. Workplace illnesses associated with stresses from repeated motions of wrists and limbs, such as carpal tunnel syndrome, which were barely recognized when OSHA was created, now make up more than three-fifths of all occupational illnesses recorded by employers. In 1983 there were about 27,000 recorded cases of repetitive motion disorder. In 1991, nearly 224,000 repetitive motion disorder cases were reported by BLS. For instance, an ever-growing number of Americans spend their days in front of computer terminals -- entering, manipulating, or retrieving data -- and, therefore, musculoskeletal and nerve ailments to hands, arms, necks, and shoulders are becoming the occupational diseases of the information age.
Other recent workplace health concerns are indoor air pollutants and diseases that can be contracted wherever people are in close contact for long periods of time, such as tuberculosis and hepatitis.
In addition to human suffering, accidents and illnesses on the job also exact a substantial economic toll on society. For example, in one study examining accidents of all types, the Rand Institute for Civil Justice reported that workplace accidents cost the nation $83 billion annually. This includes $51.7 billion in lost production -- the equivalent of 2 million workyears annually -- and $31.5 billion in medical costs associated with injuries. This $83 billion almost equals the total cost of all non-work-related accidents put together, even though work accidents make up only twenty percent of all accidents. And Rand did not even take into account costs due to workplace illnesses.
Employers are directly saddled with much of this bill, as exemplified by workers' compensation payments of $52 billion in 1990, the last year for which such data are available. Total employee benefits paid on an annual basis, such as wage replacement and medical costs, increased from $3 billion in 1970 to $38 billion in 1990. Compensation per covered employee increased from $51 to $402 during that period. Workers' compensation costs now average over two percent of payroll; in some industrial sectors, like construction, however, workers' compensation costs are in excess of fifty percent of payroll. A study of California companies indicates that even business owners in wholesale trades -- a relatively safe industry -- now expend eleven percent of payroll on workers' compensation premiums. Restaurant owners expend over eight percent.
Other studies suggest that the indirect costs are even higher: notably, of lost productivity caused, for example, by damage to plant and equipment. All these costs, much of which are avoidable, impose a significant drain on our nation's capacity to compete in the global economy.
Approximately 12 percent of workers are not covered by any workers' compensation program. Nor do those programs provide consistent coverage for many conditions, including occupational diseases. Lost and diminished employment can result in lost and diminished pensions and other essential, employer-provided benefits. Social Security, Medicare, Medicaid and a variety of other public and private programs pick up some of these costs -- often at taxpayer expense.
Prevention of workplace injuries and illnesses is a sound investment in our economy and our future, and is vastly preferable to the payment of compensation for the suffering caused by injury and disease. The cost of prevention is significantly lower than the cost to employers, workers, and society as a whole of continuing to endure unsafe and unhealthy working conditions.
We can, as a nation, better protect our workforce; it appears that other countries are doing so. While data across countries are not strictly comparable, data reported to the International Labor Organization indicate that Japan and Sweden have a rate of fatal workplace accidents that is about one-half the rate in the United States.
This Committee has devoted considerable time and thought to the question of how to reduce workplace injury and illness, and I salute your continuing commitment to this issue. I also recognize that many of the provisions of the Chairman's bill reflect the careful deliberations of others who have addressed the questions. A number of its provisions have been drawn from other Federal laws, such as the Federal Mine Safety and Health Act of 1977, state laws, and recommendations of the Administrative Conference of the United States.
Although the Clinton Administration has not yet fully considered the specific provisions of the proposed legislation, I want to assure the Committee that we will do so as soon as possible. I am assembling a team to thoroughly review it, and I look forward to discussing the issues with the Committee and others as we develop the Administration's views and recommendations. Today I would like to share with the Committee a set of principles which will guide our review.
Preventing hazards at the worksite should be our central focus.
One of my goals as Secretary of Labor is to encourage employers and employees to join together in order to achieve mutual gains. Few workplace issues offer as obvious a common ground for meaningful collaboration as safety and health. Workers have an immediate and direct interest in workplace safety and health, for their lives and their livelihoods are at stake. By enlisting that interest, employers can reduce the costs they bear as a result of occupational injuries and illnesses, and increase workplace productivity. I believe that we have an enormous opportunity to foster and build upon this common interest, and to forge a new and lasting partnership for change.
Everyone agrees that there must be active involvement on the part of employers to identify and abate safety and health hazards. Many American firms have reported very successful results with innovative approaches that involve safety and health programs and cooperative efforts between management and labor. The human and economic costs of workplace hazards make it our duty to require that employers implement appropriate and effective injury prevention programs.
We should not ask employers, however, to undertake efforts that add meaningless paperwork or impose costs that will not produce results. At the same time, employers need guidance on the types of prevention initiatives they can adopt that will, in a reasonable period of time, achieve real returns.
It is inconceivable that major improvement in the health and safety of a workplace can occur without the real and active involvement of workers. I nevertheless recognize that determining a method to effectively tap worker knowledge and interest is, in itself, a contentious issue. As I stated at my confirmation hearing, I am intrigued by the legislation's proposed use of joint employer-employee committees as a technique for preventive maintenance which would provide a continuing presence to assure safety and health at the front lines. Stimulating better understanding and broader knowledge of the role of joint committees will be one of my priorities.
In addition, in my view, a necessary first step to viable worksite-based programs is to strengthen the Act's ban on retaliation against employees who report safety and health hazards. OSHA continues to receive many complaints of reprisal against such employees; "whistleblower" provisions of the law need to be improved and consistency established among Federal safety and health laws.
Better training of employers, employees, and health professionals is an important means of prevention.
Employers and employees must be better educated to detect and prevent workplace injuries. Training in safe and healthy work practices is essential. Employers and employees also must be informed about their mutual responsibilities under the law. The government has a vital role to play in both respects. As Chairman Ford as recognized in his proposal for a revolving fund, we need innovative means for financing additional educational and training services.
Doctors, nurses, and allied public health professionals also can help establish effective prevention programs at the workplace. To do so, health professionals need to be educated to ask patients about their working conditions, and to evaluate the information which is provided.
Incentives to promote hazard abatement need strengthening.
Many businesses experience the cost of the failure of prevention only through the operations of the insurance market. We need to explore with the insurance industry and with employers how various changes in insurance pricing mechanisms might create greater incentives for employers to prevent injury and illness at the workplace. We also need to explore how the insurance industry might better assist its customers with loss control services, in training and education efforts, and in designing and managing worksite-based safety and health programs.
OSHA's regulatory efforts must be streamlined.
The current standard-setting process needs reform. OSHA rulemaking proceedings take far too long. When this occurs, the provision of worker safeguards is unnecessarily delayed.
I understand the justified frustration of those interested in a particular rulemaking project with the slow pace of action by OSHA. However, I am also concerned that allocating OSHA's limited resources to certain projects by statute or court order jeopardizes other efforts that ultimately may be more urgent. I believe that an important function of a regulatory agency is to use its expertise to establish priorities for action, and that such exercise of delegated power is preferable to either legislative or judicial mandates on a case-by-case basis.
Some of the problems the agency has faced in promulgating rules are the result of rigid judicial interpretations of the current statutory language which impose heavy evidentiary burdens on OSHA. The most recent example is the Federal court of appeals decision striking down OSHA's revised air contaminants standard. I do not believe that the agency should be required to perform detailed and time-consuming analyses of issues over which there is no reasonable basis for dispute, and which in fact are not actively disputed by parties to the rulemaking.
I am especially eager to find ways to create a non-adversarial climate of rulemaking in which all parties -- employers, employees, government, and others with knowledge -- work together to identify and resolve safety and health problems. The most desirable process is one which results in rules that can be implemented quickly because they have been developed with the full and informed participation of those who must implement them.
OSHA must have penalties which induce compliance.
Prevention and collaboration are preferable. But OSHA also must have a credible enforcement mechanism in order to deter violations of the Occupational Safety and Health Act and its rules and regulations.
Further, the agency must be capable of achieving prompt abatement of hazards. Under current law, if an employer contests a citation or proposed penalty there is no requirement that the employer abate the cited hazard. Some abatement orders take years to become final. Throughout this time, workers may continue to be exposed to serious hazards. We must provide appropriate due process to employers, but we must also ensure that the risks of serious workplace hazards are minimized, if not eliminated.
In addition, those few employers who intentionally neglect or ignore their duties under the law must be dealt with effectively and forcefully. While these employers constitute only a small part of the employer population, the government's limited ability to pursue criminal prosecution of willful violations of the law invites irresponsible behavior.
A third concern is how we assign responsibility for occupational safety and health on multi-employer worksites which have for years been routine for the often-hazardous construction industry; however, they are becoming increasingly common in other parts of the private sector. While existing law attempts to address multi-employer worksites, it may not be fully adequate.
Also, there are good reasons to extend the OSH Act's protection to the over seven million State and local public employees who are not now covered by the Act. Many of these employees, such as fire fighters and sanitation workers, are performing extremely hazardous work. Nevertheless, the decision to expand coverage must be carefully considered, because adding a new population will result in a greater demand on OSHA's resources.
In summary, the status quo is simply unacceptable. A safer and healthier workplace is good for our nation and good for our nation's commerce. Preventing injuries and illnesses before they occur will save significant resources, improve our productivity and capacity to compete in global markets, and enhance our standing of living. I salute the leadership that this Committee and its Chairman, along with Senators Kennedy and Metzenbaum, have given this issue.
I believe we can build a consensus around the principles I have outlined, and I am committed to doing so. I want to assure you that as we move forward to develop a new and strengthened OSH Act, I am also committed to making the existing statute function as effectively as possible in the interim. I will reach out to the Congress, employer and employee organizations, the State governments, and to department and agencies of this Administration to exchange ideas and promote cooperation in this regard.
As we approach the 21st century, let us together recommit ourselves -- as we did twenty-two years ago -- "to assure so far as possible every working man and woman in the Nation safe and healthful working conditions".