Summer Heat Is Becoming a Big Drag on Productivity
US gross domestic product is being reduced by some $100 billion a year already, and that may triple in just a few years.
It’s too hot to work.
Photographer: Mario Tama/Getty Images
Natural disasters such as the deadly fires in Maui are tragic in terms of lives lost. But that doesn’t mean we shouldn’t discount the economic damage, which is often substantial. In a typical year, the highest human and economic cost from natural disasters is tied to high temperatures even though heat often gets overlooked, which is why it’s called the Silent Killer.
Declines in labor productivity are the primary channel through which higher temperatures affect the economy. Researchers with the Atlantic Council, a moderate think tank, estimated in 2021 that they cost the US economy $100 billion annually by reducing labor productivity, or around 0.3% of gross domestic product. If businesses and the economy don’t adapt, the reduction in productivity could reach 0.5% of GDP by 2030 and 1% by 2050. That’s just one of several estimates, but the negative effects of rising temperature on productivity is a common conclusion.