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One economist's argument for heat safety regulations

ARI SHAPIRO, HOST:

As global temperatures rise, the risk of heat injury is acute for many people while they're on the job. Proposed rules to protect workers are often seen as too costly, while a new study puts that to the test. Adrian Ma and Darian Woods from our daily podcast The Indicator From Planet Money take it from here.

ADRIAN MA, BYLINE: In the mid-2000s, 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.

DARIAN WOODS, BYLINE: So people who work in restaurants, factories, warehouses and greenhouses 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 train employees on how to respond to extreme heat.

MA: But before any of that can actually go into effect, state regulators wanted to understand the potential economic impact. So to do that, the state commissioned a study from this economic think tank, 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.

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

MA: 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. 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.

METZ: The typical establishment might pay $1,000 or more per year installing new ventilation equipment, taking time to train workers and supervisors and recognizing the symptoms of heat illness.

WOODS: And we were talking about which businesses will bear a lot of this new cost. David says it will be workplaces where the possibility of heat injury is not as obvious.

METZ: I think there's an unacknowledged heat risk particularly in supply chain 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.

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

METZ: We estimate 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. And when you compare that to the $100 million a year in business costs, this study suggests the heat regulations are actually a win-win. Darian Woods.

MA: Adrian Ma, NPR News.

(SOUNDBITE OF CHARLIE PUTH SONG, "LEFT AND RIGHT (FEAT. JUNGKOOK OF BTS)") Transcript provided by NPR, Copyright NPR.

Adrian Ma
Adrian Ma covers work, money and other "business-ish" for NPR's daily economics podcast The Indicator from Planet Money.
Darian Woods is a reporter and producer for The Indicator from Planet Money. He blends economics, journalism, and an ear for audio to tell stories that explain the global economy. He's reported on the time the world got together and solved a climate crisis, vaccine intellectual property explained through cake baking, and how Kit Kat bars reveal hidden economic forces.