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'Heat stress may hurt Indian manufacturing'
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SME Times News Bureau | 25 Mar, 2021
Hotter years have been routinely linked with reduced economic output in
the developing countries, and one reason is that people are less
productive at work and are more likely to be absent on hot days, a new
research showed on Thursday .
The aggregate effects are large
enough to significantly reduce the output of the manufacturing sector.
By using several high-frequency microdata sets of worker output and a
nationally representative dataset of more than 58,000 factories across
India, researchers have found that plants produce about 2 per cent less
revenue for every one-degree rise in annual temperature.
The greatest declines occurred in labour-intensive plants.
"The
effect of high temperatures on lower crop yields has been previously
established. This paper shows that rising temperatures can also hurt
economic output in other sectors by reducing the productivity of human
labour. The damage is greatest when already warm days become hotter. If
India wishes to succeed in becoming a manufacturing powerhouse using
cheap labour, we need to think hard about how we can adapt to a hotter
world," said Anant Sudarshan, South Asia Director of the Energy Policy
Institute at the University of Chicago.
Sudarshan co-authored
this study with E. Somanathan of Indian Statistical Institute, Delhi,
Rohini Somanathan of Delhi School of Economics, and Meenu Tewari of
University of North Carolina in the US.
The authors argue that
although the focus of the paper is on Indian manufacturing plants,
because heat stress is a universal physiological mechanism, there are
implications for any sector where labour is important such as
construction or services.
This multi-year study indicates that
climate control in the workplace removes productivity declines but not
absenteeism, presumably because workers remain exposed to high
temperatures at home and outside.
And the fact that
climate-control is expensive, makes its use limited. "We see that in the
absence of climate control, worker productivity declines on hot days
and we spot absenteeism even for workers in factories with cooling
facilities. When you compound that with limited adoption of climate
control technologies in manufacturing industries, you know that we are
dealing with a complex problem here," Somanathan said.
So what
does the future look like? "It is entirely possible that the industrial
sector might respond to high temperatures by increasing automation and
shifting away from labor-intensive sectors in hot parts of the world.
These adaptive responses may negatively influence wage inequality,"
added Somanathan.
Echoing a similar concern, Sudarshan said, "The
trends that we see in our data makes us think that warm countries in
the developing world may face a pervasive 'heat tax' that could damage
the competitiveness of their manufacturing sectors and further hurt the
wages of poor workers. Research into low-cost technologies to protect
workers from ambient temperatures may have significant social value."
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