Group Says Ergo Rule Will Cost $91 Billion Each Year

Sept. 1, 2000
Research by the Employment Policy Foundation says the cost for all businesses to implement OSHA's\r\nproposed ergonomics regulation will come to an average of $91.4\r\nbillion annually.

Research has found the cost for all businesses to implement OSHA''s proposed ergonomics regulation will come to an average of $91.4 billion annually, with compliance costs reaching $886.6 billion over 10 years, according to the Employment Policy Foundation (EPF).

A survey conducted by the group, "Economic Analysis of OSHA''s Proposed Ergonomics Regulation," said the cost for implementation in the first year will be $129.4 billion, which is the rough equivalent of one-half of the budget for the Department of Defense.

Even using OSHA''s low estimate of $4.2 billion, the costs will exceed benefits by a factor of 15 to 1, said EPF.

EPF''s numbers are based on a national survey of occupational safety and health managers in Fortune 500 companies.

"OSHA''s estimate missed the mark because it failed to compile empirical estimates of the resources and labor effort the employers would have to expend to implement and comply with the proposed regulation," said EPF.

EPF claims, over a 3-month period, it did the research that OSHA failed to do over the last decade.

The foundation constructed an integrated computer model that calculated the numbers of musculoskeletal disorders (MSDs), establishments and employees affected by the proposed rule, MSDs averted by implementation of the program, costs for implementation of each program activity required, and value of economic benefits for MSD cases averted.

While EPF did not say how many companies it survey, it noted, "respondents to this survey represented every major industry category and their answers represent actual experience in conducting safety and health program activities in over 19,000 establishments and for 1.7 million employees."

"With an estimated annual cost of $12,511 per establishment, the regulation affects smaller businesses the hardest because they often operate with slim profit margins and limited working capital," said EPF.

The group expressed concern because it believes the prospect of high compliance costs, time-consuming federal inspections, OSHA fines and other expensive liabilities will dissuade many prospective entrepreneurs from starting new businesses.

"Small businesses have provided an important source of the new technologies and new products that have spurred our current economic expansion and ensured American leadership in world markets," said EPF President Ed Potter. "OSHA''s proposed mandate threatens to destroy that important source of innovation and economic energy."

"OSHA should have done better research on costs before proposing its ergonomics rule," continued Potter. "It should go back to the drawingboard."

EPF''s earlier 50-page report, Critique of OSHA''s Economic and Regulatory Flexibility Analysis of the Proposed Ergonomics Program Standard," said the agency''s cost-benefit analysis contained errors and omissions.

In particular, the report said the OSHA analysis was flawed because it either underestimated the cost of implementing the requirements of the ergonomics proposal or used an overly optimistic assessment of how many employers are already in compliance.

by Virginia Sutcliffe

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

Sponsored Recommendations

Committing to Safety: Why Leadership’s Role in Safety Excellence is Key

Jan. 13, 2025
Leadership has the power to transform an organization through their behavior and vision, which can result in the creation of an organizational culturethat supports safety excellence...

Speak Up! Cementing "See Something, Say Something" to Drive Safety

Jan. 13, 2025
Many organizations promote "see something, say something" to encourage their people to intervene and make work safe. But most don't go far enough to equip teams with the skills...

The Truth and Challenges of Cultivating Chronic Unease

Jan. 13, 2025
DEKRA announces its latest white paper, “The Truth and Challenges of Cultivating Chronic Unease,” as a definitive look into why being vulnerable to incidents strengthens our commitment...

Mitigating Risks: Strategies for Safeguarding Workers in Hazardous Workplaces

Jan. 13, 2025
Join our expert team in taking on the challenge to make safety part of your organization’s DNA as work, the workforce, and workplaces evolve.

Voice your opinion!

To join the conversation, and become an exclusive member of EHS Today, create an account today!