The Occupational Safety and Health Administration (OSHA) promulgates safety and health standards. These standards typically apply to machinery (capital), which is required to be equipped with guards, shields, and the like. An alternative to these standards is to require the employer to furnish personal protective devices to employees (labor)—such as earplugs, hard hats, and safety shoes. Assume both approaches offer equal protection from injury.
a) Analyze the possible employment effects of mandating that capital be fitted with safety devices.
b) Analyze the possible employment effects of mandating that employees be given personal protective devices.
c) Which approach would result in greater employment loss? Does your answer hinge on the relative costs of each approach to safety?