04-9389-2 CH 4
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10:13 AM
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Notwithstanding the long-term decline in coal mine fatalities shown in figure 4-1b, recent tragedies in three mines have raised concerns about whether the Mine Safety and Health Administration needs to strengthen enforcement of mine safety standards. Industry observers assert that growing mechanization of equipment has contributed to mine safety and that MSHA’s role has been minimal because fines for safety violations are small, negotiable, and often not even collected. Sider’s (1983) assessment of mine safety attributed reductions in fatalities per man-hour to improvements in productivity rather than to changes in mining operations induced by regulation. Similar to workers in other occupations that face significant risks to their health from inherent working conditions, miners have received wage premiums to compensate them for the risks they take by working in mines, such as breathing harmful air matter, suffering injuries, or even dying if a mine collapses. Thus mine owners have a strong financial incentive to prevent wage premiums from rising by keeping their mines safe and preventing accidents that increase the perceived risks to health from working in a mine. Kniesner and Leeth (2004) estimated that the costs of MSHA’s activities are more than double the benefits. Its budget is large—on a per establishment basis, it is 400 times larger than OSHA’s budget—and its deterrence is weak. MSHA could generate greater social returns by reallocating its funds to ensure that safety violations that contribute the most to injuries are corrected.
Information Policies Adopted by States Individual states have adopted information policies to supplement federal policies. These include prohibiting price advertising that may divert attention from product quality, requiring practitioners in hundreds of occupations to obtain a license that certifies they are competent to perform a particular task, enabling purchasers of new automobiles to obtain a full refund or a replacement vehicle in the event that their automobile is hopelessly defective, and requiring motor vehicles to have annual safety inspections. Empirical evidence indicates that consumers have not been better served by these policies than by federal policies; in fact, in some instances they have been harmed.