On Safety

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Michaels says study on cost of regulations is ‘garbage’

October 2, 2014
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OSHA administrator David Michaels called a recent study into the cost of regulations “unfounded,” but the organization that commissioned the study stands by its claims.

The National Association of Manufacturers states in the report that occupational safety and health regulations cost employers about $71 billion annually, with manufacturers and small businesses sharing a disproportionate share of the compliance costs.

During a press briefing with reporters at the 2014 NSC Congress & Expo in San Diego, I asked Michaels about the NAM study.

“It’s absolute garbage, and you can quote me on that.” Michaels said. “It’s embarrassing to the National Association of Manufacturers to put out a study like that.”

Michaels said the study simply recycled bad data, and the OSHA-related costs in the NAM report come from a previous study that included standards the agency has never put out. The data, he said, is “not based on any facts.”

Unsurprisingly, NAM disagrees with Michaels’ assertion.

“Its overall conclusion that small businesses and manufacturers face a disproportionate regulatory burden is almost universally accepted, and political leaders of both political parties wisely see sensitivity to small businesses as smart economic policy,” Chad Moutray, NAM’s chief economist, said in an email to me.

The study, which was released Sept. 10, includes updated methodology and new data, according to Moutray, and its review of safety regulations includes “all those that OSHA enforces against companies.”

He said NAM encourages the study’s critics to develop their own estimates of regulatory costs, and that additional research would be beneficial to stakeholders. Additionally, Moutray stressed that the study “does not question” the health and safety protections offered by regulations.

However, the report does not cover potential benefits of federal regulations – only the costs. A study simply focusing on regulatory costs without considering benefits certainly appears to be questioning such regulations. It’s akin to focusing only the cost of, say, a gym membership without considering the health benefits of the membership. It’s only looking at half the picture.

The opinions expressed in "On Safety" do not necessarily reflect those of the National Safety Council or affiliated local Chapters.

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