SIC 9651

This category covers government establishments primarily engaged in regulation, licensing, and inspection of other commercial sectors, such as retail trade, professional occupations, manufacturing, mining, construction, and services. Also covered are physical standards, regulating hazardous conditions not elsewhere classified, and alcoholic beverage control.

NAICS Code(s)

926150 (Regulation and Inspection of Miscellaneous Commercial Sectors)

Organization and Structure

The primary purpose of regulation is to prevent harm—either physical, pecuniary, or restrictive—to persons or entities. It follows that statistical data on harm, damage, or injury is necessary to amend, delete, or provide regulatory structure to an industry. Analysis and application of data provide justification for agencies and regulatory boards to exercise jurisdiction over private and public sectors in order to reduce such injuries. Examples include vehicular safety belt and speeding laws, minimum age requirements for tobacco and alcohol products, maximum weight loads in elevators, airplanes, and freight trucks, nutritional analysis on food packages, and control of pharmaceuticals by prescription only.

From the federal regulations commercial truck drivers must meet, to the deposit requirements banks must follow, government agencies—at both the state and national level—present a mosaic of requirements that promote safety and stability for the general public and for the employees in regulated industries. Regulatory responsibilities are assigned to a wide range of federal agencies. Following are some of the most active and high-profile agencies.

The U.S. Occupational Safety and Health Administration (OSHA). This agency, part of the U.S. Department of Labor, came into being in 1970. Its stated mission is "to assure so far as possible every working man and woman in the nation safe and healthful working conditions."

OSHA, working in conjunction with state agencies, utilizes 2,100 inspectors and additional complaint-discrimination investigators, engineers, physicians, educators, standards writers, and other technical and support personnel throughout the country. The agency's regulations generally do not apply to miners, transportation workers, the self-employed, and some public employees.

Through its investigations and its enforcement of regulations and standards, and through its public outreach and training efforts, OSHA works to reduce workplace injuries and deaths. An estimated 6,000 Americans die each year from injuries sustained at their places of work. An additional 50,000 people die from illnesses brought on by chemical exposures in the workplace, and an estimated 6 million people suffer nonfatal workplace injuries—injuries that carry a $110 billion price tag annually.

OSHA strictly monitors: asbestos in the workplace, bloodborne pathogens, and carbon monoxide poisoning, as well as control of hazardous energy sources, cotton dust, employee rights and responsibilities, lead exposure, exposure to formaldehyde, safety of video display terminals, and workplace fire safety.

A recent study of the impact of OSHA inspections showed the positive impact such regulation efforts have had. According to the study, in the three years following an OSHA inspection, penalties, injuries, and illnesses fell an average of 22 percent. In addition, overall injury and illness rates dropped in industries where OSHA has concentrated its attention but remained unchanged or actually increased in industries where OSHA had less presence. OSHA's 1999 budget was estimated at $349 million.

The Federal Deposit Insurance Corporation (FDIC). This agency is an independent organization created by Congress as part of the 1933 Banking Act. Along with its related regulatory agency, the Federal Savings and Loan Insurance Corporation (and, to a lesser degree, the Federal Reserve), the FDIC's mission is "to maintain stability and public confidence" in the nation's banking system.

Issues connected to banking have played integral roles in American history: the stock market collapse of 1929 and its effect on banks prompted the establishment of the FDIC. During Franklin D. Roosevelt's first 100 days in office, legislation establishing the FDIC was passed by Congress, as a way to stave off the collapse of banks and the loss of depositor savings.

The big news in 1999, following a record-breaking stock market boom lasting for several months, was the historic restructuring of banking law by Congress and the White House in October-November 1999. Intended to dissolve restrictions placed upon banks, insurance companies, and stockbrokerages by the Glass-Steagall Act of 1933, the new legislation was promoted as an offensive rather than defensive measure to meet the rising global economy. It essentially allows integration of commerce and banking—mutually exclusive industries following the market collapse of the Great Depression. Banks and financial firms may engage in commercial activities such as the marketing of insurance and investment portfolios, and commercial firms will be allowed to purchase banks and financial entities.

The FDIC requires banks and other financial institutions included in its regulatory purview to protect their money supplies through the provision of insurance coverage for bank deposits. Accounts are protected up to $100,000. The FDIC also conducts periodic examinations of banks that do not belong to the Federal Reserve System. In 1998 and 1999, the Department of the Treasury's Bureau of Engraving and Printing issued new paper currency for all but the dollar bill, intended to ensure the continued containment of high-tech counterfeiting, which costs billions of dollars each year.

The Bureau of Alcohol, Tobacco, and Firearms (ATF). This agency is part of the U.S. Treasury Department. While the portion of its mission dealing with the reduction of crime and provision of law enforcement assistance to local entities receives the greatest public attention, ATF also enforces regulations dealing with the sale of alcohol, tobacco, and firearms; in particular, ATF is concerned with the fair and proper collection of revenues and taxes on those items.

The history of ATF goes back to the beginnings of U.S. history. The taxing of alcohol has generally been seen as a way to generate needed revenue. But not surprisingly, those required to pay the tax weren't always supportive of those efforts. The Whiskey Rebellion of 1794 (when farmers vigorously protested the imposition of a federal excise tax on whiskey) was only one in a continuing series of episodes in which the federal government met the resistance of general citizens. With the end of Prohibition, alcohol was once again seen as a possible revenue source. In 1934, the Alcohol Tax Unit within the Bureau of Internal Revenue was created. In 1935, the Federal Alcohol Administration Act was passed, creating licensing and permit requirements and establishing regulations to ensure an open and fair marketplace for the legal manufacturers of distilled spirits and their customers. In 1940, the Federal Alcohol Administration merged with ATF; that merger combined law enforcement and regulatory authority into one agency. Firearms became a part of the organization's responsibilities, and oversight of tobacco taxes was added in 1951. From the mid 1960s into the 1980s, ATF's mission came to include law enforcement duties.

While it may appear that its regulatory functions have taken a back seat to its law enforcement activities, ATF, which regulates some of the most important and controversial industries in this country, collected more than $18.2 billion in revenues in 1998. The agency also conducts seminars to ensure the market and product integrity of alcoholic beverages. And, consistent with its history, ATF is expected to expand into the area of electronic commerce. A 1995 test project that allowed industries to electronically submit and monitor applications for non-beverage alcohol formula was deemed successful and will likely be expanded to include other areas under ATF jurisdiction. The 1999 budget for the ATF was approximately $743 million.

The issue of industry regulation in general has prompted considerable political debate. A key theme of the Clinton administration has been the need to get rid of regulations and requirements that are "burdensome" to U.S. industry, particularly to small businesses. The movement from regulation to deregulation or self-regulation came to a head during the Reagan administration. And while federal agencies continued to enunciate their desire to move away from "over-regulation," or at least make the regulations more user-friendly, a trend appears to be emerging that would increase the federal government's regulatory role.

For example, the U.S. Environmental Protection Agency ranks as a priority the reduction of tiny air particles believed to pose risks to children. Nelson Litterst, a lobbyist for the National Federation of Independent Business suggests such rules could cost $16 billion annually, double the EPA's estimate. Also, OSHA recognized its need to respond to public perceptions that it has been an agency enmeshed in red tape and a "one-size-fits-all" approach to regulation. At the same time, OSHA continued its efforts to require workplace ergonomic standards, in order to reduce back injuries and problems resulting from repetitive stress syndrome. However, a GOP-controlled Congress blocked OSHA's move in 1995, but that ban was not renewed in 1996. Thomas J. Donahue, president of the American Trucking Association, has said the kinds of regulations being considered would cost truckers $6.4 billion a year. OSHA's estimate of costs in this area was $257 million. Furthermore, it was expected that OSHA would be turning its attention toward convenience stores and fastfood restaurants in an attempt to reduce nighttime crime. With the National Highway Traffic Safety Administration developing new standards for automobile airbags and the Food and Drug Administration offering new regulations to prevent a U.S. outbreak of mad-cow disease, the pendulum may be swinging back toward regulation.

Current Conditions

The National Safety Council released its annual report in November 1999, Report on Injuries in America, containing highlights from its 1999 edition of Injury Facts. According to the report, in 1998 alone, there were 19.4 million injuries from unintentional causes which resulted in disability. During the same year, 92,200 people died of fatal injuries.

The leading causes for injury-related fatalities in 1998 were motor vehicle accidents, falls, poisonings, drownings, and burns by fire. The leading causes of noninjury related fatalities were heart disease, cancer, stroke, and pulmonary disease. At the workplace, a fatality occurs every 103 minutes and a disabling injury every 8 seconds. A total of 3.8 million workers suffered disabling injuries in 1998 alone, costing Americans $125.1 billion. At home, the leading cause of death was by falling, resulting in 10,700 fatalities for 1998 alone. Deaths and injuries in public places (including sports, recreation, and building access) totaled 20,100 in 1998.

The total cost to the American public of medical expenses, property loss, and employer expense was an estimated $480.5 billion, or the equivalent of 59 cents for every one dollar spent on food in 1998. It is from statistical data such as this that regulatory entities decide whether to further regulate, deregulate, or leave intact the controlling laws and rules that govern major industries across the nation.

Further Reading

"Bentsen Amendments Strengthen Banking Overhaul Legislation." Press Release, June 20, 1997. Available from .

"Fatal Occupational Injuries and Employment by Industry, 1998." Bureau of Labor and Statistics: Safety & Health Statistics, Table 3. Available from .

"Federal Government Budget by Agency." Office of Management and Budget, 1999. Available from .

"Greenspan Backs Bank Reform." CNN Financial Network, 11 February 1999. Available from .

Hopkins, Thomas. "Cost-Benefit Paralysis." National Review, 2 September 1996, 69.

"Unintentional Injuries Are Among Leading Causes of Death in the U.S." National Safety Council News Release, November 5, 1999. Available from .

"U.S. Congress, White House Reach Agreement on Banking Reform." Yahoo News, 23 October 1999. Available from .

Yang, Catherine, and John Carey. "The Regulators Are Back at Business." Business Week, 20 January 1997, 41.

User Contributions:

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