For the first time in decades, an incumbent Administration has pressed the brake pedal on the vast American regulatory machine. While the widespread nixing of destructive rules is a welcome first step, much work remains to be done. Major rules stand at the verge of implementation, with costly implications for producers and consumers alike.
In September, the Occupational Health and Safety Administration (OHSA) will begin to implement the “silica rule.” The rule, proposed in response to the very real problem of construction and manufacturing workers breathing in hazardous silica dust, would mandate a lower limit on the amount of silica dust to which employees can be exposed. Despite assurances to industry that implementation costs will pale in comparison to rule benefits, affected firms and their employees have rightly remained skeptical.
Regulators often start by pointing out a problem, such as silica dust, and claiming that it requires the heavy hand of the state. The pages of regulatory impact analyses are littered with mentions of “externalities,” “information asymmetries,” or general “market failures.” But, as decades of research has shown, pointing out an instance of the market failing is not a sufficient rationale for federal policing.
The silica rule is just the latest example of bureaucrats pursuing wrongheaded responses to real, albeit exaggerated problems. The proposed measures hoisted onto employers - including more medical exams and control exposure plans - may be worth it if avoided health care costs are large enough. If viewed in a vacuum, OHSA’s method of calculating these saved expenses is straightforward enough. The current number of silica fatalities is multiplied to the standard mathematical value assigned to life for each future year taken into account.
In real life, technical advances and improved wealth overall are rendering silica exposure far less hazardous as time goes on. Adjusting for age and population, the Centers for Disease and Control (CDC) estimates silicosis deaths in 2010 to be only five percent of the 1968 level.
Given the vast change in the exposure risk of silica over the past for decades, it would be logical to assume that OHSA would account for a continued decline in their projections. These sorts of educated guesses are actually required; OMB Circular A-4 instructs regulators to consider matters such as the “evolution of the market” and “changes in external factors” when forecasting a future absent regulation. Unfortunately, this seems to be the exception rather than the rule in cost-benefit analyses.
In addition, there have been drastic changes in the economic climate since the Nixon Administration. With the exception of the 2000s housing bubble, construction as a share of employment has been trending downward. Since OHSA characterizes the construction industry as ground zero of the silica exposure problem, the diminishing number of jobs in construction should be an important factor in forecasting the costs and benefits of proposed regulation.
In attempting to estimate benefits for the silica rule, OHSA included findings from multiple risk assessments of dubious quality. Specifically, the extent of silica abatement technology was left out of the analyses used in the RIA. OHSA freely admits that it “does not know the extent of respirator use in the risk assessment studies relied on for the benefits analysis, nor how they might differ from current respirator use.” These uncertainties fatally compromise the baseline analysis.
Other questionable assumptions are hidden just below the surface in a misguided analysis. OHSA relies on epistemological estimates to project the number of avoided lung cancer deaths under the proposed rule. One study, conducted by noted CDC epidemiologist Michael Attfield and Western Michigan University informationist Joseph Costello, examines morbidity and mortality due to silica exposure for granite workers in Vermont.
Unfortunately, Attfield and Costello’s period of analysis (1950-1982) makes conclusions hard to extrapolate to the present day. Smoking rates, for instance, were considerably higher in the mid-twentieth century than in the present day. As smoking can make the lungs and heart weaker and more susceptible to other risk factors, the study’s results are likely no longer applicable. And, since the scholars’ estimates are the highest estimates in OHSA’s range, the misleading figures serve to inflate the benefits of the proposed rule.
Even more alarming, Attfield and Costello’s estimates of mortality resulting from exposure are factored into OHSA’s analysis. But silica exposure deaths from the 1980s and 1990s (of workers employed from 1950-1982) are not reflective of medical advances over the past three decades. It is strange to assume that deaths from lung cancer and COPD have not declined over the past 25 years, and will continue to remain the same throughout the 45-year baseline period created by OHSA. Yet, these dubious assumptions are based into the RIA being used to justify policy.
As the estimation and subsequent implementation of previous rules have shown, agencies have proven incapable of reasonably estimating true costs of rules. Despite OHSA assertions that the silica rule will cost around $1.1 billion a year, other estimates suggests an annual compliance burden north of $5 billion. The federal government has already admitted to underestimating the paperwork burden by a factor of five.
The silica rule is just the latest product of the pressure placed upon federal economists to make regulatory benefits exceed costs to justify rules.
Fortunately, there are signs that the worst regulatory excesses are abating. As the American Action Forum has repeatedly documented, the volume of proposed rules has been on the decline. But rules already in the pipeline are still likely to suffer from flawed cost-benefit analyses. Reforming the process will not be easy, even as agencies come under the leadership of market-friendly appointees.
A sustained watchdog effort, coupled with greater public awareness of regulatory “cooked books,” can lead to better efforts by bureaucrats. The Trump Administration should take a good look at the silica rule and delay its implementation before employment moves overseas.
Ross Marchand is a policy analyst at the Taxpayers Protection Alliance
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