Study: OSHA Officials Underestimated Cost of Silica Rule by $4.5 Billion a Year

May 2015

A new report released March 26 by the Construction Industry Safety Coalition found that the Occupational Safety and Health Administration’s proposed silica standards for U.S. construction industry will cost the industry $5 billion per year—roughly $4 .5 billion per year more than OSHA’s estimates. The coalition cautioned that the flawed cost estimates reflect deeper flaws in the rule and urged the federal agency to reconsider its approach.
    
OSHA’s proposed rule, intended to drastically reduce the permissible exposure limit of crystalline silica for the construction industry, has been underestimated by the Agency to cost the construction industry about $511 million a year. The new estimates released today by CISC estimate that the costs to the industry will actually be approximately 10 times the OSHA estimate—costing nearly $5 billion a year.
    
The cost and impact analysis from OSHA reflects a fundamental misunderstanding of the construction industry. The OSHA analysis included major errors and omissions that account for the large discrepancies with the CISC report. The CISC report estimates that about 80 percent of the cost ($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 of the cost ($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 such as concrete block, glass, roofing shingles and more. OSHA failed to take into account these additional costs to the construction industry that will result from the proposed standard, which will then be passed down to customers in the form of higher prices.
    
Not only will the proposed rule be more costly than originally estimated, but it would translate into significant job losses for the construction industry and the broader economy, according to the CISC. The CISC estimates that the proposed regulation would reduce the number of jobs in the U.S. economy by more than 52,700 yearly. That figure includes construction industry jobs, jobs in related industries such as building material suppliers, equipment manufacturers and architects, as well as losses in non-construction sectors. Additionally, the losses are full time employee positions. Factoring in the many part-time or seasonal jobs, that number could increase to close to 80,000 positions lost.
    
The full CISC report, which was also submitted to OSHA, can be found at www.nahb.org/silicareport.
    
The members of the CISC include the American Road and Transportation Builders Association, American Society of Concrete Contractors, American Subcontractors Association, Associated Builders and Contractors, Associated General Contractors, Association of the Wall and Ceiling Industry, Building Stone Institute, Concrete Sawing & Drilling Association, Construction & Demolition Recycling Association, Distribution Contractors Association, Interlocking Concrete Pavement Institute, International Council of Employers of Bricklayers and Allied Craftworkers, Leading Builders of America, Marble Institute of America, Mason Contractors Association of America, Mechanical Contractors Association of America, National Association of Home Builders, National Association of the Remodeling Industry, National Demolition Association, National Electrical Contractors Association, National Roofing Contractors Association, National Utility Contractors Association, Natural Stone Council, the Association of Union Constructors and the Tile Roofing Institute.