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  • Writer's pictureThe San Juan Daily Star

Heat is costing the US economy billions in lost productivity

Evan Avant assembles the iron framework for a billboard in Oklahoma City, Okla., July 27, 2023. From meatpackers to home health aides, workers are struggling in sweltering temperatures, and it’s costing the U.S. economy billions in lost productivity.

By Coral Davenport

As much of the United States swelters under record heat, Amazon drivers and warehouse workers have gone on strike in part to protest working conditions that can exceed 100 degrees Fahrenheit.

On triple-digit days in Orlando, Florida, utility crews are postponing checks for gas leaks, since digging outdoors dressed in heavy safety gear could endanger their lives. Even in Michigan, on the nation’s northern border, construction crews are working shortened days because of heat.

Now that climate change has raised Earth’s temperatures to the highest levels in recorded history, with projections showing that they will only climb higher, new research shows the impact of heat on workers is spreading across the economy and lowering productivity.

Extreme heat is regularly affecting workers beyond expected industries such as agriculture and construction. Sizzling temperatures are causing problems for those who work in factories, warehouses and restaurants and also for employees of airlines and telecommunications firms, delivery services and energy companies. Even home health aides are running into trouble.

“We’ve known for a very long time that human beings are very sensitive to temperature, and that their performance declines dramatically when exposed to heat, but what we haven’t known until very recently is whether and how those lab responses meaningfully extrapolate to the real-world economy,” said R. Jisung Park, an environmental and labor economist at the University of Pennsylvania. “And what we are learning is that hotter temperatures appear to muck up the gears of the economy in many more ways than we would have expected.”

A study published in June on the effects of temperature on productivity concludes that although extreme heat harms agriculture, its impact is greater on industrial and other sectors of the economy, in part because they are more labor-intensive. It finds that heat increases absenteeism and reduces work hours, and concludes that as the planet continues to warm, those losses will increase.

The cost is high. In 2021, more than 2.5 billion hours of labor in the U.S. agriculture, construction, manufacturing and service sectors were lost to heat exposure, according to data compiled by The Lancet. Another report found that in 2020, the loss of labor as a result of heat exposure cost the economy about $100 billion, a figure projected to grow to $500 billion annually by 2050.

Other research found that as the mercury reaches 90 degrees, productivity slumps by about 25%, and when it goes past 100 degrees, productivity drops off by 70%.

Of the many economic costs of climate change — dying crops, spiking insurance rates, flooded properties — the loss of productivity caused by heat is emerging as one of the biggest, experts say.

“We know that the impacts of climate change are costing the economy,” said Kathy Baughman McLeod, director of the Adrienne Arsht-Rockefeller Foundation Resilience Center and a former global executive for environmental and social risk at Bank of America. “The losses associated with people being hot at work, and the slowdowns and mistakes people make as a result are a huge part.”

Still, there are no national regulations to protect workers from extreme heat. In 2021, the Biden administration announced that the Occupational Safety and Health Administration would propose the first rule designed to protect workers from heat exposure. But two years later, the agency still has not released a draft of the proposed regulation.

Seven states have some form of labor protections dealing with heat, but there has been a push to roll them back in some places. In June, Texas Gov. Greg Abbott signed a law that eliminated rules set by municipalities that mandated water breaks for construction workers, even though Texas leads all states in terms of lost productivity linked to heat, according to an analysis of federal data conducted by Vivid Economics.

Business groups are opposed to a national standard, saying it would be too expensive because it would probably require rest, water and shade breaks and possibly the installation of air conditioning.

“OSHA should take care not to impose further regulatory burdens that make it more difficult for small businesses to grow their businesses and create jobs,” David Addington, vice president of the National Federation of Independent Business, wrote in response to OSHA’s plan to write a regulation.

Marc Freedman, vice president of employment policy at the U.S. Chamber of Commerce, said, “I don’t think anyone is dismissing the hazard of overexposure to heat.” But, he said, “is an OSHA standard the right way to do it? A lot of employers are already taking measures, and the question will be: What more do they have to do?”

In Tulsa, Oklahoma, Navistar is installing a $19 million air conditioning system at its IC Bus factory, which produces many of America’s school buses. Temperatures on the floor can reach 99 degrees. Currently, the plant is only cooled by overhead fans that swirl high above the assembly line.

Shane Anderson, the company’s interim manager, said air conditioning is expected to cost about $183 per hour, or between $275,000 and $500,000 per year — but the company believes it will boost worker productivity.

Other employers are also adapting.

Brad Maurer, vice president of Leidal and Hart, which builds stadiums, hospitals and factories in Michigan, Ohio, Indiana, Kentucky and Tennessee, said managers now bring in pallets of bottled water, which they didn’t used to do, at a cost to the company of a few thousand dollars per month.

Rising heat around Detroit recently caused his employees to stop working three hours early on a Ford Motors facility for several days in a row — a pattern emerging throughout his company’s work sites.

“It means costs go up, production goes down, we may not meet schedules, and guys and women don’t get paychecks,” Maurer said.

Labor experts say that as employers adapt to the new reality of the changing climate, they will have to pay one way or the other.

“The truth is that the changes required probably will be very costly, and they will get passed on to employers and consumers,” said David Michaels, who served as assistant secretary of labor at OSHA during the Obama administration and is now a professor at the George Washington School of Public Health. “But if we don’t want these workers to get killed, we will have to pay that cost.”

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