“Lead” Heads

Domestic Policy, Economics & Law — By on January 19, 2009 at 12:54 am

The government is brilliant–they must be, as they say they’re able to create jobs while simultaneously passing laws that destroy them. What genius!
The Consumer Product Safety Improvement Act, passed last year and going into effect on February 10th, will require all manufacturers of anything–be it clothes, bikes, dolls, books, sports equipment, furniture, you name it–that might be sold to children 12-or-under to place their product through expensive lead testing. After all, what kid’s day is complete without a good chewing on Goosebumps or Christmas socks?
In the clothing business, areas largely dependent on fashion retail are going to be hit hard. For example, LA company Charlie Rocket is expecting a $10,000-$20,000 cost for testing, and what’s more, retailers can use the new law as an excuse to return non-selling items to manufacturers, to the latter’s fiscal loss.
Of course, only government certified labs can run the tests, and as there aren’t many, each test will cost a company around $800 and prevent punctual product shipments. Not to mention the over $620 million of taxpayer money that the Consumer Product Safety Commission has been given to enforce the $100,000 fine plus federal prison time punishment for not executing the regulations.
The government cares about your children–it would break their heart to see Billy get lead poisoning from sucking on his bicycle tires.
They care about you too–when you lose your manufacturing job in company downsizing, don’t worry! I’m sure you’ll get a nice job working at the government bank.



  • ex-preacher writes:

    It could be that this law needs to be amended to protect handmade crafts.

    What I find interesting, though, is this statement from one of your links that essentially refutes Robin’s entire point that this law would damage the manufacturing industry:

    "All of these changes will be fairly easy for large, multinational toy manufacturers to comply with. Large manufacturers who make thousands of units of each toy have very little incremental cost to pay for testing and update their molds to include batch labels."

    This comment was originally posted on the evangelical outpost

  • http://TheEverwiseBoonton.blogspot.com Boonton

    In the clothing business, areas largely dependent on fashion retail are going to be hit hard. For example, LA company Charlie Rocket is expecting a $10,000-$20,000 cost for testing, and what’s more, retailers can use the new law as an excuse to return non-selling items to manufacturers, to the latter’s fiscal loss.
    Of course, only government certified labs can run the tests, and as there aren’t many, each test will cost a company around $800 and prevent punctual product shipments. Not to mention the over $620 million of taxpayer money that the Consumer Product Safety Commission has been given to enforce the $100,000 fine plus federal prison time punishment for not executing the regulations.
    without doing much more research on this law, I think it’s pretty clear that each product does not have to be tested. If that was the case then not even the all powerful Playstation 3 could be economically viable if each unit had to pass an $800 test.
    So I imagine the testing has to be done on each lot or shipment. That, of course, puts an $800 test in better perspective. Depending on how big a shipment is, it could end up being a pretty small portion of the price. How unreasonable is it? In the last year or so China’s slipshot quality control has killed a lot of beloved pets in the US, allowed lead coated toys to be sold by well respected toymakers and in China itself we’ve had, what, a few hundred babies sick or dead because some company decided to water down powdered formula with bits of plastic?
    It seems like there’s a pretty good argument for requiring that lots of toys and clothes be tested even if this does impose a cost on us. It is probably still a fraction of the amount of money saved by having a global market that can import low cost products from overseas. And it’s probably a lot cheaper than closing the borders and requiring that toys and clothes be made only in America where our product liability laws are probably strong enough to deter using lead paint on children’s toys.
    The one issue I’ve heard that I think is legit is that the gov’t has not issued clear rules on how thrift stores that sell used stuff are supposed to comply with the law when products come in without original packaging. NPR had a report/interview where they said that they were not requiring such stores do lab testing on their inventory but they are asking them to check against a 15 page long list of known toy recalls. I’m sympathetic and I think they should try to write reasonable regulations but that is one sector that will probably see a lot of bad toys as people dump their used items & less reptuable retailers try to sell off their bad toys in the secondary markets for a few bucks.

  • http://TheEverwiseBoonton.blogspot.com Boonton

    Also I’m not clear what you mean by this:
    and what’s more, retailers can use the new law as an excuse to return non-selling items to manufacturers, to the latter’s fiscal loss.
    Are you saying if ToysRUs or WalMart tests a lot of toys and they come up positive for lead they shouldn’t be able to return them to the manufacturer for full credit? Why not? I’d be kind of surprised to learn that this isn’t already the case.
    Are you saying that if ToysRUS or WalMart has something that isn’t selling and they don’t want to test a lot they can use the law to return the items? If that’s the case I’d agree with you that such things should be between the retailer and manufacturer.

  • JillD

    Logic and efficiency from the federal government? What? Are you crazy?
    My solution is to avoid, as much as I possibly can in this China-choked world, buying anything made in that country. I even found a pair of athletic shoes made in the USA. Amazing! For one, I buy a lot less worthless junk and, when I do find a product made here at home, I feel good about buying it. Despite what Boonton said, I would say, let China test everything and anything they plan to try to sell in our country or we don’t let it in. Let their products bear the cost of those tests and that will also go far in making American products more competitively priced. I assume here that lead in paint is almost exclusively a problem with products made in communist China.

  • http://TheEverwiseBoonton.blogspot.com Boonton

    I even found a pair of athletic shoes made in the USA.
    Ahhh but what does this mean? Were the raw materials made in the USA too? Or did everything come from China and ‘Made in the USA’, in this case, means that a machine in a warehouse near the port threaded the shoelaces in to the sneakers on American soil?
    As for closing the borders to China, it’s not really practical. It’s not just finished products but also raw materials and works in progress that flow around the world. That’s why when the toy scare happened a lot of relatively trustworthy ‘American’ companies had tainted products….not just the cheap stuff made by no-name manufacturers you see in dollar store bins. Ditto for the dog food problem. Unless you’re willing to pay a lot more it’s not as practical as you make it out to try to address this problem on the consumer end.

  • ZZ

    I work in a large manufacturing company. We found out (through a whistle-blower) that one of our suppliers had started using a non-certified material that was flammable and inappropriate for our product. We did a massive recall and tested tens of thousands of units.
    Turns out the president of this little company was just under a lot of cost pressure and decided to substitute the cheaper material, hoping nobody would find out. Suing him for our expenses would have just bankrupted the small company and we wouldn’t have gotten anything. Moreover, we had to keep using the company because they were the only ones who had the tools to make this thing!
    Anyway, there was this huge internal discussion about how this could have happened, and why we weren’t testing these things ourselves, and how many units you have to test to be POSITIVE that they are all good. The answer is, of course, 100%. In fact, you have to test all of them SEVERAL TIMES because false negative results are possible. Just taking samples and testing those always leaves room for bad stuff to go through. For instance, if you have a lot of 1000 units, and 10 of them are bad, you have to test a hundred units just to have a 50/50 chance of catching one of the bad ones.
    So you do a risk assesment.
    1. Just how dangerous is this problem?
    2. How likely is it to occur?
    If the answers are “very” and “very”, you test every unit. That’s expensive.
    If the answers are “not so much” and “kind of improbable”, you can still test everything to protect your customer. But you can bet there’s s a competitor out there who will risk blowing this off and thus undercut you on price. Goodbye, jobs.
    So you do you best to pick a reputable supplier, put in some audit testing just to make sure the thing doesn’t get massively out of control, and hope the the incidents are few and far between enough that they don’t make the papers and land you in court.

  • G Man

    I have had extensive experience working in a heavily-government-regulated manufacturing business. Not only do you need to run numerous tests to show compliance – but even with good results, regulators do not believe “evil industry” and question the laboratory you used. Sometimes they can be punitive and ask for more tests from another lab.
    Lab certification just means that the lab has adequately shown that they have the equipment and protocol to test for the specific compounds in a specific manner. Labs are only as good as their integrity – results CAN be fudged. I would not be surprised if shoddy lab testing was a way for China to get (and continue to get) some tainted goods into the U.S.
    Larger manufacturers get a very large testing discount from the certified lab as compared to the small shops. This puts the big boys at an unfair competitive advantage.
    Oh, and I believe that if merchandise is comprised of foreign parts or materials and only put together on US soil, they are to be labeled “assembled in the USA”. – and who is going to make sure this is the case… more regulators!
    If we truly want to remove all risk from our products, let’s use all the TARP money to create 3,000,000 new jobs – all of which would be government regulators to “ensure” our safety. After all, if the government is in charge, you know it’s done right!

  • http://TheEverwiseBoonton.blogspot.com Boonton

    Just taking samples and testing those always leaves room for bad stuff to go through. For instance, if you have a lot of 1000 units, and 10 of them are bad, you have to test a hundred units just to have a 50/50 chance of catching one of the bad ones.
    It’s hard to know how bad bad would be without a cost benefit analysis. What, I think, would be really really really bad is if a shipping container had a 15 kiloton nuclear bomb set to go off 3 weeks after it was scheduled to arrive in a US port and be delievered to an empty warehouse. Yet we don’t test 100% of all containers or even 10%.
    In the case you describe it almost sounds like it makes sense for your company to either buy the supplier outright so you have complete control over their operations or have inspectors on their site monitoring the product they are sending you. That’s from your description where this company is the only supplier of the part, the part is critical to your product, and cheaping out on the material will cause a catastrophic consquence. There might be some more creative options like forcing the supplier to purchase an insurance policy that pays out a large amount should any problems develop from using bad materials.
    But for lead paint and similiar concerns, I don’t think 100% compliance is absolutely necessary. If we were at a point where we could say with 95% confidence that 95% or more of the items on the market were free of dangerous levels of lead that would be pretty good. That doesn’t mean 5% of the items are dangerous but it does mean you can determine it with random sampling and some high profile selective enforcement.
    I agree that gov’t mandates can be onerous, annoying and downright unfair but I’m not really hearing any viable alternative here. I don’t think massive protectionism against China and other developing nations is politically viable and it would cost much more than this bill. People should not have to put up with massive recalls that span dozens of products at a time. It’s one thing for one product or even one whole brand to go on recall but the dog food scare, where it felt like every other product was subjected to the problem, is simply unacceptable. Let something like that happen with baby food and you’re going to get a public that is going to go ballistic. I don’t doubt for a moment that there’s a dozen plus ways to make this bill better and less onerous but the gist of this post is more along the lines that the bill should be scrapped outright. I don’t see the case being made for that assertion here.

  • ex-preacher

    I’m curious, Robin – how many dollars is it worth per child to prevent the brain damage than can result from lead poisoning?

  • http://dariusteichroew.blogspot.com Darius T.

    More knee-jerk stupidity from the all-knowing government…

  • ZZ

    “how many dollars is it worth per child to prevent the brain damage than can result from lead poisoning”
    Dude, have not read ANY of the comments? It costs $800 per toy. Would YOU buy your kid an $800 toy? No. You’d see a similar one right next to it that costs $5 because THAT company didn’t test for lead, and you buy that. The only way to be absolutely safe is buy locally made handcrafted toys. Maybe you do that, I don’t know.
    Boonton, you give some suggestions that are useful on the surface, but each has problems.
    1. Buy the supplier outright so you have complete control over their operations. The thing is, we have hundreds of suppliers that are exclusive sources of our parts, many of which have some safety implication, and there’s no way we could afford to buy them all.
    2. Forcing the supplier to purchase an insurance policy. They would just pass the cost of the premiums on to us. Might as well self-insure.
    3. Have inspectors on their site monitoring the product they are sending us. We couldn’t have inspectors in all of them for the same reason we can’t test all the parts. It’s expensive, and some competitor would just not do it, undercutting our price and getting our market share. However, we ARE soing something like this now on more of a periodic basis . That is more to make them afraid of cheating, rather than actually hoping to find anything. This was a result of the incident I described

  • ex-preacher

    Come on, ZZ, do you really think it is going to tack on $800 to the cost of every toy? Come out of the right-wing fog, dude. If the price of a $5 toy jumps to $800, I’ll buy you all your toys from now on, ok? Did the price of lead-free paint jump to $800 a gallon? Did lead-free gasoline jump to $800 a gallon? Does it cost food manufacturers $800 per item to comply with food safety laws? The $800 number is bogus. I would guess it’s closer to 8 cents or maybe .8 cents.

  • ZZ

    Yes, if they tested each and every can of paint for lead, it would cost $800. Lots and lots of UL and regulatory tests cost hundreds or thousands of dollars.
    But they don’t test every can. They sample and do auditing. But the point is, that is NOT 100% protection. Anybody who thinks this legislation will give 100% protection is daft.
    My guess is that they’ve imposed some kind of regulation that is far more restrictive than the ones for paint. But from the information given, it’s hard to tell.

  • G Man writes:

    I’m curious, ex-preacher – how many dollars is it worth per child to prevent the brain damage than can result from lead poisoning?

    Are you really willing to have all those hand-made, one-of-a-kind, made-in-the-garage items go untested? Aren’t they the likely items to have the lead?

    - and do you condone legislation that puts the small businessperson out of business because only the large manufacturer, who makes thousands of units, will have "very little incremental cost to pay for testing and update their molds to include batch labels."

    This legislation really was not very well thought out. But I just know the feds will do a better job with nationalized healthcare!

    This comment was originally posted on the evangelical outpost

  • Chuck writes:

    While the law seems to be good in theory it really just distracts from the major cause of lead poisoning – lead paint. This is by far and away the largest source. I work for a health department and we deal with lead. My coworkers and I can only think of one situation where a child got lead poisoning from a toy (and it wasn’t insidious it was a key chain charm). The sad truth is there is a limited amount of money to be spent on the problem, and it needs to be put where the problem actually is.

    This comment was originally posted on the evangelical outpost

  • Penny

    My biggest concern is whether the toys are made by gays, to further their gay agenda. There are a lot less gays in China than in the United States (in fact, all the openly gay Chinese people that you hear about are American). So you can feel safer in many respects with a Chinese toy compared to an American toy. The one big exception was probably that gay Ken doll from a few years back.

  • Penny

    My biggest concern is whether the toys are made by gays, to further their gay agenda. There are a lot less gays in China than in the United States (in fact, all the openly gay Chinese people that you hear about are American). So you can feel safer in many respects with a Chinese toy compared to an American toy. The one big exception was probably that gay Ken doll from a few years back.

  • G Man

    I’m curious, Robin – how many dollars is it worth per child to prevent the brain damage than can result from lead poisoning?
    Using a cost benefit analysis, one may show that there is a 1:10,000,000 chance of a child chewing on the rim of a bicycle tire. Now, if you put a cost on what it is worth to keep that child from getting lead poisoning at an extremely high dollar amount- it still comes out that it’s not worth testing.
    – unless of course you are a government official having to show that you care, and having to put a bill on the floor to show your constituents that you are doing a great job and worth the $100+K salary and $160/day per diem.
    Again, if you want to totally remove risk in your lives, and totally remove the risk of brain damage from lead poisoning, your choices are to become a bubble boy or give all your money to the government on the hope that they will keep you safe.
    Gosh, where would we all be if it weren’t for antibacterial soap, bicycle helmets, bluetooth headsets, and school-mandated sex education. I guess we’d all be dead.

  • http://theeverwiseboonton.blogspot.com/ Boonton

    Several things:

    1. The law does not require every toy be tested. It requires the manufacturer to issue a certificate stating that the toy is free from lead (and certain other chemicals) and provide name and address information. The certificate goes to the retailer so if a contanimated toy does show up it can be traced back to the person who made it. The certificate has to be backed up by a reasonable testing program but that doesn’t mean every item is tested. Such a rule would be impossible since testing would probably damage or destroy the toy to begin with.

    2. The implementing regulations are still being written so I suspect a lot of the potential problems here can be addressed by writing reasonable regulations. Among them would be:

    If you’re using domestic raw materials, such as paint, you can bypass lab testing if your raw materials themselves are certified by the manufacturer. Or if you’re assembling kits produced by a larger company your certificate will simply be one issued by them assuming you’re not adding anything to the product.

    If you’re using totally organic materials that one would not normally expect to have lead such as wood, plants, stones etc. you’re exempt from testing unless you’re very large scale.

    They also might define manufacturer in such a way as to exclude ‘artisans’ who are creating one of a kind items.

    Many times the law itself is vague and almost impossible to read. The real action happens in how the law is intrepreted and implemented which is why this law may not have to be amended or changed if the CPSC writes sensible regulations to implement it.

    This comment was originally posted on the evangelical outpost

  • ZZ writes:

    I think the problem is that in the Mattel case, ALL of the toys, or at least a large percentage of them, had some lead in them. Say you produce toys in lots of 10,000 pieces, and you test one and find that it has no lead? Does that mean all the rest have no lead? It depends. If you have a reason to think the supplier used the same material in all of them (like you know he can only buy material in large lots, like with paint), then maybe. But if you think there’s a chance that he just randomly uses lead in a few and not in others, then no way. But that’s a value judgement, not a statistical judgement.

    This comment was originally posted on the evangelical outpost

  • http://TheEverwiseBoonton.blogspot.com Boonton

    Dude, have not read ANY of the comments? It costs $800 per toy. Would YOU buy your kid an $800 toy?
    It’s $800 per test. Nowhere does it say each toy must be tested.
    But they don’t test every can. They sample and do auditing. But the point is, that is NOT 100% protection. Anybody who thinks this legislation will give 100% protection is daft.
    Well actually with paint you can test a huge vat of paint. Then split it into individual cans.

  • Chuck

    CPSC hasn’t yet decided how to enforce or really even what to enforce on this law. They haven’t decided if batches can be tested or even what testing procedures to use. Give the law some time to work itself out. Personally, I feel the law detracts from the real primary cause of lead poisoning – lead paint.

  • http://TheEverwiseBoonton.blogspot.com Boonton

    Per wikipedia
    The legislation requires that every manufacturer of a product subject to a consumer product safety rule will provide a “General Conformity Certificate” to certify, based on unit testing or a reasonable testing program, that the product complies with all safety rules.[3] This requirement was imposed on every product manufactured on or after 12 November 2008.
    “reasonable testing program” is short hand for sample testing based on good statistical procedures. This will vary based on the type of product you’re dealing with. If you read the criticisms section you’ll note that while there are some good criticisms of the law nowhere is one of them that ‘every toy on the shelf must have an $800 lead test’. If that was the case one would think that all other criticisms would be a long and distant second to that.

  • ZZ

    “Well actually with paint you can test a huge vat of paint. Then split it into individual cans.”
    Ahh, good point. Too bad you can’t do that for toys.
    “sample testing based on good statistical procedures”
    The thing is, if you do the statistics correctly, any high level of confidence requires a alarge amount of samples. Unless the thing you’re looking for is not random.

  • http://TheEverwiseBoonton.blogspot.com Boonton

    Not really, for a huge population a sample of even a hundred is pretty good…provided it is random. If you’re dealing with a much smaller population you can get pretty high confidence with a smaller but truely random sample.
    For something like paint (which I think is a common target for this law since it’s goes on a surface), it’s pretty hard to see how if a vat of paint had lead in it how every toy from that vat wouldn’t likewise have lead. Even if you can’t test the vat testing a sample of toys should be ok.
    What you’re describing sounds like a case where it’s one toy made by lots of people or in lots of production runs. But the certification sounds like it is required by each manufacturer. Say Mattel, for example, sells green plastic soldiers that it gets in bulk from Chinese companies A, B, C and D that it mixes up and puts into bags for sale. Companies A-D have to certify their product is lead free. Then Matel passes that certification onto Wal-Mart, ToysRUS, Amazon.com etc. I don’t think Mattel has to duplicate the tests (especially since in this case it isn’t actually manufacturing anything).
    I’m just reading up on this law now so there’s probably a lot of elements I’m missing but I would agree that the certification should be set up so that it is the finished product you are certifying. That means if you test the elements of the product (like the vat of paint before it is used), you shouldn’t have to test the finished product. But whatever the testing methods are they have to be reasonably certain to keep lead out…with a normal confidence interval of course.

  • http://www.rocksinmydryer.net/ Shannon @ Rocks In My Dryer

    Thanks for the link, Joe, and for helping to bring attention to this case of gross over-reaching by the government. It breaks my heart to think of how many industrious, creative people will be put out of business by this law.

    This comment was originally posted on the evangelical outpost

  • http://www.getpaid4surveys.co.uk/ work from home

    I think the problem is that in the Mattel case

    This comment was originally posted on the evangelical outpost