RALEIGH – North Carolina’s state and local politicians have officially exhausted my ability to understand what the heck they think they’re doing.
The setting for this achievement is ConAgra Foods’ Slim Jim plant in Garner. As you may recall, it was the setting of one of the state’s most tragic industrial accidents in years. Last June, a contractor at the plant was trying to light a water heater in a room into which gas had been vented, due to a mistake by another contractor. The resulting fire killed four, injured about 70 more, and did millions of dollars in damage to the plant.
One state agency, the N.C. Department of Labor, went into regulatory mode. After an investigation and negotiation with ConAgra, officials announced an agreement in which the company would admit to 26 health and safety violations, pay a $106,440 fine to the state, and agree to various safety improvements.
Meanwhile, other state and local government agencies went into economic-development mode. The Slim Jim plant had employed 750 local residents at the kind of manufacturing work that isn’t readily available elsewhere. Because of the damage to the plant, 300 workers have already been laid off. In an effort to save the remaining jobs, public officials are currently hammering out a subsidy package reportedly to include $450,000 from the Perdue administration, a similar amount from the town of Garner, a grant from Wake County, and other perks still under consideration.
So North Carolina government will accept a check from ConAgra and then send an even bigger check to ConAgra. At the very least, one might advise the relevant clerks to save on the postage and handling by allowing the company to submit a single invoice for the net amount.
These policies aren’t just contradictory. They are nonsensical.
I know it always makes the political class feel better to “stick it” to private firms, but the practical benefits of fining companies after major industrial accidents are pretty hard to find. Remember that while the ConAgra accident may, at least on paper, end up costing the company a little over $100,000 in fines, it has already cost the company millions of dollars in property damage, lost production and sales, and higher workmen’s compensation premiums. If the prospect of losing millions of dollars isn’t sufficient to motivate other companies to learn from ConAgra’s mistakes and seek to reduce the likelihood of future accidents, then adding the additional prospect of a $100,000 fine is pointless.
As I wrote years ago on the subject for Policy Review magazine, there is little evidence that the advent of stringent federal and state regulation has had a significant effect on workplace safety. Accident and death rates fell at about the same rate after the creation of the Occupational Safety and Health Administration as they did before its creation, because competitive markets already punish industrial accidents severely:
One way to think about the relative efforts of government and business in the safety arena is this: On any given day in America, thousands of local, state, and national safety regulators are inspecting businesses, studying test data, issuing regulations, and adjudicating violations. But on that same day, millions of American workers, managers, designers, and engineers are working to make their workplaces safer, to maximize sales and revenues, minimize losses, and maintain good, long-term relationships with productive employees. The magnitude of private-sector safety efforts, both in time and money spent, far exceeds that of even today's bloated regulatory bureaucracy.
So the ConAgra fine is best thought of as political theater, not as a deterrent to protect worker safety. And now that public officials are preparing to give the company an incentive package worth several times the fine, what was supposed to be a tragic theatrical performance is turning into a farce.
Hood is president of the John Locke Foundation