TESTIMONY OF BARRY BROWN, PRESIDENT, INTERNATIONAL ASSOCIATION OF GOVERNMENTAL LABOR OFFICIALS

Mr. BROWN. Chairman Bergland, counselors, thank you for having me here this morning.

My name is Barry Brown. I am director of Michigan's Department of Labor. I might point out that our State department of labor has occupational and construction safety activities which employ more than 200 inspectors, so it is large among the States in that activity.

Today, I am here representing the International Association of Governmental Labor Officials. I am president of that association. Last year I was chairman of their ad hoc committee on occupational safety and health.

I also am a member of the National Advisory Council on Occupational Safety and Health within the U.S. Department of Labor, and further, I am a member of the National Advisory Committee on Construction Safety.

I might add, I have served with gentlemen from some of the organizations you heard from this morning, on some of these committees. I was also quite active in the hearings and rulemaking regarding rollover protective systems, and several of the other recently discussed construction standards. I engaged in a good bit of those hearings, and in the taking of testimony in those regards.

With these State and Federal responsibilities, I feel I can share some experience and insights into the effects of the Occupational Safety and Health Act-OSHA-on small business.

I have a lengthy report, but I am only going to give you portions of it at this time.

Mr. BERGLAND. Mr. Brown, your report will appear in full in the record.

(The statement referred to follows:)

STATEMENT OF BARRY BROWN, PRESIDENT, INTERNATIONAL ASSOCIATION OF GOVERNMENTAL LABOR OFFICIALS

Thank you, Mr. Chairman, and members of the Special Select Subcommittee. My name is Barry Brown. I am Director of the Department of Labor for the state of Michigan.

Today, I am here representing the International Association of Governmental Labor Officials. I am president of that association. Last year I was chairman of their ad hoc committee on occupational safety and health.

The Michigan State Department of Labor has public, occupational and construction safety activities which employ more than 200 inspectors. I also am a member of the National Advisory Council on Occupational Safety and Health within the U.S. Department of Labor. Further, I am a member of the National Advisory Committee on Construction Safety. With these state and federal responsibilities, I feel I can share some experience and insights into the effects of the Occupational Safety and Health Act (OSHA) on small business.

Though I address you today as president of the organization of state labor commissioners, you are aware that circumstances and experience in the several states are not in all ways the same and that the views of one labor commissioner to another may vary. So, though I speak to you on points of view that I believe reflect the views of the great majority of the states' labor commissioners, I cannot say that all of the 50 state labor commissioners would concur in each of the points that I present to you today.

I think it best for me to spend the majority of my time before you addressing myself to the relationship that has developed between the U.S. Department of Labor and the states in the development of state health and safety programs

under the occupational safety and health law. However, I do first want to make a few observations as they relate to state administration and those issues discussed by other witnesses you have recently heard. I believe my brief comments may be pertinent and helpful to the subcommittee.

First, on the question of additional costs imposed by OSHA enforcement, it seems to me there is little argument that can be raised that the various new requirements in processes and equipment developed under the OSHA standards will be costly to the employer. In many cases, these costs will add to the price of the product or service provided by that employer. However, when I hear some employers arguing that they ought to be excluded from the law because of the cost, a number of very logical questions arise.

Why is it any more undesirable that a house be more costly because of the OSHA requirements than to similarly add to the price of an automobile or a commercial building? Can one argue that the public, the voter, or their elected representatives are unwilling to pay higher prices or taxes for improved working conditions?

Using the cost argument principally, there are those who have appeared before you who have contended that because of their small size or because of their previously unregulated industry, they ought to be excluded from the coverage of OSHA. I do not feel that they can justify their request for exclusion. For example, a modular or pre-assembled home one which is produced in a kind of industrial assembly line setting—will clearly be under the scope of the occupational safety and health law. Thus, it would seem unfair to allow a competitor who builds a house in a different way in a different location to escape the provisions of the law.

Secondly, if a manufacturer which employs 25 employees is caused to guard his machines or to handle his product in a certain way that adds to the cost, it is clearly unfair when a slightly smaller competing employer down the road is not subject to the regulations. I think that whatever is adopted as a federal level of exemption, many of the states will continue to develop and enforce standards that will apply to all employers within their boundaries, regardless of the employer's size or industrial classification.

I have noted that many of those who have testified before you come from states where the cost of workmen's compensation benefits to workers who are injured on the job is very minimal. In these states the benefit rates are low and the employees subject to the state law are few. Thus, in these states, the cost of an injury to a worker is largely borne by the worker himself rather than by the employer. I suggest that the report that will be submitted in just a few weeks by the National Commission on Workmen's Compensation may include some ramifications on the cost of work accidents. If indeed, as some people have forecast, that committee recommends to the Congress and to the President that a national system of workmen's compensation be developed which establishes floors for benefit levels, claimant eligibility and scope of coverage, then it would seem that a comprehensive and rather strictly applied voluntary company safety program would have some material employer cost advantages.

You will note, gentlemen, that today and in the prior days of testimony you have heard little from employers of states where there is such a safety benefit to be gained. In fact, it is where there is an expensive state workmen's compensation program that employers welcome the opportunity to reduce their workmen's compensation rate by meaningful safety standards. Additionally, a cooperative system with the state's safety administrators often materially reduces the number of injuries and illnesses incurred in the course of employment.

I would suggest, then, that some of the small employers who will be faced with a much more costly workmen's compensation program in many of the states should look ahead to see that there is an advantage, an economic advantage, for a vigorously pursued state safety program rather than just an increased cost of business for them.

There are many states that have had strict safety law enforcement for some time. Some states, like Michigan, have seen employers leave the state to go to other states where such safety programs and accompanying costs were not present. It would seem, then, that some employers capitalized on the absence of safety standards as a means of competition. They have located in a state where there were lesser standards or no regulations and thus they were able to make their product at a lower cost. They have then submitted bids or sold their product at a lower price than manufacturers in those states which had safety pro

grams. I believe it is in the national advantage to eliminate this kind of competition between the states and between employers. I feel the safety of the worker ought not be a factor of competition. To this extent, I am representing my own state more particularly than the total association of states.

Another point that may be helpful to you in your analysis of the problem would be knowledge of the fact that a large number of states have had jurisdiction over small employers, farmers and home builders for some time under their state safety law and regulations. The employers covered in these categories have done as well as their counterparts not covered in other states during this period. I know that California has had some strict rules regarding agriculture that have been in effect for years. Agriculture in California seems to be as strong as in any of the 50 states. In Michigan, when the U.S. Department of Labor passed its four rules dealing with chemical storage and use, logging, slow-moving vehicles and farm labor housing, we found that, in each case, comparable state rules had been in effect and strictly enforced in Michigan for some time. I should also point out that home builders have been under the Michigan construction safety laws since 1965. Finally, all employers of one or more employees have been under our comprehensive occupational safety law since 1966. They have not found it too difficult to comply with or to follow the requirements of our safety regulations. A federal exemption of any of these groups would not excuse the parties from state coverage.

Throughout the last two years, I have addressed numerous groups of building contractors, home builders, small employers, farmers and other management and employee groups in Michigan on the question of the occupational safety and health law. Of the nearly 10,000 people in these audiences, I have asked repeatedly whether there was one Michigan farmer in the audience or one Michigan home builder that had ever been inspected by the federal government under OSHA. So far, I have not found one person who had been inspected. Indeed, I have not found anybody who even knew of one such inspection which had been made in our state. Thus, it would seem that most of the fears I've heard expressed were fears of prospective action. They were apprehensions of what could occur rather than representnig actual experiences of what had happened.

I would think that as you review the material that has been submitted to you and as you discuss the topics with wtnesses, one thing you must do is separate what has happened and what has been wrong from what is feared and what could go wrong. I think that often those two become so fused together as to be confusing to the speaker and to the listener.

On the question of state programs, I think it is clear that the Williams-Steiger Act planned a partnership between the states and the federal government on the issue of occupational safety and health. This partnership has been criticized often by the Nader groups or some of the international union groups as being a "sell-out" or as being an administration "conspiracy."

The fact is that the Williams-Steiger law would not have passed Congress but for the fact that the provisions were included which would strengthen and encourage state administration of occupational safety and health programs. It is true that in the past the states have not measured up to what we view today as being an appropriate safety and health program. However, I think that it is equally true to say that the variations between sound programs and inadequate ones were great from one state to the next.

Further, it is fair to say that during the same period where one can justifiably criticize the states, equal criticism can be mounted against the federal government in its own internal programs dealing with its employees or with its safety programs under the Walsh-Healey law or other federal safety laws.

Under the Williams-Steiger law, there were eight criteria listed which a state had to meet before it could gain approval by the Secretary of Labor. The Secretary of Labor added to these eight criteria with further indices which he believed clarified and strengthened the law. The states disagreed, noting that Congress had used as a test a state's program's effectiveness rather than a series of individual requirements. The pressure mounted by the Washington union leadership has hounded the administration to be so strict with the states that they cannot gain approval. That individualism and separate treatment could be given to different problems and different areas was contemplated by Congress. They did not require that the states duplicate federal language or imitate federal policies. I am hopeful that the states will be allowed to establish safety laws and programs which are reflective of the needs of their citizens.

Currently, only two states-South Carolina and Oregon-have submitted a state plan. However, those particular state plans have not been fully reviewed; and we have not had enough time to determine what will be the reaction of the public, of the various critics of state plans, and of the U.S. Department of Labor. There are approximately 20 other states which have a state plan in one stage of development or another. Many of these states plan to submit their programs to their regional offices in the next month or so, and it is anticipated that almost all of them will have approval for their state's administration of occupational safety and health programs before the completion of the year 1972. If a state does not receive approval before the end of the year, under the language of the Williams-Steiger Act, that state will be preempted from the field of occupational safety and health and that area of enforcement will turn exclusively to the federal government. It would appear at this time that there are a number of states still interested in achieving their own occupational safety and health programs which do not have the legislation or the personnel or the budget to allow them to come up to a level required for even the beginnings of a developmental plan under the federal guidelines.

It is interesting to note that in many of the states-approximately twentywhere there was some sort of a state safety program in effect and where the federal law will preempt the state operation at the end of the calendar year 1972, a total of several hundred state inspectors will no longer have authority to carry out their work and a great many state safety laws will be voided by the operation of the federal statute. It is the hope of the state labor commissioners that during this period before final federal approval and after the end of the year 1972, when federal preemption occurs, there will be a period during which the state personnel can occupy themselves with standards not yet promulgated by the federal occupational safety and health administration or devote their activities to public agencies which do not come under the scope of the federal law, or that they can devote their activity to consulting, education and training-those nonenforcement safety areas which are so very important and which are not preempted by the operation of the Williams-Steiger Act. In this way, the federal establishment will not completely supplant the state organizations and they will be able to mark time with activities that will help reduce injuries until they are able to take over from the federal government on matters dealing with the enforcement of occupational safety and health laws and regulations within their state boundaries.

I think it is very important to note that in every state that has come to my attention, the agricultural sector, the business sector and the employee sector have each endorsed the adoption of a state-administered safety program. In a great many of these states the union organizations have also supported the administration of safety programs by the state government. Admittedly, in several of the other states, the unions have taken a neutral or skeptical view; and in several others, they have taken a view very antagonistic to the development of a state program.

The unions have said (and I believe some employers do believe) that if the administration of the safety and health programs is transferred to the states, there will be less stringent rules; that there will be loose enforcement and that the general effects of the law will be greatly diluted and modified. The state labor commissioners with whom I have talked do not agree with that view. Almost universally, they acknowledge that by the very nature of the law there is an overemphasis at the federal level on enforcement. However, they also acknowledge that there is a need for the state to have standards similar to the federal standards and for the states to have an enforcement program which is not only similar but which is, on balance, as effective as that of the federal agency. Reasoning for this is based upon an understanding that if there was one advantage to the federal law, it was the creation of a measure of uniformity between the states on the issues of standards and enforcement.

Even though I am personally an advocate of individuality and of a period of experimentation, permitting differing approaches to the achievement of safety from one state to the next, I also acknowledge that if we vary too greatly in our standards or in our techniques for enforcement from one state to another, this will create pockets of different kinds of standards and different levels of enforcement, resulting in an imposition on interstate commerce.

In conclusion, then, I would say that the states will have standards and enforcement which are similar to and as effective as the federal programs and

those who would encourage the states' development of safety programs will not be disappointed in the results.

On the other hand, even though the standards and the enforcement techniques may in many ways be similar, I feel that there are many areas where the state can make significant variations from the federal program which will, I think, in part, answer some of the questions that have been raised by others who have testified before this select subcommittee.

For example, it is my understanding that in several states it will be proposed that the standards for the state be promulgated by a group of individuals rather than by a single person such as a state labor commissioner. In some states, I understand there have been proposals that a group appointed by the labor commissioner and/or governor of the state would advise the governing body on the application of the rules and their enforcement in that particular area. As an example, in Michigan I have already been at work with various agricultural groups and various specific industrial category groups setting up advisory committees and working with them regularly so that as we develop our state program we will regularly have had input from those groups which have particular problems.

Another thing that a state program can include is provision for a review system of the various sanctions, fines, stop-work orders and citations by a state agency with a final review by the state courts. It is a certainty that these kinds of procedure would provide for more input by local people who are aware of the individual and geographic problems of that particular state.

There is no reason to believe that any state could not improve upon the Williams-Steiger Act by going beyond its requirements for safety education and training. Even though a state would have to match the William-Steiger Act's standards and enforcement procedures, it could, in many aspects, add to those enforcement provisions a much more aggressive safety education and training program. In this way, a greater balance could be achieved within a state than has thus far been achieved federally.

Finally, a state may be able to handle its standards in a way which will permit a different treatment of various industries and their problems than that provided by the federal government. Even though I have told you that there is a requirement that the standards be of equivalent effectiveness, there is nothing that says they need to be structured and organized in exactly the same way as the federal standards. I would emphasize my belief that all of these potential variations that I have suggested to you would provide for greater input at the local level for both employers and employees and would also provide a more responsive administrative and governmental service to the needs of the citizens of a particular state.

In summary, gentlemen, even though you can see that we have differed with the present administration and its Department of Labor in several of its interpretations of the law and in several of its applications of the law to problems in the state plans area, we are still generally in agreement and we believe that we have been treated fairly.

In the last two years the U.S. Department of Labor has met with representatives of state government no less than sixteen times, and nearly every one of the fifty states was represented in one of these group meetings or another. I believe that there never has been a period in the history of my organization, the International Association of Governmental Labor Officials, when there has been more dialogue and more meeting of the minds between the state labor departments and the U.S. Department of Labor. I look forward to a period of growth and development of the state labor departments in the area of occupational safety and health, and I believe that even though we have gone through a difficult period in the last year and a half, we will look back upon it as having been a time well spent and with much accomplished.

Mr. BROWN. First, regarding the cost, and its impact on small business, I would like to comment on that before I get into the part that I am concerned with, Mr. Chairman, and that is State programs, and their effects on small business under OSHA. In terms of the additional cost proposed by OSHA enforcement, there seems no question in my mind these new requirements in processes and equipment under OSHA will be more costly to the employers. In many cases, it is going to add to the cost of the product or the service of the employer. I know