Sometimes
it seems that federal agencies are only around to make and enforce
laws and regulations. Or even that they make laws only so that
they have something to do…enforce them. Whether or not this
observation has any grain of truth, manufacturers spend an inordinate
amount of time and money to comply with workplace regulations.
And we aren't even talking environmental regulations.
According
to a study by the Mercatus Center at George Mason University conducted
in conjunction with the National Association of Manufacturers,
U.S. companies paid $28 billion to comply with federal workplace
regulations in 2000. That is an average of $2.2 million to comply
with workplace regulations. That breaks down to $1,700 per employee.
The study
also found that the burden of these regulations falls disproportionately
on small firms that employ fewer than 100 people. Their total
compliance costs breaks down to about $2,500 per worker. This
is 68% higher than the cost at larger firms with more than 500
employees. They pay about $1,500 per employee.
These regulations
include worker health and safety benefits that accounted for one-third
of the costs and employee benefits that accounted for one-fourth
of the costs. For companies with less than 100 employees, this
averages out to 2.4% cost as a percent of receipts.
The most
costly worker health and safety compliance regulations for manufacturers
are OSHA, followed by workers' compensation and the Drug Free
Workplace Act. Companies paid $567 for each employee to comply
with safety and health regulations and $468 to comply with benefit
regulations.
"What
our study found was that the cost for manufacturers to comply
with workplace regulation exceeds by at least 75 % the cost estimates
in previous academic and government studies," said Mark Crain,
economics professor at George Washington University.
The other
point this study makes is that the burden of federal workplace
regulations seems to fall on companies that employ less than 100
people, which are many in the finishing industry. To review the
complete report on line, go to www.mercatus.org/news/workplace.htm.
