Education Improvement Act, which created a commission to develop a national strategy to promote financial literacy. The new law responded to research that suggested that many Americans lacked the knowledge needed to make informed financial judgments.[1]
In 2006, the reform of the corporate financial disclosure system remained a work in progress. The costs of more rigorous disclosure, especially to small businesses, and the reach of reforms to companies headquartered in other countries were among the many controversial political issues. It remained to be seen whether recent legislative cures in fact would reduce underreporting and misreporting by companies and prove cost-effective in the long run.
A National Institute for Occupational Safety and Health survey conducted in 1972 found that “approximately 25 million U.S. workers, or one in four, [were] potentially exposed to one or more of ...nearly 8000 hazards” and that 40 to 50 million Americans, amounting to over 20 percent of the population, may have been exposed to hazardous chemicals.[2] Often neither employers nor employees were aware of the presence of hazardous substances in the workplace. Lack of knowledge hampered diagnosis and treatment when workers became ill from chemical exposure.
Responding to this problem in the 1970s, unions, public interest groups, and state legislators promoted the idea of a workers’ “right-to-know” about chemical exposures and associated dangers.[3] The federal Occupational Safety and Health Administration (OSHA) had issued standards specifying limits on levels of benzene, lead, and some other extremely toxic chemicals, but promulgating separate standards for hundreds of thousands of hazardous chemical products seemed impractical. Instead, labor and other public interest groups pressed for an approach based on greater transparency.
In 1981, the Carter administration proposed a disclosure requirement that would have applied "to virtually all businesses that used hazardous substances."[4] The Reagan administration, however, proved more hostile to greater transparency, prompting unions to shift their lobbying efforts from the federal to the state level. As a result, many states – including New Jersey, Pennsylvania, and Illinois – adopted their own right-to-know laws by the mid 1980s.[5] At that point, industry groups supported adoption of a uniform federal standard as an alternative to variable state right-to-know laws, and the federal hazard communication standard was adopted in 1983. The Reagan administration narrowed the initial rule to require only manufacturing firms to disclose chemical information.[6] OSHA argued that manufacturing amounted to 32 percent of total employment and accounted for more than 50 percent of illnesses caused by exposure to chemicals.[7]
The requirement created a two-part chain of disclosure. First, chemical manufacturers and importers evaluated the hazardousness of the substances they produced or imported and disclosed that information to employers who purchased their products. Second, employers made the information available to workers who handled hazardous substances. Manufacturers and importers attached to containers of hazardous chemicals descriptive labels listing the identity of the substance, a hazard warning, and the company’s name and address. Chemical manufacturers also provided employers with material safety data sheets that contained more extensive information about chemical identity, physical and chemical characteristics, physical and health hazards, precautions,
- ↑ Financial Literacy and Education Improvement Act, 20 U.S.C. 9701–08.
- ↑ Fagotto and Fung, 2003, p. 63.
- ↑ For discussions of the development of right-to-know laws and regulations in connection with health and safety risks, see Baram, 1984; Ashford and Caldart, 1985; Hadden, 1989.
- ↑ Schroeder and Shapiro, 1984.
- ↑ Oleinick, Fodor, and Susselman, 1988, provide a timeline for the adoption of state right-to-know laws. By 1982 five states had worker right-to-know laws; the number increased by six new states in 1983 and eight in 1984; in 1985, twenty-seven states had worker right-to-know laws.
- ↑ Hunter and Mason, 1996.
- ↑ See Executive Summary of Hazard Communication in the 21st Century Workplace, http://www.osha.gov/dsg/hazcom/finalmsdsreport.html (site accessed June 10, 2006). The Hazard Communication final rule can be found at 48 Fed. Reg. 53280 (November 25, 1983) (codified at 29 C.F.R . §1910.1200 (2005)).
