The Biden administration recently announced that companies with over 100 employees must require COVID-19 vaccinations or weekly testing — and the Occupational Safety and Health Administration may fine businesses up to $14,000 per violation.
Corporate America immediately embraced the mandate. Business Roundtable — which lobbies on behalf of the nation’s largest companies — said that it “welcomes the Biden Administration’s continued vigilance in the fight against COVID.” Groups like the National Association of Manufacturers and the Chamber of Commerce followed suit.
Other companies — especially those outside the corporate mainstream — are not willing to force health decisions on their employees. Calling the mandate a “grotesque abuse of power,” Jeremy Boreing — co-founder and co-CEO of The Daily Wire — explained that the company has filed suit against the Biden administration.
For every business in the United States — regardless of their size and whether they resist federal overreach alongside The Daily Wire — the President’s mandate may cause severe consequences for their operations and their bottom lines.
Thousands of Dollars in Penalties
The most immediate consequence of the vaccine mandate would be hefty fines levied upon businesses.
The Occupational Safety and Health Administration — which typically drafts rules meant to protect workers from toxic chemicals, rickety scaffolding, and other hazards — can be ruthless when enforcing its policies. As labor attorney Jonathan LaCour told Healthline, OSHA routinely doles out tens of thousands of dollars in fines; it has also created penalties that progressively increase for businesses failing to comply with regulations.
OSHA, however, is a relatively small agency. It employs “approximately 1,850 inspectors responsible for the health and safety of 130 million workers, employed at more than 8 million worksites around the nation — which translates to about one compliance officer for every 70,000 workers.”
In 2019, OSHA used its $558 million budget to inspect roughly 75,000 job sites. It would take well over a century for OSHA to inspect every workplace under its jurisdiction.
Just as the vaccine mandate represents uncharted territory for the Biden administration, OSHA’s small workforce may need to pioneer new enforcement techniques. One option is to create a federal registry through which companies will have to regularly report their compliance. Another is the use of state and local health offices to help with punishing resistant businesses.
Regardless of whether or not it successfully strongarms companies into paying fines, the vaccine mandate is certain to impact both compliant and non-compliant businesses.
Worker Shortages
Biden’s vaccine requirement will likely worsen a very tight job market — especially for larger businesses.
As the United States has dealt with COVID-19 and the lockdown-induced recession, a major bottleneck in the economic recovery has been a severe worker shortage. Largely driven by enhanced federal unemployment aid extended through early September by President Biden’s American Rescue Plan, workers have been slow to return to their positions. One poll in July even discovered that millions of Americans are likely turning down job offers to continue living on federal and state unemployment — effectively forcing businesses to compete with the government in paying would-be employees.
The Associated General Contractors of America — which represents thousands of construction firms — told the Biden administration that the vaccine mandate would further worsen persistently challenging job market conditions.
“Largely because of the pandemic, many contractors worry about finding enough work even as they struggle to find enough workers,” said the letter, observing that a goal cited by the Biden administration’s vaccine mandate is to eliminate economic risk caused by the Delta variant. “While increased vaccination rates will help address this concern, AGC has serious reservations about the extraordinary step of imposing the obligation of vaccinating individuals on employers.”
The organization noted that as many as 46% of construction workers currently plan to forgo the vaccine. Accordingly, construction businesses “justifiably fear that many of those workers — when faced with the choice between the vaccine and their job with a covered employer — will quit and go to work” for a smaller employer not covered by the mandate.
In their open letter to President Biden, several dozen other industry groups — including the American Trucking Associations, National Private Truck Council, and Truckload Carriers Association — predicted that trucking companies may lose nearly four in ten drivers due to the mandate, worsening the American supply chain crisis.
In another scenario, the United States could see another exodus of workers from the job market. Rep. Kevin Brady (R-TX), the ranking Republican on the House Ways and Means Committee, told The Daily Wire in an August interview that the labor force participation rate — which fell significantly at the onset of COVID-19 — has been “stuck at a very low rate” despite the economic recovery.
Thanks to government handouts — which may expand under the Democrats’ pending social welfare bill — it will likely be more feasible than ever for Americans to avoid the vaccine mandate altogether by leaving the job market entirely.
Human Resources Costs
President Biden’s vaccine mandate will cause significant bureaucratic and legal headaches for businesses.
One poll taken before the announcement of the mandate revealed that roughly half of employers requiring vaccines at the time were accepting religious and medical exemptions. Currently, it is probable that many employees will be able to file exemptions — leading to a deluge of paperwork for human resources departments.
As workplace lawyer Tracey Diamond told The New York Times, “determining whether someone has a sincerely held religious belief, practice or observance is really tricky because it requires the employer to kind of get inside the employee’s head.”
Indeed, if the OSHA rule permits religious exemptions, requests “are going to skyrocket.” For large employers, carrying out an “individualized case-by-case analysis” will cost significant time and resources.
Discouraging Entrepreneurship
Broadly speaking, federal regulation has a severe negative impact on entrepreneurship — and there is no reason to think that the vaccine requirement will be an exception.
Without a doubt, President Biden’s vaccine mandate — which many view as highly political in nature — will create a firestorm of controversy as businesses attempt to cope with its implications. However, even conventional laws that restrict business’ activities discourage new producers from entering the marketplace.
A study from George Mason University’s Mercatus Center found that regulation is “particularly detrimental to economic prosperity to the extent that it deters entrepreneurship.” Indeed, economists studying federal regulations levied upon 215 sectors discovered that “more regulated industries experienced fewer new firm births and slower employment growth between 1998 and 2011.” Specifically, a 10% increase in the intensity of regulation led to a 0.5% decrease in firm births and a 0.9% decrease in hiring.
Entrepreneurship is deeply embedded in the American spirit. But it is hard to imagine any strengthening of this disposition under a regime willing to force Americans to choose between their paychecks or their consciences.
The views expressed in this opinion piece are the author’s own and do not necessarily represent those of The Daily Wire.
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