Even one day of closed roads because of snow,leading to temporary business shutdowns,can have a huge impact on the economy,according to the study conducted by international economic firm IHS Global Insight and the American Highway Users Alliance.
The study said the economic cost of shutting down a state for one day because of unusable roads during a snowstorm is greater than the cost of cleaning up the snow all season,said Greg Cohen,American Highway Users Alliance president.
The study,released Tuesday,is one of the first to focus on the economic cost of a snowstorm,Cohen said.
The American Highway Users Alliance promotes safe and efficient highways and celebrates the freedom they bring.
The overall one-day cost is in the hundreds of millions of dollars. For Ohio,that cost was $300 million for one day of closings this season.
The study derived its estimated costs from data on wages and salaries by industry from the Bureau of Economic Analysis,the Census of Retail Trade and software that calculates changes in output,employment and value as the result of change in demand.
“All of us as kids enjoyed having those free snow days,but this study looks at the real cost of snow,lost work,lost business and lost tax revenue snowstorms can cause if they're not cleared up quickly,” Cohen said.
Focusing on 16 states and two Canadian provinces,the study looked at the economic impact from such things as lost pay.
Lost wages for hourly employees was two-thirds of the overall economic impact,said Jim Gillula,study author and managing director of consulting services for Global Insight.
Many of the losses can be recouped,Gillula said,when hourly employees work overtime to catch up on missed work,for example.
Stores can recover as shoppers return to buy things they would have bought during the storm.
Other retail businesses,such as restaurants and gas stations,however,are unable to make up for revenue lost during a storm,Gillula said.
“When they lose sales on those days,they become permanent losses,” he said.
Lynne Breaux,the president of the Restaurant Association Metropolitan Washington,said it is nearly impossible to obtain statistics for economic losses for all Washington restaurants during the December and February snowstorms. But she said the restaurant industry definitely felt an impact from the lack of customers and cancelled holiday parties.
“It was tough. We're worried about the next time,” she said. “We really need to keep the roads open.”
RAMW studied eight Washington-area restaurants and found about $60,000 in lost wages due to snowstorms,Breaux said.
A spokesman for the D.C. Department of Transportation said it was not equipped to comment on the study's claims.
“Every day we see these kinds of breakdowns across the country in our economy when the failure of our transportation system to work well causes this dripping,this leaking out of the economy,” said Janet Kavinoky,director of Transportation Infrastructure for the U.S. Chamber of Commerce.
During the blizzards in February,the federal Office of Personnel Management estimated shutting down the federal government in Washington cost taxpayers $71 million per day.
A spokesman for the OPM said the agency could not comment on the study because it does not track or manage that kind of economic information.
Congress let the federal transportation bill,known as Safe,Accountable,Flexible,Efficient Transportation Equity Act: a Legacy for Users,or SAFETEA-LU,expire Sept. 30,Kavinoky said.
The act,which is the largest funding resource for highway transportation and safety,was recently extended to the end of this year,but Congress has not completed a long-term reauthorization.
“We would like to see Congress act swiftly this year to pass a long-term reauthorization to put states and locals on that sustainable glide path to investing in their transportation systems so they don't have to worry as much about where the money is going to come from in taking care of these kinds of events,” Kavinoky said.
In the midst of budget cuts,it is important for states to invest their money in manpower,salt and materials used for road maintenance during situations like snowstorms,Cohen said.
“Every day our roads are closed,we're losing more money in the economy than we're spending in cleaning it up.” Cohen said. “This past season has shown us that as communities,we cannot cut an essential safety function like snow and ice removal.”