NCPA - National Center for Policy Analysis

OSHA Overstates Ergonomic Benefits, Understates Costs

June 13, 2000

If private studies are to be believed, the Occupational Safety and Health Administration's proposed rules on ergonomics carry with them costs many times in excess of what the agency estimates. Moreover, the benefits are far more modest than what the agency promises, critics say.

OSHA says its new regulation will prevent 300,000 work injuries and generate $9 billion in savings each year -- at an annual cost of more than $4 billion. Industry predicts that the costs could be 10 times higher than OSHA admits.

  • The Employment Policy Foundation puts the costs at between $35 billion and $99 billion per year.
  • A consultant to the Small Business Administration puts the price tag at anywhere from 2.5 to 15 times OSHA's estimates.
  • The Association of Food Distributors International (AFDI) estimates the cost between $384 million and $22 billion per year for their membership of 800 distribution centers alone.
  • Using AFDI's low-end range, the cost for 1.9 million locations would be $1 trillion.

Even cutting the cost to 10 percent of AFDI's estimate, the total cost for employers would be $100 billion.

On the benefits side:

  • The Employment Policy Foundation estimates 10-year cumulative benefits at half of OSHA's $69.5 billion.
  • The SBA consultant has estimated that preventing one musculoskeletal disorder saves only one-seventh of OSHA's estimate of $22,546 per case.

Critics of the proposed regulation recommend that considerably more study of ergonomic injuries needs to be undertaken before the agency rushes to construct a bureaucracy around such injuries. Moreover they say, OSHA could perform a service by providing a clearinghouse for collection and dissemination of research and industry experience on what works in dealing with ergonomic problems.

Source: Richard Mahoney (Center for the Study of American Business at Washington University, St. Louis and former CEO of Monsanto Co.), "Ergonomics Designed by OSHA," Washington Times, June 13, 2000.


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