Libertarianism and Workplace Safety: Many leftists argue that without government regulations, workers safety would be in major jeopardy since employers will take no (or very little) precautions to ensure a safe workplace, especially if doing so would reduce their profit margin. However, this isnt necessarily the case, injuries are very costly to firms because they lead to higher wage premiums, worker compensation, and costly work stoppages. To empirically test whether profit maximization promotes workplace safety hazards, economists Dr. Russell S. Sobel and Dr. Pavel Yakovlev examined data from U.S industries. In contrast to popular opinion, they found that, profit-maximizing firms have a very strong incentive to provide safer working conditions by substituting more capital for labor in more dangerous occupations... They conclude by stating: Our empirical findings suggest that in a dynamic and competitive market economy, market forces will encourage more rapid rates of injury-reducing technological innovations in industries with high injury rates. Thus, market-based economies with a well-functioning legal system can be expected to move, over time, towards less intensive labor usage in dangerous occupations (as machines replace workers) and increasing occupational safety for the few workers remaining in dangerous occupations (as better machines make for a safer workplace). [1] References: [1] Occupational Safety and Profit Maximization: Friends or Foes?: papers.ssrn/sol3/papers.cfm?abstract_id=1692788
Posted on: Sat, 22 Nov 2014 01:00:01 +0000
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