By Colin Lodewick
This summer across the U.S., Europe, and China, a historic heat wave and drought has turned mighty rivers into mudflats. Farmers have helplessly watched their valuable crops wilt in the fields. And hundreds of millions of people across the globe have had to huddle indoors, away from work, to avoid heat stroke and to keep the electrical grid from crashing.
“The Midwest produces up to a quarter of some of the staples of the global food supply,” says Amir Jina, an assistant professor at the University of Chicago’s school of social policy. “What happens when you suddenly have this big shock to a quarter of the food being produced? You’re definitely going to see price increases.”
Those price increases, says Jina, will ultimately fall the hardest on the poorest people. That’s because lower income households spend a larger proportion of their income on food and will therefore feel the pressure of rising food prices more quickly.
One long-term solution, according to Jina, is to shift certain crops that are at risk from harsher weather to where they’ll be able to thrive in the future. But it’ll take years before relocating something as massive as farming has an impact.
“A large wildfire or a drought in one of the big breadbasket areas can have this knock down effect on food prices around the world,” Jina says. “We can’t instantly move that grain production from where it currently is to somewhere more predictable.”
“Global economies are so interconnected that if one of these extreme weather shocks happens in a certain country, it doesn’t only affect the people there,” says Jina. “It can spread out through this very intricately connected network.”
While China’s factory shutdowns will have immediate consequences, Jina says there are more “insidious” ways that extreme heat can affect the global economy. Because people work a bit less in high temperatures and suffer more from heat exhaustion, it reduces labor productivity.
Reduced efficiency may prompt companies to spend more on a larger labor force, higher wages to offset hardship conditions, or better facilities. “The money has to come from somewhere and a lot of that’s going to get passed through to the consumer,” says Jina.