The clamor for less government has risen lately, under the argument that “regulations hurt U.S. businesses.” One agency that is mentioned for the chopping block is the Occupational Safety and Health Administration (OSHA).

The free-market argument against OSHA goes something like this:

Employers offering jobs that involve some risk of injury usually don’t have trouble finding workers to fill them.

If a company with risky work had difficulty hiring employees, it could either offer higher wages or spend money to reduce the risks.

Why should the government interfere in this relationship between employer and employee?

In a recent article, economist Ed Lotterman offers one reason: an information gap.

Lotterman says many employees don’t have accurate information about the risks. He suggests that, without proper information, the employee is at a disadvantage. That’s where government regulation comes in.

Is Lotterman making a case for government regulation at any cost? Not at all. He says some regulation is good, but it must be cost effective.

He uses an OSHA construction regulation as an example of a good regulation. Requiring walls or boxes in trenches of a certain depth at construction sites has saved hundreds of lives a year, at a cost that doesn’t cripple the regulated employers.

His example of bad regulation: Requiring dairy farms to post notices that manure may make floors slippery.