Declining Air Quality to Cost U.S. Companies and Employees Billions by 2050s, Study Warns
Concerns over deteriorating air quality in the U.S. are growing, with climate change fueling the frequency and intensity of wildfires. By the 2050s, about half of all Americans are projected to experience “Red Days” characterized by unhealthy air quality. This alarming statistic doubles the current annual loss of $125 billion suffered by workers due to poor air quality.
The adverse effects of polluted air are not evenly distributed, and the western U.S. may witness a staggering 50% increase in PM2.5 pollution. Residents of cities like New York, Washington, and Chicago have already experienced orange smoke-filled skies from Canadian wildfires. Outdoor workers, including those in blue-collar industries such as construction and gig workers like dog walkers and delivery drivers, bear the brunt of the poor air quality.
The Environmental Protection Agency (EPA) estimates that in 2024 alone, a quarter of the U.S. population will be exposed to unhealthy air. If left unaddressed, this surge in pollution will result in hundreds of billions of dollars in lost pay annually across various industries.
Ozone (O3) and particulate matter 2.5 (PM2.5) are major pollutants, with PM2.5 being the primary component of wildfire smoke. This minuscule particulate matter can penetrate the heart and lungs, increasing the risks of heart attacks, lung cancer, and strokes.
Economists predict that for every increase of one microgram per cubic meter (µg/m3) of PM2.5, the U.S. labor market will suffer an additional loss of $123 in pay. This financial burden stems from lost workdays and diminished productivity, affecting both employees and the companies they work for. Sick days and decreased productivity further disadvantage employers.
First Street, an analytical firm, projects an 8% average increase in PM2.5 concentration across the U.S. by 2024. The EPA considers exposure to more than 9 µg/m3 of PM2.5 unhealthy.
If First Street’s projections hold true, the U.S. labor force would lose a staggering $334.1 billion in 2054 alone, more than doubling the current annual loss of $125 billion due to poor air quality.
Globally, companies already lose more than a billion workdays each year due to air pollution. However, this number could triple to 3.8 billion days by 2060. High levels of pollution in cities make it difficult for firms to attract top talent, which negatively impacts their profitability and growth potential.
The impact of poor air quality differs regionally, with an expected 50% increase in PM2.5 pollution in the western U.S., while other cities like Atlanta face higher levels of ozone (O3) than PM2.5.
Wildfires in recent years have already negated the positive effects of clean air regulations in the U.S. “The statistical signals are clear. We are seeing rapid increases in air pollutants after decades of legislation to reduce pollution,” warns Matthew Eby, CEO of First Street. “The major concern moving forward is that climate is much harder to regulate than industry.”
Key statistics:
– Average annual wildfires in the U.S. from 2013 to 2022: 61,410 (government data)
– Expected increase in wildfires by 2030: 30%
– Average annual pay losses due to bad air quality: $125 billion (National Bureau of Economics Research)
– Additional loss in pay by the American labor force in 2054: $209 billion (based on EPA data, NBER figures, and First Street estimates)
– Number of workdays lost globally due to air pollution annually: 1.2 billion
– Number of people exposed to “Red Days” in 2024: 83 million (about a quarter of Americans)
– Impact expected on companies in the western U.S. and those relying on outdoor workers. By 2054, 51% of U.S. residents could be exposed to unhealthy air.
Analyst comment
Negative news: Declining Air Quality to Cost U.S. Companies and Employees Billions by 2050s, Study Warns.
As an analyst, it is clear that declining air quality in the U.S. will have significant negative impacts on the market. By 2050s, half of all Americans may experience unhealthy air quality, resulting in billions of dollars lost in pay annually. This will affect various industries, decrease productivity, and lead to health issues for workers. The increasing pollution levels will make it harder for companies to attract talent, impacting profitability and growth potential. Urgent action is needed to address this concerning trend.
