- The Washington Times - Tuesday, June 13, 2000

Battle lines are being drawn for what could become the new millennium's first major regulatory confrontation between government and business the Occupational Safety and Health Administration's (OSHA) proposed new ergonomics standard expected to become final this summer. OSHA says the 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.

Business groups say OSHA grossly understates the costs while overstating the benefits of the sweeping new standard. But before the war begins, let's take a closer look.

The stated purpose of OSHA's proposed ergonomics standard is to reduce the large number and severity of work-related musculoskeletal disorders (MSDs). Originally the focus was on ailments such as carpal-tunnel syndrome hand problems caused by repetitive stress. Later it was expanded to a wide variety of stress and strain maladies like backache and tendonitis.

Few will argue that MSDs some permanent are trivial or unworthy of preventive measures. Indeed, major corporations have been working on the ergonomics problem for years because of their obvious self-interest in having healthy workers, both for reasons of workplace cost and positive employee relations. Progress has been steady, with the number of reported MSDs dropping from 750,000 in 1992 to less than 600,000 in 1997. OSHA claims the proposed standard would reduce the number of MSD injuries by 300,000 per year averaged over 10 years some of the gains likely coming from existing industry trends.

While industry groups have attacked many of the elements of OSHA's proposed rule, the major issues in the ergonomics debate come down to two: c OSHA implies in its standard that it knows how to fix the problem: enforced dedication to solutions by management, new equipment, employee training and the threat of an expanded compensation procedure for injured employees under the rule (up to 90 percent of pay and benefits for six months). Industry argues it is fixing what it knows how to fix and that many causes are unknown and may not even be work-related.

• OSHA reports that the cost of the new ergonomics regulations would be approximately $4.2 billion per year and would bring annual benefits of $9 billion from higher productivity and fewer lost-time injuries. Industry argues that the costs could well be 10 times higher or more and that benefits are overstated.

For example, the Employment Policy Foundation (EPF) estimates the costs between $35 billion and $99 billion per year. A consultant for the Small Business Administration (SBA) puts the costs anywhere from 2.5 to 15 times higher than OSHA's estimates. The Association of Food Distributors International (FDI) estimated the cost between $384 million and $22 billion per year for their membership of 800 distribution centers alone. The FDI estimates for one kind of work site cannot, of course, be extrapolated to the more than 1.9 million sites covered by OSHA, but the arithmetic is instructive: Using FDI's low-end range, the cost for 1.9 million locations would be $1 trillion. Even cutting the cost to 10 percent of FDI's estimate, the total cost for employers would be $100 billion.

On the benefits side, after correcting for only one of OSHA's assumptions, which they believe to be inaccurate, EPF estimated 10-year cumulative benefits at half of OSHA's $69.5 billion. The consultant for SBA estimated that preventing one MSD saves only one-seventh of OSHA's estimate of $22,546 per case.

Where does this leave us? No matter which formula is used, the OSHA costs seem greatly understated and benefits at least somewhat overstated. But worse, OSHA has decided to impose a series of far-reaching and expensive regulations to "solve" a problem that will be partially solved by existing industry momentum. In any case, it will likely not be solved by their prescription of forms, reports and management training in a "one-size-fits-all" process despite their claims of "flexibility." In my experience as CEO of a major corporation, I could not impose a "uniform safety solution" even within my own company. The best results came when the managers were motivated to solve their employee safety problems with local solutions based on priority support from top management and good information as to what had worked elsewhere. People who work in facilities don't want to be unsafe; they want help to let them adapt practices to make them safe.

There is a solution to this coming OSHA-business impasse. OSHA could provide an invaluable service by doing two things:

• Collaborating with the National Institute for Occupational Safety and Health (NIOSH) in the Department of Health and Human Services to conduct serious studies into the real causes of MSDs. Some studies have been done but many more are needed.

• Providing a clearinghouse for collection and dissemination of research and industry experience on "what works" in dealing with ergonomics problems particularly for small business. OSHA has issued a few well-written individual case studies but they claim there are more than 100 classes of injuries to be dealt with.

In the absence of these positive steps, we will invariably find a protracted battle among regulators, business, Congress, and the courts "settling the issue" while avoidable injuries continue.

If OSHA persists in its bureaucratic, one-size-fits-all form and process-laden proposal instead of using its considerable skill and resources to really help by being a reliable source of best practices it will reinforce the fear employers feel when they hear, "I'm from the government and I'm here to help." Wouldn't it be a refreshing change to hear that same phrase and believe it?

Richard J. Mahoney is the distinguished executive in residence at the Center for the Study of American Business at Washington University in St. Louis and the former CEO of Monsanto Co. He is the co-author of "Ergonomics by OSHA.Ergo, Outgo by Business

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