JUDGE SOLOMON:  Do you have a copy of the transcript of what occurred
last week?

		MR. RATH:  Judge, if I may, the National Association of Manufacturers
was present at proceedings last week.

		JUDGE SOLOMON:  Who was here?

		MR. RATH:  Amanda Wood was here as well, and I was here as well, and
other members of Keller and Heckman were here.

		JUDGE SOLOMON:  Okay.  So that's what you got from the proceedings
last week?

		MR. RATH:  Yes.

		JUDGE SOLOMON:  And you're a lawyer?

		MR. RATH:  Yes.

		JUDGE SOLOMON:  Did you write this?

		MR. RATH:  No, I don't think I did.

		JUDGE SOLOMON:  Okay.  And the last question that I have, and this
again, is in the interest of justice, how many of -- are there members
of NAM who are in the engineering control manufacturing business?

		MR. TRAUGER:  I'm certain there are.

		JUDGE SOLOMON:  So are there any questions that you would ask based on
what I would ask?

		MS. KRAMER:  No, Your Honor.  Thank you.

		JUDGE SOLOMON:  Okay.  Thank you very much.

		MR. TRAUGER:  Thank you.

		MR. RATH:  Thank you, Judge.

		MS. WOOD:  Thank you.

		MS. KRAMER:  Your Honor, could we go off the record momentarily to
allow the panel a chance to kind of --

		JUDGE SOLOMON:  Sure.

		MS. KRAMER:  -- switch?

		JUDGE SOLOMON:  Sure.  Let's -- it's 3:26, so at 3:31, we'll come
back.

		(Off the record at 3:26 p.m.)

		(On the record at 3:31 p.m.)

		JUDGE SOLOMON:  Okay.  We're back on the record.  Mr. Frumin, you
have 15 minutes.

		MR. FRUMIN:  Yeah.

		JUDGE SOLOMON:  You're going to take the whole 15 minutes?

		MR. FRUMIN:  About that.  Yeah.

		JUDGE SOLOMON:  Okay.

		MR. FRUMIN:  So I just want to mention, I have some additional
documents to present after I say my statement.

		JUDGE SOLOMON:  If you want to give them to me now, that's fine.  If
you want to give them --

		MR. FRUMIN:  I'll do it after.

		JUDGE SOLOMON:  Do them later?  Okay.

		MR. FRUMIN:  I just didn't want to forget to mention that.

		JUDGE SOLOMON:  Go ahead.

		MR. FRUMIN:  Good afternoon.  My name is Eric Frumin.  I'm the Health
and Safety Director for Change to Win.  We appreciate this opportunity
to testify.  Our written statement is in the record.  I'm just going to
read a few brief highlights from it just for emphasis purposes and then
provide some additional information that was not part of the written
submission prior.

		First we want to say we strongly support the proposal.  We have some
concerns about it, and we agree with the concerns that have been
expressed by the AFL-CIO and its testimony, but we're very pleased that
OSHA has finally seen fit to make this proposal.

		I'm addressing largely the question of OSHA's use of the value of
statistical life to estimate the monetary value of life for workers'
lives.  OSHA has, in recent years, undertaken detailed economic analyses
to estimate the monetary so-called value of the benefits of its safety
and health standards following an explicit directive from OMB in 2003,
Circular A-4.

		These actions by OMB and OSHA raise several important questions.
First, how does the conduct of such analyses affect the already severely
limited resources available to OSHA to identify unregulated hazards and
propose new rules to stop injuries and illnesses that these hazards
inflict on workers and their family?

		Second, does the conduct of such analyses create either the appearance
or the reality of the actual balancing of the cost to employers against
the so-called monetized value of the benefits to workers and their
families and communities?

		And, third, is OMB forcing the Secretary of Labor to rely on
theoretical approaches which are rife with uncertainty and for which
mainstream economic analyses have repeatedly found alternative and
contradictory evidence?

		Well, with regard to the first question, OSHA's failure to promptly
implement its own regulatory agenda results in part from inadequate
resources.  A recent example is that of OSHA's failure to deal with
highly explosive so-called reactive chemicals.

		This has been going on for 18 years.  It has drawn repeated criticism
from the Chemical Safety Board, from the Congress, from the media, and
it was only with this massive disaster at West Texas last year and the
horrific loss of life and property that the White House and/or the
Office of Management and Budget finally relented and allowed OSHA and
EPA to begin working on closing this loophole on an expedited basis,
naturally, now that the town of West Texas was blown up and we lost a
horrible -- in a horrible incident, lost a dozen firefighters.

		However, as regrettable as that record has been on reactive hazards,
the Administration continues to fail to take affirmative action on the
other major hazard -- industrial explosions that stalks the American
workplace, which is combustible dusts.  We still have no standard, not
even the convening of an employer panel under SBREFA on combustible dust
issues.  So we have not been provided with any reasonable explanation
for these incessant and unacceptable delays.

		I've already raised the question about the inappropriate and illegal
balancing of costs versus benefits as a result of doing the analyses.
It's very troublesome.  We know the Agency says that they don't use
these analyses for making decisions about their -- the proposal and the
alternative provisions that it might have included.  Nonetheless, the
appearance certainly is there.

		One issue that has been in the background of the whole question of
monetizing benefits of assigning a dollar value to human life is the
question of involuntary work.  So I want to talk about that for a
minute -- a few minutes.

		Involuntary work has been a feature of American society and politics
ever since the first slave landed on our shores and actually since the
first indentured servants did as well.  It had a major role in the
development of American industry in the Industrial Age after the Civil
War.  And a Pulitzer Prize-winning book Slavery by Another Name, has
identified that -- the importance of involuntary labor, what the author
calls neo-slavery in the emergence of the metal and mining industries in
the South.

		One might easily ignore this history and say, well, that's all in the
past, but actually, it's quite relevant today because involuntary labor
is still rampant in parts of the U.S. economy.

		Indeed, as evident from the BLS data that I submitted with my
testimony, there are starkly disproportionate death rates among Hispanic
workers and especially foreign-born Hispanics.  One recent example in
the metalworking industry, an industry of some importance to this
rulemaking, shows that the industries that were in the grip of
neo-slavery 80 years ago are still suffering from it in the modern era.

		Ten years ago, the New York Times and PBS Frontline won a Pulitzer
Prize for their revelations about a huge iron pipe company founded in
Birmingham, Alabama in 1921.  This company, the McWane Company, had
accumulated the worst record of death, injury, and OSHA violations in
the nation.

		The most severe of those crimes, at least as measured by the resulting
prosecutions, were not even in the South, not in Texas, not in Alabama,
but in New Jersey.  The five managers of McWane's subsidiary in
Phillipsburg, New Jersey, Atlantic States Cast Iron Pipe, were recently
convicted of conspiring to violate the OSHA law and various
environmental laws and other federal criminal statutes.

		The plant manager is now serving a five-year sentence, the longest --
one of the longest ever meted out to a corporate manager for
OSHA-related crimes in U.S. history.

		The record evidence, including the multiple indictments, testimony,
and verdicts at McWane, is riddled with fear and intimidation.  In what
the Grand Jury termed a, quote, "conspiracy" over an eight-year period
among the plant manager and other managers, they conspired to, quote,
"obstruct the administration of the law" by OSHA and to violate multiple
environmental laws, quote, "for the purpose of maximizing the production
of cast iron pipe at the Phillipsburg facility without concern to
environmental pollution or worker safety," unquote.

		Count Number 1 of the indictment says that they conspired to enrich
themselves by, quote, "utilizing tactics of intimidation and retaliation
to coerce employees into committing," unquote, multiple felony
violations of environmental laws.

		And then the conspiracy indictment has an entire section with a
subheading Atmosphere of Fear, Intimidation, and Retaliation.  I'm just
going to read through a few sections of that to show the current
relevance of this question of involuntary labor.

		From 1999 to 2003 -- this is Counts Number 75 through 78 of the
indictment.  From 1999 through 2003, on a routine and regular basis, the
defendants took steps to deter employees from telling OSHA inspectors
about unsafe conditions, instructed employees to provide misleading
descriptions and accounts to OSHA inspectors to conceal the unsafe
conditions at the plant.

		From 1997 to 1999, they threatened to fire employees if they pursued
workers' compensation claims against McWane following injuries suffered
at work.  And from 1999 to 2003, in order to intimidate employees into
committing and to prevent them from revealing the company's violations,
the managers instructed midlevel supervisors to instill fear in the
employees by using retaliation tactics and utilize coercive measures
which included: (a) assigning employees to work on the casting machine,
the hottest machine in the plant as punishment; (b) assigning
Spanish-speaking workers to work in the most dangerous parts of the
plant; (c) forcing employees to douse themselves with water and realign
pipes in the 2000 degree Fahrenheit annealing oven.

		These are not temporary or exceptional practices of a minor,
incidental employer in an industry of no consequence or in a rural or
isolated region.  They were the repeated practices by one of the leading
employers in a well-known industry in a highly populated region with a
relatively diverse economy, a long history of worker and union activism
and worker access to the media and government services.

		However, these facts appear to offer little discomfort to the Office
of Management and Budget, to Professor Viscusi, their leading theorist
on the value of life or on others advocating the so-called compensating
wage differentials to estimate the value of life.

		Viscusi and his colleagues appear to believe that even these workers
at McWane were (a) aware of the conditions and management practices at
the time they signed up; (b) made fully informed, rational choices to
work under these conditions; (c) freely continued to subject themselves
to these conditions; and, last of all, were fully compensated for the
abuses they endured, including amputations, broken limbs, and death.	 In
Viscusi's world, there is simply no possibility of non-consensual work
arrangements.

		Dr. Peter Dorman, who unfortunately is not able to testify today,
submitted testimony regarding the work of Viscusi and other theorists
regarding evaluation of life.  And as he points out, he and other
mainstream labor economists have long since concluded that this theory
is simply nonsense.  It is not supported by the evidence.

		My testimony also discusses the involuntary work that was well
identified at the Massey Coal Company, an industry of some consequence
in the world of worker health and safety.

		Why is involuntary work relevant to this proceeding?  Well, not only
because it is addressed or not addressed, as the case may be, by the
authors of this fanciful method, but also because the Office of
Management and Budget specifically raises the question of
involuntariness of work in Circular A-3, which is the operative
instruction to OSHA and MSHA and other health and safety agencies.

		And it says, quote, "There is a continuing debate within the economic
and public policy analysis community on the merits of using a single
value of statistical life.  A variety of factors have been identified,
including whether the mortality risk includes sudden death, fear of
cancer, and the extent to which the risk is voluntarily incurred."

		Footnote 18, let's look at Footnote 18.  Distinctions between, quote,
"voluntary" and, unquote, involuntary should be treated with care.
Risks are best considered to fall within a continuum from voluntary to
involuntary with very few risks being at either end of the range.  These
risks are also related to the differences in the cost of avoiding risk.

		So the evidence at McWane and elsewhere makes clear that involuntary,
coerced, and impotent labor is a vibrant and corrosive component of the
American labor market generally and within key sectors as well,
including, thank you, construction and other sectors affected by the
proposed standard on silica.

		Given the long history of involuntary work, it's vital that OMB and
the agencies that govern acknowledge the role of involuntariness in the
U.S. labor market and reject regulatory approaches which assume
otherwise.

		So the theory of compensating wage differentials as it applies to
occupational safety and health simply does not deserve the uncritical
praise it receives in OMB's directives, much less the force of law in
executive agency rulemaking.  It is long since time for OMB to stop
accepting Viscusi's flawed methods and conclusions and to stop forcing
them down the proverbial throats of the economists, policymakers,
epidemiologists, and scientists at OSHA and elsewhere.

		Indeed, OMB and OIRA should facilitate efficient rulemaking at the
Department of Labor and elsewhere in order to finally close the
decades-long gap in critical safety and health standards consistent with
a congressional intent to place primary value on the lives and health of
workers.

		JUDGE SOLOMON:  Right on time.

		MR. FRUMIN:  Yeah.  So now, I'd like to put into the record a few
additional materials I was not able to include in my comments.

		JUDGE SOLOMON:  Okay.

		MR. FRUMIN:  First is -- and they all relate to the incident which is
mentioned in the Preliminary Impact Analysis -- Economic Analysis and
the Quantitative Risk Assessment, the incident at the Gauley -- at
Gauley Bridge in West Virginia in 1929.  That incident is also mentioned
prominently in the film that OSHA has on its website of Secretary
Perkins discussing the terrible fear of silicosis that was alive and
well, including the national conference that she convened in 1937-38.

		So one thing I have is a -- what -- I have to say, what appears to
me to be the transcript of the hearing that the U.S. House Education and
Labor Committee held on January 16th-17th, 1936 in Washington, D.C.
investigating the conditions at the Gauley Bridge disaster.

		It's a little difficult to find that hearing online, but I was able to
find it at an archive of the University of Illinois devoted to the poet,
Muriel Rukeyser, who wrote about that incident.

		MS. KRAMER:  Your Honor --

		MR. FRUMIN:  I have three documents all together.

		MS. KRAMER:  -- just to make sure that I don't get out of order
here --

		MR. FRUMIN:  Yeah.

		MS. KRAMER:  -- Your Honor, I'd like to mark this transcript as
Hearing Exhibit Number 50 and have it admitted to the record.

		JUDGE SOLOMON:  Okay.  As there's no objection, so admitted.

(Whereupon, the document referred to as Hearing Exhibit 50 was marked
and received in evidence.)

		MR. FRUMIN:  Okay.  The second is a chapter in a book that I wrote
that was published in 1980 concerning the Gauley Bridge disaster.  The
book is called Working Lives published by the Institute for Southern
Studies.  And so I just realized I don't -- I did not -- I failed to
include the notes for the chapter.  I can submit those later in the
post-hearing comments, but the text itself is there.

		MS. KRAMER:  Your Honor, we'd like to mark this as Hearing Exhibit
Number 51 and have it admitted into the record.

		JUDGE SOLOMON:  So admitted.

(Whereupon, the document referred to as Hearing Exhibit 51 was marked
and received in evidence.)

		MR. FRUMIN:  And then the last is a photocopy of a novel that was
based on the events at Gauley Bridge by Hubert Skidmore, who was a West
Virginia historian.  It's called Hawk's Nest, which was the name of the
region where the tunnel was built.  This was published by the West
Virginia Heritage Foundation.  The novel has since been republished by
the University of Tennessee.  So that's one version of it.  It's a
photocopy version.

		MS. KRAMER:  Your Honor, rather predictably, we're up to Hearing
Exhibit Number 52.  I'd like to have this marked and admitted to the
record.

		JUDGE SOLOMON:  So admitted.

(Whereupon, the document referred to as Hearing Exhibit 52 was marked
and received in evidence.)

		MR. FRUMIN:  And to save you all a lot of work, here's a CD with all
of those three documents on it.

		MS. KRAMER:  Thank you.

		JUDGE SOLOMON:  Okay.  So how many people are going to ask questions
this round?  Okay.  Three people.  Come on down.  Okay.  State your name
and --

		MR. KOJOLA:  Sure.  My name is --

		JUDGE SOLOMON:  -- spell your last.

		MR. KOJOLA:  -- Bill Kojola, K-o-j-o-l-a, and I'm representing the
National Council for Occupational Safety and Health.  And I have several
questions about involuntary labor.

		Your testimony discusses the involuntary nature of labor in various
industry sectors.  Among the sectors in which you have some personal
experience, have you seen evidence of workers suffering coercion,
intimidation, or other forms of involuntary labor at the hands of
employers?

		MR. FRUMIN:  Well, I've worked for roughly four decades in industries
in which low wage work predominates.  This is the garment and textile
industry, industrial laundries, warehousing.  So not industries with a
big stake in the silica question, but industries which I think bear a
lot of resemblance in their industrial relations, human resource
practices to those that I discussed in my testimony.

		And I've observed employer coercive behavior up close many, many
times.  I spent a lot of time in small towns where the mill was the only
job in town.  Often in rural regions, often in the South, but in other
parts of the country as well.  And it's truly a frightening thing to see
people so dehumanized that they are afraid to even talk to you or look
you in the eye when they're describing what are often pretty horrendous
conditions because they can't face the fact that they are submitting
themselves to these conditions on a daily basis.

		I've also had a lot of experience with trying to convince workers,
often workers not in any union setting, but workers who were lacking any
other form of protection, to talk to OSHA about their problems and
literally seen people shaking with fear at the thought of talking to the
inspector on the other end of the line.

		So that's from my personal experience and that's -- that hasn't gone
away.  I mean I'm -- this is still going on daily in industries where
workers are struggling to be heard, to be freed from the kinds of
coercive conditions they're dealing with.

		We've seen some very important recent examples, for instances, in the
warehousing industry in California and other places around the country
where the use of retaliation to stop workers from speaking out about
their abusive conditions is still a frequent practice and practiced by
very large, sophisticated employers advised by large, sophisticated law
firms, and so this problem is rampant and alive and well.

		MR. KOJOLA:  Thank you.  Your testimony and then your comments this
afternoon discuss the BLS Census of Fatal Occupational Injuries, or
CFOI, including the evidence experience of increased risk among Hispanic
workers for, you know, fatal, acute injuries at work.  How important is
that evidence in any evaluation of statistical estimates of wage
differentials imposed by OMB on executive agencies like OSHA and MSHA?

		MR. FRUMIN:  Well, in May, there was a conference by the BLS
celebrating the 40th anniversary of the BLS data -- injury illness data
system.  And Dr. Viscusi, the prime author of this methodology of
assigning values to human life, was a speaker there.  And he went on at
some length about the incredible importance of the BLS data, their
fatality data in deriving what he thought were the reliable estimates of
wage differentials and therefore his ability to somehow magically assign
a dollar value to human lives.

		So on the one hand, the very author of this method himself says that
it's very important.  If we're looking at using fatality data rather
than other measures of danger at work, there's no question that the BLS
census is the most valuable source of information we could work off of.
No one else comes close to it.  So just as a baseline, it's extremely
important.  And my testimony does include a study they published showing
the differential risk to Hispanic workers.

		What was really interesting -- including foreign-born.  What was
interesting at that conference was that there was a poster session which
apparently has not yet been converted to a published paper, so I hope
that happens before this rulemaking is over, where the same author,
Christen Byler, one of the staff economists at BLS, looked in greater
detail at the BLS fatality data.

		And she was able to find statistically significant hazard ratios for
foreign-born Hispanic workers compared to not, for foreign-born workers
in general compared to native-born workers, and was able to find
statistically significant differences in the risk of death depending
upon which countries -- from which countries the workers immigrated.

		So big surprise, Latino workers from Mexico, Central American, and
non-Latino but immigrant workers from Africa had the highest risks, all
statistically significant.  And workers from Europe somehow didn't,
which probably says a lot about racism being as alive and well in
America as involuntary work.

		I've requested that study from BLS.  I was hoping it would be ready
for prime time for this -- for today.  I didn't get a response yet.
Perhaps OSHA can get it, but it's a remarkable study with its precision
in which it teases out the extra risk assigned to immigrant workers.

		Well, anyone who, you know, reads the papers has got to understand
that immigrant workers face special risks of intimidation at work.  I
think that -- we take -- we need to take that as a tautology in modern
American life.  So she didn't have the I-9 status of all those dead
people, but she certainly was able to know the difference between the
foreign-born and not.

		MR. KOJOLA:  And my last question, how recent is the evidence of
severe coercion in American workplaces?  Is this a -- largely a problem
over the past or is this a -- is there recent evidence that this is
going on?

		MR. FRUMIN:  Well, I've addressed some of that.  I -- yeah, I think
I've -- I don't think I can add to what I said before.

		MR. KOJOLA:  Okay.  All right.

		MR. FRUMIN:  Yeah.  Sorry.

		MR. KOJOLA:  That's okay.  Thank you.

		JUDGE SOLOMON:  Next.

		MS. REINDEL:  Hi.  I'm Rebecca Reindel, R-e-i-n-d-e-l.  I'm here
representing AFL-CIO.

		Mr. Frumin, your testimony states that the estimates required by
OSHA -- required to OSHA by OMB have been rejected by other economists,
at least in part because of results found by Viscusi and others, used by
Viscusi, are contradicted by other economists.  How strong is the
contrary evidence?

		MR. FRUMIN:  Well, apparently, it's pretty strong.  I mean I'm not a
professional economist.  I've looked at some length at the work of those
economists who have studied it and are not big believers in it.
Dr. Dorman, unfortunately, is not here today.  So his testimony will
have to speak for itself.

		But he cites quite a few studies to -- including his own empirical
evaluations of basically the same dataset that Viscusi had, and shows
that the results come out very, very differently.

		In fact, what he identifies is basically sort of a cherry-picking
phenomenon by the economists who support this theory.  They are
willing -- they're happy to look at some variables, but not other
variables.  When they look at the other variables, like they took
industry into account, all of the sudden, their wage differentials
evaporate and their results just, you know, become meaningless.

		So I think the critique is very strong.  It's certainly strong enough
that one wonders how it is that this singular source of guidance upon
which OMB relies could be -- remain unchallenged in any significant way
at OMB for all of these years.

		Now, fortunately, it's a matter of record in this proceeding and in
prior proceedings at both -- at OSHA and also at MSHA that there are
concerns about the reliability of Viscusi's methods.  OMB barely
discusses them.  OSHA discusses them some more.  MSHA discusses them
more, but I think we've seen a very unbalanced review of the evidence.
Dr. Dorman's testimony will help rectify that, but it remains to be
seen whether the contrary evidence is going to get the consideration to
which it's entitled.

		We have an extensive analysis of the so-called benefits of this
standard and other standards based upon this theory, which does not
have, in my view and many others, adequate empirical support.  So
there's quite a disconnect here, and I think it's long since time for
OSHA to request guidance from OMB regarding the legitimacy of the
methods that OMB imposes.

		I might have asked that question to OSHA on opening day.  I'm not sure
I got that far in my questions.  We'll have to take a look at the
transcript, but I think it is important to determine, as part of this
rulemaking, whether or not OMB provides adequate guidance to OSHA
regarding the limitations of the very method which OMB imposes, because
if OMB is not doing that, then it's a very one-sided proposition and not
worthy of the scientific legitimacy of this proceeding.

		MS. REINDEL:  Okay.  Thank you.

		JUDGE SOLOMON:  Mr. Frederick?

		MR. FREDERICK:  I'm Jim Frederick with the United Steelworkers.  It's
F-r-e-d-e-r-i-c-k.

		And, Mr. Frumin, just a couple of follow-up questions from an earlier
set of questions regarding coercion in the workplace.  And kind of
specifically taking into account your experience of 40 years in working
in the labor movement with workers in various workplaces, to understand
a workplace that might have a medical monitoring program like those with
silica exposure in the future.

		Would the practices around coercion be a problem of ensuring fair and
equal participation by those workers on a voluntary basis in a medical
monitoring program?

		MR. FRUMIN:  Well, this is certainly not the first time that question
has arisen.  First, we heard the answers from the workers who were here
today from the construction industry talking about their fears of
revealing private medical information to an employer if it would
indicate doubts about their ability to work.  So I think that's a very
natural reaction.

		Anybody who -- on whom others rely to feed them and clothe them and
house them, you know, has got to be concerned about that in any rational
way, never mind in an economy with, you know, permanent eight percent
unemployment or something.

		However, it's worth noting that this question has come up historically
in standard setting proceedings under the OSHA Act.  And in 1977, OSHA
proposed a standard on limiting a different kind of dust from the
processing of cotton fiber.

		And at that time, we raised this question as well because the vast
majority of textile workers (a) are not represented by labor unions; (b)
are poor; (c) work in company -- in large mills in small towns, often
live in company housing.  You know, this is -- the question of coercion
is not a theoretical one to them at all.

		We, at that time, pointed out to the Secretary of Labor the urgency of
replicating in OSHA's standard on cotton dust the arrangement that was
adopted in the Coal Mine Health and Safety Act for regular monitoring of
coal miners for coal worker's pneumoconiosis, which is that the employer
pays but doesn't get the results.  It's up to the worker to get the
results and bring it to the employer.

		And OSHA did not see fit to adopt that model.  They gave a fairly
lame -- that's not too much a term of art -- a lame excuse as to why
they simply said we're going to rely on company doctors to do a good
job.

		Well, fortunately that standard had a good exposure limit.  The
textile industry was modernizing and needed to reduce the dust in its
machinery, and thanks to the standard, the incident of byssinosis, as
it's called, was dropping dramatically by the mid-'80s.

		But I did observe workers who refused to participate in the medical
surveillance even in union mills where they had pretty -- where we
negotiated contract language to offer them jobs with maintenance of pay.
 And that was in a setting where people were pretty well informed, where
the employers were trying to, you know, supposedly cooperate.

		So I think this is a serious policy problem for OSHA.  There is a lot
to learn from the coal mining example and I think applies well in an
industry like construction where people are often likely to move from
employer to employer, notwithstanding the fact that other people are
going to stay for decades, as we heard this morning.

		And I would encourage the Secretary to take very seriously the
opportunity to break with what has been an inadequate protection for
worker privacy and move us into a modern era for worker privacy for
medical records.

		MR. FREDERICK:  Thank you.

		JUDGE SOLOMON:  Okay.  Thank you.

		Ms. Kramer?

		MS. KRAMER:  Your Honor, I'm going to hand it over to David O'Connor.

		MR. O'CONNOR:  Bob Burt has a few questions for OSHA.

		MR. BURT:  Hi.  Just wanted to ask a few questions about your
testimony.  One issue, before I turn to the value of statistical life
issue, I wanted to ask about a couple other things that influenced
calculations of benefits.

		One, for example, is the choice of a discount rate.  The -- one of
the prescribed discount rates by OIRA is seven percent.  This is very
important because it means a life lost 20 years from now is worth
one-tenth what one is today.  Is this an area you have any further
thoughts on, this use of discounting procedures for --

		MR. FRUMIN:  No, I'm not in a position to comment on it for a couple
of different reasons, but I'll save time and just say I can't comment on
it.  No.

		MR. BURT:  Another issue for the analysis is precisely because of this
discounting, OSHA needs to make estimates of the exact timeframe of --
in which lives will be lost, taking account of things like legs and
amount -- portion of a life someone exposed.  Again, do you have any
thoughts on that aspect of benefits analysis?

		MR. FRUMIN:  Yes.  I have strong opinions on that aspect and even a
few facts.

		It appears that OSHA's efforts to accommodate these uncertainties
regarding the epidemiology of a disease, you know, require something
more than incidental efforts.  They require some number of OSHA
economists and health scientists to wrestle with the very questions
you've posed.

		Those -- that time, however long it is, would be better spent trying
to figure out what else is killing and injuring American workers and how
to protect them.  So I'm very concerned that the application of the OMB
directive and the fact that it ties up the very limited resources of
staff time at OSHA to answer these insane questions for which there are
no ethical answers, that this needs to stop and OMB needs to let you go
on and do your job to deal with the other things that are unregulated.

		MR. BURT:  We're -- let me ask a real broad question.  You don't
propose any alternative values of statistical life.  Is this because you
think we shouldn't be monetizing at all or that there are not good
alternatives, or what is your view on what OSHA should do, on what OIRA
should do in that --

		MR. FRUMIN:  Right.

		MR. BURT:  -- respect?

		MR. FRUMIN:  Well, I think it's very important that OSHA have a -- as
firm a grip as it can reasonably get on the benefits of its proposed and
final standards.  The courts have held and common sense tells us that we
want the agencies to -- regulatory agencies in general, and OSHA
obviously in particular, to adopt the most cost-effective standards that
it can.

		And to do that, you need to have an idea of what your goal is.  What
is it we're trying to achieve?  So we -- it's very important to be able
to make a comparison of the cost to the benefits, but not to balance
them.

		If you don't need to balance them, if you don't need to compare apples
to apples, dollars to dollars, then you don't need to monetize at all,
and you can do a cost effectiveness analysis consistent with your
mandate as you've described it, with the way the Supreme Court described
it, and ignore the entire debate about monetization.

		So that would be my proposal as an alternative.  Drop monetization
entirely.  Go do something useful and still fulfill your commonsense and
legal requirement to do a cost effectiveness analysis.

		MR. BURT:  Thank you.  In the VSL, value of statistical life -- sorry
for the -- all the jargon -- you talk about the involuntary work.  And
I just want to link up two halves there.

		In the model that I would say Viscusi always follows -- but the core
picture of that model is these persons in these jobs should have simply
quit and gotten another job.  Why didn't that happen?

		MR. FRUMIN:  Well, behavior in the labor market is a really
interesting subject, and there are a lot of economists who study it.  I
can give, you know, a personal opinion based upon observations.  I'm not
a labor market economist.

		Dorman's testimony goes into some length about it, so I'd be happy to
convey your question to Dr. Dorman and see if he has an additional
answer beyond that which is in his testimony.

		But I think what he finds, what he reports, I mean, in his testimony,
is that there are economic models for the labor market, one called the
search theory which takes into account such matters as choice of job,
internal dynamics within the firm after people work -- start working
there.  And when one looks at those models for evaluating wages and
compensation, they provide results that are contradictory to both the
theory and the underlying methodology that Viscusi and the others that
believe in compensating wage differentials come up with.

		But I can -- I think that's a fairly short question.  I can try to
convey it to Dorman.

		My personal experience is, from talking to many workers who've -- you
know, who are working on lousy jobs is, you know, they don't see an
alternative.  If it's a one-horse town, you know, where the hell are you
going to go?  If you're 50 years old and you're trained to do a certain
thing, you don't have much of a choice.

		MSHA has specifically critiqued the value -- the use of the -- this
theory because of its concern about monopsony labor markets where
there's only one employer, which is not an uncommon issue with rural
employment in mining or other industries.  So I think there are a lot of
answers to that question.  Some of them are pretty obvious.

		MR. BURT:  Thank you.  You mentioned you'd be willing to ask a
question or two about Professor Dorman's article.

		MR. FRUMIN:  Sure.

		MR. BURT:  Two -- one, just a request.  On Page 3, there are
references to a Lang and Majumdar article, 2004; Dorman, 1998.  I think
these address the -- what you were just saying.

		MR. FRUMIN:  Right.

		MR. BURT:  Be very valuable to be sure these are in the record.  We'll
try to pull them, but if it's -- if you have them available, that would
be great.

		MR. FRUMIN:  I do have them.  I can submit them, but my impression was
that he had submitted them as attachments to his testimony.

		MR. BURT:  Okay.  I'll check.

		MR. FRUMIN:  Yeah.  So if -- so I -- I'm sorry.  Go ahead.

		MR. BURT:  Yeah.  That was Page 3 of Professor Dorman's statement I
was referring to.

		MR. FRUMIN:  So if -- we can figure this out here.  So that's Lang
and Majumdar and the other was?

		MR. BURT:  The Dorman --

		MR. FRUMIN:  Dorman, '98?

		MR. BURT:  -- 1998.

		MR. FRUMIN:  Well actually, I think the Dorman, '98, article is the
one that you referenced in the Preliminary Economic Analysis, so I think
you have that already.  And I'll check on Lang and Majumdar, but it's
that second --

		MR. BURT:  Yeah, if you would check.  I have Dorman -- the Dorman,
1998, in front of me and we'll see if --

		MR. FRUMIN:  Okay.

		MR. BURT:  -- put it -- try to put it into the post-hearing record.

		MR. FRUMIN:  Okay.  But I think it's already --

		MR. BURT:  Yeah.

		MR. FRUMIN:  -- in the supporting materials in the docket, is what
I'm saying, but I'll check on the other --

		MR. BURT:  We have a couple of Dorman 1998s, so --

		MR. FRUMIN:  Okay.  Well, we'll make sure that all the Dorman, '98,
articles are --

		MR. BURT:  Yes.

		MR. FRUMIN:  -- in there.

		MR. BURT:  There are at least two.

		MR. FRUMIN:  Okay.

		MR. BURT:  Okay.  Do you know -- I believe Professor Viscusi's
articles are almost entirely -- try to infer wage differentials by
looking at differential wages between occupation.  Do you know if that's
true or if he ever used other methodologies?

		MR. FRUMIN:  I think the articles that he published did -- were
restricted to occupation.  What -- as I understand it, one of the
critiques of his method is that he failed to apply inter-industry
comparisons, and that when others did that, the differentials were
reduced or eliminated.

		So I think that's part of the serious problem that Viscusi's results
entail.

		MR. BURT:  Do you or Professor Dorman know of any article in which he
examined differences in wage rate -- between actual places of
employment, as they differ greatly, is it -- do you know of anyone
who's tried to study that issue?

		MR. FRUMIN:  Well, I don't believe he has.  I don't -- but I couldn't
say whether there are others, but I could try to find out.  So you're
talking about looking at the micro data by firm to compare --

		MR. BURT:  Right.

		MR. FRUMIN:  -- the --

		MR. BURT:  I don't know of such an article, but if either of you do,
that would be helpful.

		MR. FRUMIN:  But I just wanted to restate the question.  You're
talking about firm-specific data, not industry-wide --

		MR. BURT:  Right.

		MR. FRUMIN:  -- data?

		MR. BURT:  Right.

		MR. FRUMIN:  Okay.

		MR. BURT:  The issue would be that if a person is to make good
decisions, they would need to know firm-specific data.

		MR. FRUMIN:  Yeah.

		MR. BURT:  Do people, in your experience, before they're employed,
know the relative safety of different workplaces?  Actually, they need
to know the absolute safety, as well --

		MR. FRUMIN:  Yeah.

		MR. BURT:  -- as relative, but --

		MR. FRUMIN:  Well, I think sadly, people think they do.  We heard from
a witness this morning who said yeah, you know, I know there are some
dangers in -- forget whether she said painting or construction.  But,
you know, you signed on for it.

		So it's a little scary to consider that we're in the process of
setting rules to, among other things, compel a training program about a
highly dispersed, very common hazard based upon a theory which assumes
workers well already know about that hazard.  And yet we know that that
training has been, at best, sporadic and actually not happened for many
of the workers covered by this rule.

		So it's totally putting the cart before the horse to say we're going
to base a theory for establishing this rule on an assumption that
workers already know about the hazards.  So that's one problem with that
assumption.

		I'd say the worker knowledge about hazard varies some, but there's a
lot of ignorance out there, and we still do not have an injury illness
prevention program standard which requires employers to do training in
general.  We have a HazCom standard that requires training about
chemical hazards once in your career unless the chemical hazards change.

		There's so many gaps in OSHA's training requirements that it's more a
gap than not.  The hole is pretty big.  The donut's pretty small.

		MR. BURT:  That's all the questions I have.  Thank you.

		MR. O'CONNOR:  That concludes the questioning from the OSHA panel,
Mr. Frumin.  Thank you for your testimony this afternoon.

		JUDGE SOLOMON:  Let -- again, I'm going to interject myself here.  I
shouldn't really do this, but I will.

		Are you familiar with the Department of Labor Longshore and Harbor
Workers' Act program?

		MR. FRUMIN:  No, I'm not, actually.  I know it's a workers' comp
program, but I'm --

		JUDGE SOLOMON:  Right.

		MR. FRUMIN:  -- not familiar with it.

		JUDGE SOLOMON:  Okay.  So it has extensions in things like the Defense
Base Act.  There are a number of other extensions.  So I just wondered
whether that had -- that you had factored any of that into your
testimony.

		Do you know whether either Viscusi or Dorman relied on any of the
statistics, either taken from that or from state workers' compensation
programs about the value of --

		MR. FRUMIN:  Yeah.

		JUDGE SOLOMON:  -- life value?

		MR. FRUMIN:  So there's a -- there is some reference to the workers'
comp data in some of the studies about labor market behavior.  Dorman
discusses it in his book, his 1996 bookmark, it's Immortality.
Generally, the workers' comp data is found to be pretty unreliable for
research purposes.  So I think --

		JUDGE SOLOMON:  That's because they settle probably.

		MR. FRUMIN:  Well, there are a lot of different types of workers' comp
data.  If you were just looking at the incidents themselves, you know,
one of the reasons they are -- it's not reliable is often, there are
pretty high thresholds for an incident even being reported.  So there's
a lot of problems with workers' comp data.  It's not national.
There's -- there are many problems with it.

		But, in general, the point being that the fatality data is -- has
been used.  Most frequently, the BLS --

		JUDGE SOLOMON:  Right.  That was --

		MR. FRUMIN:  -- census is the only one that's really a census.

		JUDGE SOLOMON:  Right.  That's the --

		MR. FRUMIN:  That's the --

		JUDGE SOLOMON:  The question I --

		MR. FRUMIN:  -- gold standard.

		JUDGE SOLOMON:  It isn't out yet, as you said.  The report isn't out
yet.  I just wondered if they would have factored in any of that
information.

		Okay.  Is there anybody who has questions based on what I asked?  I
hope not?

		MS. KRAMER:  No, Your Honor.

		MR. BURT:  I would just say there actually is one study by Viscusi
that tries to correlate worker compensation levels.

		JUDGE SOLOMON:  Yeah.  I -- you know, we get an economist -- I
shouldn't testify, but we get economists, and they estimate the life
expectancy and the wage expectancy and all of that.  And I assume that
all over the -- in every state, they have a system like that, so I
assume that data is available someplace.

		Okay.  If there is nothing else, the time is now 4:20, and the hearing
is closed.

		MR. FRUMIN:  Thank you, Your Honor.

		(Whereupon, at 4:20 p.m., the hearing was continued, to resume the
next day, Wednesday, March 26, 2014, at 9:30 a.m.)

C E R T I F I C A T E

	This is to certify that the attached proceedings in the matter of:

INFORMAL PUBLIC HEARINGS FOR THE PROPOSED RULE

ON OCCUPATIONAL EXPOSURE TO

RESPIRABLE CRYSTALLINE SILICA

March 25, 2014

Washington, D.C.

were held as herein appears, and that this is the original transcription
thereof for the files of the United States Department of Labor,
Occupational Safety & Health Administration.

				 							    					____________________________

				    	ED SCHWEITZER

				    	Official Reporter

_________________________

		Continued

 PAGE   1819

 PAGE   1678

  PAGE  1678

Free State Reporting, Inc.

1378 Cape St. Claire Road

Annapolis, MD 21409

(410) 974-0947

Free State Reporting, Inc.

1378 Cape Saint Claire Road

Annapolis, MD 21409

(410) 974-0947

			   PAGE  1819


[Federal Register Volume 78, Number 162 (Wednesday, August 21, 2013)]
[Notices]
[Pages 51786-51788]
[FR Doc No: 2013-20335]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70207; File No. SR-OCC-2013-12]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of Proposed Rule Change To Revise Its By-Laws and
Rules To Make Structural Changes to OCC's Membership/Risk Committee
Regarding Public Directors and the Process for Designating Membership/
Risk Committee Members

August 15, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act ''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 2, 2013, The Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by OCC. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    OCC proposes to revise its By-Laws and Rules to make structural
changes to OCC's Membership/Risk Committee (``MRC'') regarding Public
Directors and the process for designating MRC members.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, OCC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. OCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

(1) Purpose
    The purpose of this proposed rule change is to revise OCC's By-Laws
and Rules to make structural changes to OCC's MRC regarding Public
Directors \3\ and the process for designating MRC members. The proposed
rule change would require that at least one Public Director must serve
on the MRC, that the MRC Chairman be a Public Director, and that all
MRC members would be designated on an annual basis.
---------------------------------------------------------------------------

    \3\ In relevant part, Article III, Section 6A of OCC's By-Laws
defines a Public Director as a person who is ``not affiliated with
any national securities exchange or national securities association
or with any broker or dealer in securities[.]''
---------------------------------------------------------------------------

    Currently, Article III, Section 9 of OCC's By-Laws specifies that
at the first meeting of the Board of Directors that follows each annual
meeting the Board must designate the Chairman of the Board, the Vice
Chairman of the Board, and at least three other Member Directors to
serve on the MRC. The By-Laws would be modified to provide that at
least one Public Director must serve on the MRC and that the MRC
Chairman must be a Public Director. These modifications would
correspond to OCC's existing practice of having at least one Public
Director serve on the MRC, and OCC believes that including this
requirement in the By-Laws would help ensure that the MRC will continue

to operate in a manner that is appropriately free from outside
influence and that therefore helps protect the interests of investors
and the public.
    The proposed rule change would also eliminate the requirement from
the By-Laws that MRC members must be designated at the first meeting of
OCC's Board of Directors that follows each annual meeting. Instead, the
only timing requirement in the By-Laws would be for MRC members to be
designated annually. OCC believes this change to the By-Laws would
provide OCC's Board with appropriate flexibility to decide when it is
best for new MRC member designations to be made.
    As amended, Article III, Section 9 of OCC's By-Laws would provide
that the Public Director(s) would be nominated to serve on the MRC by
the Chairman of the Board and that any nomination would be subject to
approval by the Board of Directors. Article III, Section 9 would also
provide that the Chairman of the MRC would be required to be a Public
Director. If more than one Public Director is nominated to serve on the
MRC, the Chairman of the Board would nominate one of the Public
Directors to serve as the MRC Chairman. Any such nomination by the
Chairman of the Board would be subject to Board approval. OCC also
proposes to make technical corrections in Article III, Section 9 to
eliminate specific references to Article V of the By-Laws and Chapter
VI of the Rules in order to avoid any erroneous inference that those
are the only provisions of the By-Laws and Rules that set forth powers
and duties of the MRC, which are in fact contained in many other
provisions of the By-Laws and Rules as well.\4\
---------------------------------------------------------------------------

    \4\ For example, see Article I, Section G (6) of the By-Laws and
Rules 214(b), 305(c), and 309(e).
---------------------------------------------------------------------------

(2) Statutory Basis
    OCC believes that the proposed rule change is consistent with
Section 17A(b)(3)(F) \5\ of the Act \6\ and the rules and regulations
thereunder, including Rule 17Ad-22(d)(8),\7\ because these requirements
with respect to Public Directors in OCC's By-Laws would protect
investors and the public interest by promoting the continued operation
of the MRC in a manner that is appropriately free from outside
influence. By including in the By-Laws the existing practice of having
at least one Public Director serve on the MRC and by further requiring
that the MRC Chairman be a Public Director, the proposed modifications
would help ensure that OCC's governance arrangements are clear and
transparent, fulfill the public interests requirements in Section 17A,
support the objectives of owners and participants, and promote the
effectiveness of OCC's risk management procedures.\8\ OCC further
believes that the proposed change to the By-Laws to require a Public
Director to serve as the MRC Chairman is consistent with explanatory
note 3.2.14 to Principle 2 of the Principles for Financial Market
Infrastructures that recommends that a risk committee be chaired by a
sufficiently knowledgeable independent board member.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1(b)(3)(F).
    \6\ 15 U.S.C. 78a et. seq.
    \7\ 17 CFR 240.17Ad-22(d)(8).
    \8\ Id.
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    OCC does not believe that the proposed rule change would impose a
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.\9\ With respect to any burden
on competition among clearing agencies, OCC is the only clearing agency
that performs central counterparty services for the options markets.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

    Changes to the rules of a clearing agency may have an impact on the
participants in a clearing agency and the markets that the clearing
agency serves. This proposed rule change primarily affects OCC in that
it would require at least one Public Director to serve on the MRC, the
MRC Chairman to be a Public Director, and all MRC members to be
designated on an annual basis. OCC does not believe that these changes
with respect to governance would treat any clearing member or group of
clearing members disparately or otherwise disparately affect access to
or use of any of OCC's facilities or disadvantage or favor any user in
relationship to any other such user. In fact, OCC believes that the
proposed requirement that at least one member be a Public Director and
that the MRC Chairman be a Public Director would promote competition by
lessening the influence that any particular clearing member may have on
the MRC.
    For the foregoing reasons, OCC believes that the proposed rule
change is in the public interest, that it would be consistent with the
requirements of the Act applicable to clearing agencies, and would not
impose any burden on competition that is unnecessary or inappropriate
in furtherance of the purposes of the Act because the changes would
help ensure that the MRC continues to operate in a manner that is
appropriately free from outside influence and therefore help promote
the purposes of the Act and Rule 17Ad-22(d)(8) \10\ thereunder as
described above.
---------------------------------------------------------------------------

    \10\ 17 CFR 240.17Ad-22(d)(8).
---------------------------------------------------------------------------

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others

    Written comments on the proposed rule change were not and are not
intended to be solicited with respect to the proposed rule change and
none have been received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-OCC-2013-12 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549.

All submissions should refer to File Number SR-OCC-2013-12. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the

submission, all subsequent amendments, all written statements with
respect to the proposed rule change that are filed with the Commission,
and all written communications relating to the proposed rule change
between the Commission and any person, other than those that may be
withheld from the public in accordance with the provisions of 5 U.S.C.
552, will be available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F Street NE., Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of OCC and on OCC's Web site:
http://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_13_12.pdf.
    All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-OCC-2013-12
and should be submitted on or before September 11, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-20335 Filed 8-20-13; 8:45 am]
BILLING CODE 8011-01-P