Keeping workers safe, but at what cost?

In November, the Occupational Safety and Health Administration issued a far-reaching, controversial rule intended to protect employees from repetitive stress injuries -- the disabled arms, aching backs and other maladies that each year fell an estimated 600,000 Americans who type, bend, reach and lift objects repeatedly at work.

Businesses have until October to comply. In the meantime, though, a range of businesses, trade groups, insurance companies and unions are filing legal challenges. Congressional opponents are expected to try to repeal the rule in the coming session, and President-elect George W. Bush's administration is likely to propose revisions.

Much of the business community's unhappiness with the ergonomics rule centers on its anticipated cost. Many managers contend that repetitive stress injuries are poorly understood, and that government is forcing companies to pay huge sums to reduce hazards that may not really exist.

How huge? The projections are all over the map. OSHA estimates that businesses will spend $4.5 billion on compliance in the rule's first year. The National Association of Manufacturers puts the cost at $6.7 billion for just its core constituency of 10,000 small and medium-size manufacturers. The Employment Policy Foundation, a business-oriented research group, predicts a toll on the economy of $125.8 billion in the first year of compliance, and a budget-busting $886.6 billion over the coming decade.

What is a nonspecialist to make of these wildly conflicting numbers? History may hold insights.

In 1992, members of the House Committee on Education and Labor were also troubled by the dueling cost projections each major new OSHA rule seemed to generate. Vinyl chloride, cotton dust, lead, formaldehyde -- each new standard elicited cries from business that the rule would bankrupt them, and countercharges from labor that OSHA was making the standards too lax. Committee members, concerned that something was seriously out of whack, asked the Office of Technology Assessment, a congressional research agency, to take a careful look at OSHA's cost projection methods.

The research agency put together a panel of economists and occupational health specialists from academia, industry and organized labor. The group looked at more than a dozen major OSHA safety rules that had been on the books for at least five years, and in one case for more than two decades. Because so much time had passed, the panelists were able to determine, for eight of the rules, how much the affected industries had actually spent on compliance.

The findings, published in 1995 -- the same year the research agency was closed by a budget-minded Congress -- make interesting reading today, given the uproar about OSHA's newest rule. Not only did the panelists learn that the affected industries' fears of crushing costs were usually way off target; they found that even OSHA tended to overestimate the cost of its rules.

In the case of vinyl chloride, for instance, the plastics industry railed that OSHA's rule, promulgated in 1974, would cost $65 billion to $90 billion to comply with and wipe American plastics off the map. OSHA projected that industry would have to spend $1 billion to reduce worker exposures to vinyl chloride, a gas that may cause cancer. In fact, users were able to eliminate the substance for no more than $278 million.

When OSHA proposed limiting worker exposure to cotton dust, the industry warned that compliance would cost $2.3 billion. OSHA revised the rule and issued a projection of $280.3 million, which industry said was still too low. In the end, however, textile mills were able to reduce the risk to worker lungs for $82.8 million.

OSHA's 1987 rule on formaldehyde elicited cries that it would cost users $251.2 million. The OTA panel looked only at one large group of users -- metal foundries -- and found again that while OSHA had projected costs of $11.4 million, the affected companies eventually cleaned up their workplaces for $6 million.

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