The Feasibility of an “Injury Tax” Approach to Occupational Safety

The Occupational Safety and Health Act of 1970 was enacted at least in part because of a twenty-five per cent rise in the overall manufacturing injury rate between 1964 and 1969.1 The congressional response was a mandatory standards approach to occupational injuries and disease. The Act also created a new agency, the Occupational Safety and Health Administration (OSHA), with the power to promulgate and enforce a variety of workplace standards. Failure by a firm to comply with OSHA's standards, as detected by unannounced inspections, was made punishable by fines up to $1,000 for each violation.2