Rising Temperatures and Heat Shocks Prompt Job Relocations, Study Finds

dcblogs writes: A recent study in the National Bureau of Economic Research has found that companies are quietly adapting to rising temperatures by shifting operations from hotter to cooler locations. The researchers analyzed data from 50,000 companies between 2009 and 2020. "To illustrate the economic impact, the researchers found that when a company with equal employment across two counties experiences a heat shock in one county, there is a subsequent 0.7% increase in employment growth in the unaffected county over a three-year horizon," reports TechTarget. "The finding is significant, given that the mean employment growth for the sample of businesses in the study is 2.4%." Heat shocks are characterized by their severe impact on health, energy grids, and increased fire risks, influencing companies with multiple locations to reconsider their geographical distribution of operations. Despite this trend, states like Arizona and Nevada, which have some of the highest heat-related death tolls, continue to experience rapid business expansion. Experts believe that factors such as labor pool, taxes, and regulations still outweigh environmental climate risks when it comes to business site selection. But heat associated deaths are on the rise. In the Phoenix area alone, it experienced 425 heat related deaths in 2022 and a similar number in 2023 -- record highs for this region. The study suggests that the implications of climate change on business operations are becoming more apparent. Companies are beginning to evaluate climate risks as part of their regular risk assessment process.

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