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Reich writes: "When I was labor secretary, the most frustrating experience (other than battling Bob Rubin) was dealing with companies that treated law breaking as a cost of doing business. They get away with it because the maximum penalties for violating the law (multiplied by the probability of being caught) are lower than the profits they can make by ignoring it."

Robert Reich. (photo: unknown)
Robert Reich. (photo: unknown)


If Corporations Don't Like a Law, They Make the Penalties So Low That They Can Disregard It

By Robert Reich, Robert Reich's Facebook Page

14 August 16

 

hen I was labor secretary, the most frustrating experience (other than battling Bob Rubin) was dealing with companies that treated law breaking as a cost of doing business. They get away with it because the maximum penalties for violating the law (multiplied by the probability of being caught) are lower than the profits they can make by ignoring it.

The maximum penalty OSHA can impose for a serious violation of worker safety was increased this year -- from $7,000 to $12,471. In the case of willful or repeated violations, it went from $70,000 to $124,709. But that didn’t stop Stahl Specialty, an aluminum foundry in Warrensburg, Kansas, from repeatedly exposing its workers to illegally dangerous conditions. Last January one of its workers lost an arm because the company didn’t obey the law. Then in February, a 57-year-old maintenance worker was crushed to death when a 4,000 pound machine part fell on him. Again, the company didn’t follow the law. And what’s the penalty? OSHA is proposing Stahl pay $105,000. A slap on the wrist.

It’s common practice in America: If corporations don’t like a new law, they make the penalties in the law so low many companies will disregard it. Then they starve the enforcement agency of personnel to enforce it and it. Another reason we need a movement to counter the moneyed interests.

What do you think?


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