The current legislation is overly prescriptive. Businesses and workers must comply with a plethora of procedures. The incentives to ensure that the benefits to those affected exceed the costs seem to be very weak. Expressed differently, well-being is not a focus.
(A benefit is an increase in well-being, as perceived by the person affected. A cost is a negative benefit. So when perceived benefits exceed the costs, well-being is improved. People who oppose cost-benefit analysis do not understand that they thereby oppose well-being assessments.)
The focus on greater safety as a goal in its own right is of the same ilk. Safety contributes to well-being, but not in lock-step. People who drive cars put themselves at risk because what they are doing improves their well-being. As do those who play body-contact sports, ski, or work in risky occupations.
There is substantial economic literature on how much more workers get paid for riskier work. It is significant. The trade-off is real. Greater safety is not the only goal.
What this means is that businesses forced to make jobs safer will find themselves paying workers less. This is another trade-off. Businesses can compete for workers by offering a range of options as between wage rates and safety. Workers can choose according to their own risk-wage rate preferences.
In contrast, the current system has a silo safety focus. It is not a well-being focus. For example, the Health and Safety at Work Act 2015) aspires that:
“… workers and other persons should be given the highest level of protection against harm to their health, safety, and welfare from hazards and risks arising from work or from specified types of plant as is reasonably practicable”.
Worker preferences are irrelevant, and determining what is “reasonably practicable” is a can of worms.
So how did New Zealand get to this point? In 1974, government replaced a well-behaved tort system for penalising negligence by a no-fault Accident Compensation scheme. That was bad for safety. So what has evolved to restore business liability is the current wasteful regulatory excess. That multitude of wasteful orange traffic cones is just the most visible aspect.
That is why the Government’s announcement last week is so welcome.
Dr Bryce Wilkinson is a Senior Fellow at The New Zealand Initiative, Director of Capital Economics, and former Director of the New Zealand Treasury. His articles can be seen HERE. - where this article was sourced.
The focus on greater safety as a goal in its own right is of the same ilk. Safety contributes to well-being, but not in lock-step. People who drive cars put themselves at risk because what they are doing improves their well-being. As do those who play body-contact sports, ski, or work in risky occupations.
There is substantial economic literature on how much more workers get paid for riskier work. It is significant. The trade-off is real. Greater safety is not the only goal.
What this means is that businesses forced to make jobs safer will find themselves paying workers less. This is another trade-off. Businesses can compete for workers by offering a range of options as between wage rates and safety. Workers can choose according to their own risk-wage rate preferences.
In contrast, the current system has a silo safety focus. It is not a well-being focus. For example, the Health and Safety at Work Act 2015) aspires that:
“… workers and other persons should be given the highest level of protection against harm to their health, safety, and welfare from hazards and risks arising from work or from specified types of plant as is reasonably practicable”.
Worker preferences are irrelevant, and determining what is “reasonably practicable” is a can of worms.
So how did New Zealand get to this point? In 1974, government replaced a well-behaved tort system for penalising negligence by a no-fault Accident Compensation scheme. That was bad for safety. So what has evolved to restore business liability is the current wasteful regulatory excess. That multitude of wasteful orange traffic cones is just the most visible aspect.
That is why the Government’s announcement last week is so welcome.
Dr Bryce Wilkinson is a Senior Fellow at The New Zealand Initiative, Director of Capital Economics, and former Director of the New Zealand Treasury. His articles can be seen HERE. - where this article was sourced.
3 comments:
Simplistic and illogical. “ There is substantial economic literature on how much more workers get paid for riskier work. It is significant. The trade-off is real. Greater safety is not the only goal.” Rubbish.
Tell that to any construction worker, forestry worker or civil works frontline operator in the country. And get laughed off the site. There is no economic advantage to workers from employers who cut safety and injure people courtesy a poorly regulated environment.
All a bit much for my brain. All I know is that decades ago a relative suervised in a sheltered workshop. The workers did incredibly menial repetitve tasks but attended eagerly and were reluctant to finish at the end of the day. As legal payments increased, the outfit was disbanded.
Elf n'safety has been a laughing stock for years. I remember once a senior fire fighter responding to questions about a recent event saying that " Obviously my first priority is the safety of my men". It didn't seem to occur to him that his first priority and why he was employed was to put out fires and rescue people. The same reasoning could apply to police and the armed forces. This could be the mantra without being stupidly reckless.
Faulty Towers epitomised it when the Italian Commander said he would " aska his men if they would like to fight today " .
Somewhere commonsense has to be employed not brainless dogma. Gerry Sanders.
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