Heating Up Economic Thinking

Workers are on track for another dangerously hot summer, but the rules we need to protect them aren’t up to the task. Hotter temperatures, whether gradual or sudden, have a negative effect on workers across a variety of industries—outdoors and indoors—that have a downward pull on productivity.

The early months of 2026 have been the hottest on record and capped the warmest 12-month period ever recorded. To talk about what protections workers need, David Michaels and R. Jinsung Park joined me to discuss what rising heat means for people, places, and our economy.

As temperatures progressively increase, the number of recorded injuries—which often don’t account for all the injuries that happen—has increased. From 1999 to 2023, the number of heat-related deaths in the United States increased 117%, with 2023 being the highest and 2022 being the second highest.

Temperatures Up, Productivity Down

The consequences of extreme heat extend beyond worker health. Rising temperatures also reduce productivity, creating economic costs that ripple through entire industries. High heat obstructs productivity. Higher productivity increases a worker’s value to their employer and can improve bargaining power—the ability to negotiate working conditions, benefits, and wages.

Across certain labor-intensive manufacturing industries, for every degree over 80° Fahrenheit, productivity drops an estimated 4%. For indoor workers, as temperatures exceed 77° Fahrenheit, productivity drops an estimated 5-7%. For the 2.4 billion workers worldwide exposed to heat stress, productivity can drop up to 3% for each degree above 68° Fahrenheit.

Around one-in-five Americans in the workforce works outdoors. Between now and 2065, U.S. workers’ exposure to heat is expected to quadruple.

The Cost of Inaction

The productivity drag from high heat is another reason why ignoring the threat of climate change will continue to constrain economic growth. Globally, from 2000 to 2023, the number of workdays exposed to excessive heat during heatwaves increased by 23%. Since 1960, the average U.S. heat wave season in a city has increased by 46 days, while the average heat wave in a U.S. urban area now lasts four days.

By 2030, excess heat and resulting compromised work capacity is expected to cost the global economy $2.4 trillion. In the United States, economic losses due to heat have surged 70% from 2001 to 2023. From 2001-2023, heat-related productivity losses cost the construction industry $38 billion, while smaller, rural counties lost 3% of their GDP.

Technology, climate, and other external factors will alter the composition of the workforce. We can adapt to protect workers (joining other economies and competitors) or live with the new downward pull on U.S. productivity.

Heat Protections on the Ground

Despite growing evidence of the risks posed by workplace heat exposure, federal protections remain limited. Earlier this year, the Trump administration allowed the Biden-era OSHA heat protection program covering an estimated 36 million workers to expire without finalizing a federal heat standard. The administration also cut roughly 85% of the National Institute for Occupational Safety and Health workforce, leaving worker heat protections increasingly dependent on state action—yet only seven states currently have heat-protection standards in place.

In 2024, California approved new workplace rules to protect indoor workers from extreme heat. The rule establishes temperature thresholds and requires cooling areas and adjusted schedules and equipment. Prompted by streaks of triple-digit temperatures and surges of wildfires spanning thousands of acres, the heat protection applies to an estimated 1.4 million and aims to reduce heat injuries in the workplace by 40% by 2030.

Between 2016 to 2021, annual heat-related complaints in Nevada averaged around 133; through just nine months of 2024, 467 complaints were filed. In the summer of 2024, Las Vegas faced 74 days of temperatures exceeding 100° Fahrenheit, while Reno faced four 105° days in a row. As of April 2025, under Nevada’s Occupational Safety and Health Administration, any employer with more than ten employees (and explosive manufacturers of any size) must conduct job hazard analyses and provide protective measures and employee training.

24% of Texas’s total workforce is outdoor workers. In 2023, House Bill 2127 preempted local municipal ordinances that “mandated water and rest breaks for construction workers,” but the state remained under federal OSHA’s General Duty Clause. The rollback of local ordinances was ruled unconstitutional in a lower court but remains unresolved; by midcentury, Texas outdoor workers are estimated to lose 27 workdays due to extreme heat and $12.2 billion in total annual earnings.

It’s getting hot out here. It’s an empirical truth that minimizing emissions and keeping global temperatures from continuing to rise will make it possible for workers to keep doing their jobs well.

Heather Boushey

Professor of Practice

Heather Boushey is a professor of practice at the Kleinman Center. Boushey served in the Biden administration as a member of the Council of Economic Advisers and chief economist to the President’s Investing in America cabinet.