Researchers issue warning about overlooked factor cutting into Americans' paychecks: 'Consequences add up quickly'

Climate change is often seen as a future threat, but it's already cutting into Americans' paychecks.

How does climate change affect our income?

Originally, research estimated that climate change's negative impact on U.S. income was minimal — around 1%. But Derek Lemoine, an economics professor at the University of Arizona, wasn't convinced that number was accurate.

Lemoine adjusted the model to account for climate change's long-lasting damage that affects multiple regions simultaneously and found that "the impact is already here: Climate change has reduced U.S. income by an estimated 12%," per the University of Arizona.

Climate change has vast impacts on the economy — reduced worker productivity, disrupted supply chains, and agricultural losses — that persist and ripple. 

This new impact number, 12%, doesn't account for the additional economic impact of extreme weather events, like structural damage, making the total financial impact of climate change even greater. 

Why is recognizing this economic impact important? 

Climate change isn't some distant environmental concern — its effects are ongoing and tangible.

Recognizing the urgency of climate change shapes policymaking, business decisions, architectural designs, and more. Planning ahead is good, but planning for now is even better — for humans and for business.

Addressing climate change will be expensive, but far less so than dealing with the repercussions of ignoring it.

In 2023, the World Economic Forum reported that the "global cost of climate change damage is estimated to be between $1.7 trillion and $3.1 trillion per year by 2050."

Sustainable practices could mitigate many of these losses. Circular supply chains could avoid climate-driven losses, while climate-resilient infrastructure could lessen the impact of extreme weather events. Renewable energy could reduce operational costs and lower the pollution that creates a damaging climate in the first place.

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Lemoine wants to calculate the impact each year as more data becomes available, stressing that more climate consequences are coming — and fast. 

"A lot of the real cost comes from how temperature changes across the whole country ripple through prices and trade," Lemoine said, per the University of Arizona. "It's not just about the weather where we live. When every region is affected at the same time, the economic consequences add up quickly."

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