Obesity Is Hurting the U.S. Economy in Surprising Ways

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Obesity
Some 35.7 percent of Americans 20 to 74 years old were obese in the period from 2009 to 2012, according to the latest figures from the Centers for Disease Control and Prevention in Atlanta. Photographer: David Paul Morris/Bloomberg

Obesity is weighing on the U.S. economy.

As a panel of scientists considers ways to help Americans trim down, unpublished research shows medical expenses linked to being extremely overweight have skyrocketed. Experts say the damage is augmented by reduced productivity, wider gender and income inequality and even higher transportation costs.

While the biggest consequence is still on an individual’s well-being, “there are some significant economic costs associated with obesity,” said Ross Hammond, a senior fellow in economic studies at the Brookings Institution in Washington. “Unfortunately, it’s not an outcome that’s rare anymore.”

Some 35.7 percent of Americans 20 to 74 years old were obese in the period from 2009 to 2012, according to the latest figures from the Centers for Disease Control and Prevention in Atlanta. That’s up from 31.1 percent a decade earlier and 13.3 percent in 1960-1962. The CDC considers adults obese when their body mass index, which takes into account weight and height, is 30 or higher.

As a result, there is growing urgency to come up with plans to check the trend. The Dietary Guidelines Advisory Committee, the panel of scientists that counsels government agencies, last month recommended that sugary drinks and foods be taxed to reduce their consumption. The report, released Feb. 19, went on to advise that the revenue generated could be used to promote healthier behavior or subsidize the cost of fruits and vegetables.

“This really is a situation that’s beyond business as usual,” said Walter Willett, a professor and chairman of the department of nutrition at Harvard University’s T.H. Chan School of Public Health in Boston, Massachusetts. “We have to think about serious interventions that go beyond the norm.”

Costs Surge

Unaddressed, the costs could continue to mount, with health-care expenses being the most direct economic consequence.

Widespread obesity raised medical-care costs by $315.8 billion in 2010, according to John Cawley, an economics professor at Cornell University in Ithaca, New York. That amounted to about $3,508 a year for each obese person, the latest available data showed. The expenses, which include doctors’ appointments, hospital stays, prescription drugs and home health care, were up 48 percent from 2005’s $213 billion after adjusting for inflation, the researchers found.

The findings, to be published later this year in the journal PharmacoEconomics, represent the combined work of fellow researchers Chad Meyerhoefer, Adam Biener, Mette Hammer and Neil Wintfeld.

Expensive Treatment

Chronic illnesses linked to obesity, such as diabetes and heart disease, as well as stroke and cancer, are expensive to treat, Cawley said. Moreover, the costs are usually paid by private and public health insurance, meaning that leaner people are subsidizing those with less healthy diets, he said. “All of us are paying these costs.”

While such spending doesn’t directly reduce economic growth, it does represent a shift in priorities toward health care and away from things such as business investment in other industries that could boost output down the road.

Obesity also poses problems in less direct ways. Excessive fat is correlated with an increase in absenteeism from work because of health issues, said Tatiana Andreyeva, director of economic initiatives at the Rudd Center for Food Policy and Obesity at the University of Connecticut in Hartford.

That costs the nation about $8.65 billion a year, Andreyeva found with fellow researchers Joerg Luedicke and Y. Claire Wang. Obese employees miss an extra 1.1 to 1.7 days of work a year compared to their normal-weight counterparts.

Less Productive

“The employee is most likely getting paid for it, but there was no work done on it, and there was a cost to the employer,” Andreyeva said. Diminished productivity is a major source of drag on the economy as it leads to higher production costs and a less competitive workforce, she said.

That could worsen a recent slowing in efficiency as the 18-month economic slump that ended in June 2009 prompted companies to curb spending on more sophisticated machinery and time-saving devices such as faster computers that help boost productivity. Output per hour has climbed by an average 1.3 percent a quarter since the recession ended, compared with 3 percent in the decade through 2005.

On an individual level, obesity also can limit how much workers earn and what types of occupations they take on, research shows. Morbidly obese women, or those with a body mass index greater than 40, in occupations that involve interacting with other people will earn about 5 percent less than their normal-weight counterparts, according to a study by Jennifer Shinall, an assistant professor at the Vanderbilt University Law School in Nashville, Tennessee.

Lower Earnings

That more than offsets a wage premium that generally exists in such fields, Shinall found.

Furthermore, obesity’s effects may fall disproportionately on those who can least afford it, Shinall said. Minority and less-educated workers are more likely to be overweight, compounding the wage difference that already exists for those groups in the workforce, she said.

Black workers -- almost 1.5 times as likely to be obese as white employees -- in full-time jobs reported median earnings of $263 a week in the fourth quarter, according to data from the Labor Department. That compares with $349 for whites.

The costs of obesity also manifest themselves in less obvious ways. Heavier people use more gasoline and jet fuel to move from place to place and require the support of stronger infrastructure.

More Gasoline

As many as one billion additional gallons of gasoline are consumed each year transporting overweight and obese Americans, according to research from Sheldon Jacobson and Douglas King at the University of Illinois at Urbana-Champaign. That would amount to about $2.5 billion, according to the average cost of regular gasoline as of March 3.

The U.S. Department of Health and Human Services and the U.S. Department of Agriculture will host a public meeting this month on the Dietary Guidelines Advisory Committee’s recommendations, and will accept comments though April 8. The resulting policy document -- the eighth edition of Dietary Guidelines for Americans -- is expected to be published by the agencies toward the end of 2015.

The taxation lever isn’t a cure-all for the obesity problem, Cornell’s Cawley said, since consumers may just substitute one unhealthy product for another. And some early efforts to curb consumption, such as the 16-ounce limit on soft drinks sold in restaurants and movie theaters backed by former New York City Mayor Michael Bloomberg, owner of Bloomberg News parent Bloomberg LP, have failed at ballot boxes or in courtrooms.

Political Feasibility

“It’s a misreading of the evidence to think that a modest tax on a narrow category of food or drinks would have a substantial impact on calories or weight,” Cawley said. “It would probably have to be a broader and bigger tax to really change people’s behavior, and I don’t know whether that’s politically feasible.”

Nonetheless, in combination with other policies such as increasing physical activity and improving access to quality food, a multifaceted approach that includes a financial lever could make a difference, Harvard’s Willett said.

An obesity rate of less than 5 percent would be ideal, while one around 10 percent would be more realistic, he said. A genetic predisposition to being overweight afflicts only about 1 percent to 2 percent of the population, he said.

“It looks like we are starting to make a little dent in the problem, but we have a huge way to go,” Willett said. Obesity is “massively affecting our children and our future, shortening our lives, and the consequences are not trivial.”