Why worker protections from heat illness could be an economic win for business : The Indicator from Planet Money Extreme heat takes a toll on workers. From heatstroke to an increased likelihood of workplace accidents, protecting employees from heat illness is a growing priority for state legislatures. We talk to an economist about how higher safety standards help businesses too.

An economic argument for heat safety regulation

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

ADRIAN MA, HOST:

It might be easy to forget with winter just around the corner, but the whole planet is getting warmer. This past decade was the hottest on record, and in North America, this past summer was the second hottest. And a lot of workers are feeling it.

DARIAN WOODS, HOST:

And you can see this in the news. It's not just people who work outdoors but people who work indoors, too, like, from restaurant workers...

UNIDENTIFIED PERSON #1: People are getting hives. People are getting nosebleeds.

WOODS: ...To school teachers...

UNIDENTIFIED PERSON #2: It's 11:20 right now, and it's currently 80 degrees inside my classroom.

WOODS: ...To delivery drivers.

UNIDENTIFIED PERSON #3: My vision was blurred. I was seeing stars. I was throwing up. I just honestly could not drive that vehicle safely anymore.

MA: Heat illness on the job is a growing problem. And right now around the country, there is a debate going on about what to do about it. On one side, worker advocates are pushing federal and state governments to pass new regulations, rules that would mandate employers to take more steps to keep employees safe.

WOODS: But most of these proposals haven't gone anywhere because of opposition from industry groups who say that these kinds of regulations aren't necessary, they'd be too costly, and they would hurt businesses.

MA: But what if they're wrong about that? This is THE INDICATOR FROM PLANET MONEY. I'm Adrian Ma.

WOODS: And I'm Darian Woods. This week we are focusing on what the markets and what government and businesses can do in the face of a warming climate. Today on the show, we will talk with an economist who argues that heat safety regulations could be a win-win-win for both workers, businesses and the economy.

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MA: When it comes to workplace heat safety regulations, we're going to focus on a state that has been at the forefront of this kind of thing - California.

WOODS: It's always California, isn't it?

MA: Such a try-hard (ph). I'm just kidding. We love you, California. In the mid-2000s, though, California was one of the first states to pass rules aimed at protecting outdoor workers on hot days. And now they're looking to do the same thing for indoor workers.

WOODS: So people who work in restaurants, factories, warehouses, greenhouses - these kinds of workers make up nearly 20% of workers' compensation claims due to heat injuries. And so the new proposed regulation requires employers to do certain things, like to train employees on how to respond to extreme heat, to track the temperature, to provide more breaks and more water on hot days.

MA: But before any of that can actually go into effect, state regulators wanted to understand the potential economic impact, the costs and benefits, particularly for businesses. So to do that, the state commissioned a study from this economic think tank called the RAND Corporation, and that is where David Metz got involved.

DAVID METZ: I'm a senior quantitative analyst at the RAND Corporation.

MA: David's what's called an applied economist, using the tools of econ to help policymakers make decisions about stuff.

METZ: We're the guys in the background doing the lighting, the DJing, analyzing the flow of information and trying to describe what's happening.

MA: Are you picturing, like, a party of economists, and, like, the econometricians are over here, and the theoretical people are over here, and then you're over in the DJ booth?

METZ: We're the fun guys in the economics world (laughter).

MA: We think all economists are the fun ones.

WOODS: Yeah, you're all fun.

MA: So David and his colleagues sitting in their metaphorical DJ booth, they took on this task of doing a cost-benefit analysis on California's proposed indoor heat safety rules. They researched. They crunched the data. They got input from worker advocates and business groups. And here's what they found. Starting with the cost side of the ledger, they found this regulation would cost California businesses on the whole $100 million a year.

WOODS: OK. So that's a big number, but California's a big state. So let's put that into perspective.

METZ: The cost of these measures are likely to be a few hundred dollars per employee per year, and the typical establishment might pay $1,000 or more per year installing new ventilation equipment, taking time to train workers and supervisors on recognizing the symptoms of heat illness. And you're potentially asking them to sideline workers in providing rest breaks throughout the day.

WOODS: And when we're talking about which businesses will bear a lot of this new cost, David says we're not actually talking about things like, I don't know, metal foundries where some workers might spend all day near a giant blast furnace. I mean, that is pretty hot. Those kind of operations, though, they've got experience with heat, and they tend to have pretty robust heat safety protocols. So instead, it will be workplaces where the possibility of heat injury is not as obvious, and they may have to make a lot of changes - so places like dry cleaners or restaurants or warehouses.

METZ: I think there's an unacknowledged heat risk, particularly in supply chain and logistics, particularly when you're unloading trucks, which can sit out in the heat for hours, and then you bring them up to a loading dock, and the temperature inside the truck is over 100 degrees. And you have workers going in and out of a very hot environment.

WOODS: David says that these kinds of places will probably shoulder most of that $100 million a year cost, including a lot of money up front.

MA: But David thinks that this is a cost actually worth incurring because when they estimated the potential benefits of the regulation, they found it would help businesses grow their bottom line by about $200 million a year, mainly because businesses would see an uptick in worker productivity.

WOODS: And this raises an obvious question, which is, well, if this is so beneficial to businesses, why aren't they doing it already? And David has a few theories, and he says that it could be something to do with the fact that the risk of heat injury isn't something that a lot of businesses have had to think about in the past. And the connections between heat and productivity may not be obvious for some managers.

METZ: The injury rate increases as temperatures rise. There's plenty of scientific evidence to support this. Worker cognition and decision-making capability declines in hot environments. One study found that office productivity declines for each degree the indoor a temperature rises above 75 degrees. And we see this across countries and across economic sectors.

WOODS: Keeping employees cool will mean fewer of them keeling over when the warehouse or the kitchen or the truck becomes uncomfortably hot.

METZ: We estimate, based on recent trends, that heat mitigation measures in the workplace could reduce about 200 injuries a year and about one to two deaths per year in indoor work environments.

MA: Believe it or not, economists actually have time-tested ways of translating things like injury and death into dollars and cents. So when David and crew ran the numbers, they estimate the reduction in heat injury and death would add another $200 million a year in benefits.

WOODS: And add to that the increased productivity gains, and the heat safety rules are estimated to produce a total of $400 million a year on the benefits side of the ledger. So compare that to the $100 million in business costs. That is a 4 to 1 ratio. So for David, this is a very clear argument for implementing the regulations.

MA: And this is also why we found this study so intriguing - right? - because the debate over regulations often seems to frame the situation as, like, a zero-sum choice between business or labor, productivity or safety. And what this study suggests is that heat safety regs are actually a win-win.

WOODS: Plus, David says that if nothing changes, workers, especially low-income ones, could pay a heavy price.

METZ: Lower-wage workers are more likely to work in dangerous occupations and live and work in areas with greater heat exposure. Based on recent trends in California, in our study, we project workers' compensation claims due to heat-related illnesses will increase by more than 40% over the next decade.

MA: And that is just California. As we said at the top, states, the federal government, they're also considering ways to try and reduce heat injury because the problem is not going away.

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WOODS: This episode was produced by Nicky Ouellet with engineering by James Willetts. Dylan Sloan checked the facts. Viet Le is our senior producer. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.

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