Report, Study Dispute Ergo Standard Costs

A government report and a trade group study raise questions about OSHA projections in an upcoming proposed ergnomics standard.

As a proposed ergonomics standard nears release, a government report and a new study raise questions about the Occupational Safety and Health Administration's (OSHA) claims, including how much the standard would cost employers.

An analysis by the Small Business Administration (SBA) of the standard's costs and benefits concludes that it likely would cost small employers from 2.5 to 15 times more to comply with the regulation than estimated by OSHA. The theory is that a larger pool of workers will seek treatment under medical management provisions. Also, the cost-to-benefit ratio of the standard may be as much as 10 times higher for small businesses than for large businesses.

Meanwhile, a new study by Food Distributors International (FDI) "raises serious questions" about the economic impact of an ergo standard, said Sen. Christopher S. "Kit" Bond, R-Mo., a strong opponent of a standard. The study, released Nov. 2, estimates that the cost to 242 members of FDI, a trade association of food distribution companies, could be as high as $26 billion the first year and $6 billion annually in subsequent years.

Jeffress lists the cost of the ergonomics standard for businesses at $4.5 billion. Projected costs include retrofitting and reconfiguring facilities to reduce the incidence of work-related musculoskeletal disorders.

"This study raises serious questions about how far from reality OSHA is in its calculations of the impact for the ergonomics calculations," said Bond, chairman of the Senate's Small Business Committee. "OSHA clearly has no idea what this rule will cost if one industry alone comes in with dramatic numbers like these."

The SBA's report states that OSHA's estimate of benefits "may be significantly overstated." This overstatement, according to the report, can be attributed to OSHA not accounting for a potentially dramatic increase in the number of musculoskeletal disorders (MSDs) resulting in days away from work as employees take advantage of the standard's medical removal protection (MRP) provision. The report estimates that the MRP provision may increase the number of MSDs with days away from work to the point where there are no measurable benefits, at least in an economic sense.

In addition, OSHA's estimates of capital expenditures on equipment to prevent MSDs do not account for varying company sizes and seem quite low, even for the smallest company size category, the report concluded.

In April, the Small Business Advocacy Review Panel issued a report that said OSHA should explain why it will not wait until the National Academy of Sciences review of medical literature related to ergonomics is completed. That panel consisted of representatives from OSHA, the Office of Management and Budget and SBA. The panel received recommendations from 20 small businesses.

The SBA reports are available at www.sba.gov.

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