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Construction Coalition study: OSHA silica rule cost estimate off by $4.5 billion

The Occupational Safety and Health Administration’s proposed standards covering crystalline silica will cost contractors and their suppliers $5 billion per year—nearly $4.5 billion above estimates agency officials indicated in September 2013, when they outlined a new permissible exposure limit (PEL) for general workplaces and construction sites.

The Construction Industry Safety Coalition (CISC) calculates the shortfall in “Costs to the Construction Industry and Job Impacts from OSHA’s Proposed Occupational Exposure Standards for Crystalline Silica,” a report prepared for members and submitted to Assistant Secretary of Labor Dr. David Michaels. The cost and impact analysis from OSHA reflects a fundamental misunderstanding of the construction industry, CISC contends, noting how the agency’s analysis contained “major errors and omissions” that account for the large discrepancies with the study.

“We are deeply concerned about the misguided assumptions and cost and impact errors that OSHA has relied upon in creating this proposed rule that will significantly affect our industry,” says National Association of Home Builders Chairman Tom Woods. “This report reveals the critical need for OSHA to withdraw its proposed rule until it can put forth a technologically and economically feasible rule that also works to improve industry workers’ health and safety.”

“[It] clearly demonstrates OSHA’s lack of real world understanding of the construction industry and raises serious questions about their ability to responsibly craft industry standards,” notes Associated Builders & Contractors Vice President of Government Affairs Geoff Burr. “We hope this report will lead OSHA to work more closely with the construction industry to emphasize compliance with the current standard.”

In the event OSHA adopts the PEL set in the proposed rule, authors estimate that about 80 percent of the cost, or $3.9 billion/year, will be direct compliance expenditures by the industry such as additional equipment, labor and record-keeping costs. The remaining 20 percent, or $1.05 billion/year, will come in the form of increased prices that the industry will have to pay for construction materials and building products. CISC contends that OSHA failed to factor additional costs tied to proposed standard, which stakeholders will then pass on to customers in the form of higher prices.

“These errors raise serious and significant questions about many of the other assumptions the agency relied upon in crafting its new rule,” observes Associated General Contractors of America CEO Stephen Sandherr. “We need measures in place that are going to allow all of us to continue the significant improvements in silica safety the industry has made, and the sad truth is that the agency’s rule is too riddled with errors to do that.”

CISC estimates that the proposed regulation would reduce the number of jobs in the U.S. economy by more than 52,700 yearly.

The Coalition spans 25 trade associations representing virtually every aspect of the construction industry, from home building, to commercial and road construction, to heavy industrial production, to specialty trade contractors and material suppliers. Along with NAHB, ABC, and AGC, members include American Society for Concrete Contractors, Interlocking Concrete Pavement Institute and Mason Contractors Association of America. The full CISC report and letter to OSHA chief Dr. Michaels are posted at www.nahb.org.