June 13, 2000

June 13, 2000 | News Releases on Jobs, Jobs and Labor Policy

Proposed Workplace Safety Rule Will Cost States Billions, Study Shows

WASHINGTON, June 13, 2000-The federal government is on the verge of adopting new workplace regulations that will cost state and local taxpayers at least $6.6 billion annually, and private businesses $5.8 billion to $10.8 billion more, despite a decline in the types of injuries the regulations are supposed to prevent, a new Heritage Foundation study shows.

The Occupational Safety and Health Administration (OSHA) estimates its proposed "ergonomics" rule-covering such maladies as carpal tunnel syndrome, tendinitis and back injuries-will cost states and localities about $4.2 billion per year.

But Heritage Research Fellow Mark Wilson, a former Department of Labor economist, says a more accurate estimate is between $6.6 billion and $12.5 billion, making it "the broadest and most costly workplace regulation ever."

Wilson provides a high and low annual cost estimate for each state, ranging from $12.1 million to $22.7 million for Wyoming, to between $782 million and $1.4 billion in California. For the 28 states that automatically adopt OSHA rules, he shows what the rule will cost both the public and private sectors. The remaining 22 "discretionary" states have the option of adopting the OSHA rule, publishing their own regulations, or developing voluntary guidelines for state and local employees, so total cost estimates are impossible at this time, Wilson says.

"Despite OSHA's claim that the new rule will have little or no effect on the ability of state and local governments to deliver services, the public-sector cost of the proposed rule for just 28 states ranges from $886 million to $1.7 billion per year," Wilson writes. "Many small public-sector entities such as towns, volunteer fire departments, and water districts may not be able to sustain the cost of the new rule without increasing taxes or reducing services."

OSHA seems determined to move ahead with the rule, he says, though ergonomic injuries declined by almost 26 percent between 1992 and 1998. Wilson predicts that the rule will not only have direct costs, but will also boost worker compensation claims and state compliance assistance costs.

The impact of the ergonomics rule is not limited to higher costs, he notes. Because it is filled with undefined words and phrases such as "significant amount of the employee's time" and "core element of the job," private- and public-sector employers will have difficulty complying with it, he says.

OSHA has provided only a 30-day public comment period that ends on June 22 and a one-day public hearing to be held in Washington, D.C. on July 7. Wilson says that governors and state legislatures should ask OSHA and the White House Office of Management and Budget to extend the comment period to 60 or 90 days to give them time to determine exactly what this "unfunded mandate" will cost state and local employers.

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