When it is too hot to work, a person’s work does not get done. When the heat reaches such levels that entire teams of laborers, production shifts, firms, or even industries find it impossible to function, the implications spread throughout supply chains and entire national economies.

Let’s take food retailers as a simple, familiar example to understand how difficult working conditions undermine the entire supply chain. These retailers—whether grocery stores, fast-food chains, or more formal restaurants—all need raw materials such as meat, dairy, and bread products. But in meat packing plants, like a National Beef factory in Kansas, working conditions make it nearly impossible to operate safely or efficiently. As outside temperatures reach or exceed 100 degrees, workers outfitted in heavy safety aprons are cooled only by fans, not air conditioning. As sweat drips into and fogs their safety glasses, they cannot see well enough to perform their physically demanding, dangerous jobs safely—assuming they have not already passed out from the heat.

That’s a risk for many workers, throughout the supply chain. Warehouse workers stocking huge pallets of supplies rarely have access to air conditioning during their shifts, leading to a risk of heat exhaustion. In fast-food restaurants, some workers allege that the front of the store might be appropriately cooled, but in the back, near friers and grills, the heat reaches excessive levels. Worried about her health, one McDonald’s employee left her shift early rather than risk fainting, noting that it was the first time in her more than 20-year tenure with the company that she felt compelled to do so.

Climate change–induced conditions on farms also have reduced crop yields. In blazing sun and extreme temperatures, there simply may not be enough water to keep crops alive, leading to shortages of various grains. In addition, workers cannot function in such conditions, especially if they lack access to water or shelter—as is widely true in Texas, where the governor outlawed rules that would mandate that companies provide regular water breaks for employees working outside.

Such moves might be attributed to producers’ attempts to save money. One construction company that provides bottled water to workers estimated a monthly cost in the thousands of dollars. Installing air conditioning systems in warehouses and factories might impose costs in excess of $200,000, depending on the size. But ignoring and avoiding such provisions also is expensive, particularly in the long term. The loss of productivity due to heat accounts for an estimated 2.5 billion hours of lost labor, which in turn implies a cost of around $100 billion for the U.S. economy as a whole. On a global span, increasing temperatures could reduce overall productivity by one-quarter from current levels.

Of course, food supply chains are not the only industry affected. Tourism destinations, including Disney parks, recognize threats to their revenues created by high temperatures. Zoos note the steeply increasing operating costs they face in keeping their animals safely cool. Service providers, such as home health care workers or cleaning services, cannot maintain high quality services if customers cannot afford to keep their homes cool enough for them to perform necessary tasks. Furthermore, if workers live in non–air conditioned spaces, their sleep probably is disrupted, which tends to reduce their productivity once they reach work.

When many of these warehouses, factories, farms, stores, and homes were built, often decades ago, global temperatures were not as high, and it was sufficient to cool these spaces with fans or natural wind power. Today though, as high temperatures around the world continue to break records, they are proving insufficient. The question becomes whether companies (and likely consumers) pay to retrofit production facilities to allow the flow of goods through supply chains now, or if the entire world pays later, in the form of lost productivity and risk to the health and safety of workers.

Discussion Questions:

1. Which stage(s) in food retailing supply chains should be held responsible for ensuring safe working conditions for the workers who participate in each stage? Should there be collaboration, or should they be independent?
2. How might firms throughout the supply chain leverage new technologies to address heat-related concerns?

Sources: Coral Davenport, “Heat Is Costing the U.S. Economy Billions in Lost Productivity,” The New York Times, July 31, 2023; Justin Worland, “Extreme Heat Is Hitting Companies Where It Hurts,” Time, July 13, 2023; Alicia Wallace, “‘It Comes Up on You Fast’: Scorching Heat Is Crushing American Businesses,” CNN, July 23, 2023