Ok, so we all know that this week's winter storm caused copious amounts of snow and ice to blanket much of the state. And, of course, we couldn't forget the school closings and sore backs (hey, shoveling a foot of snow out of a driveway is strenuous!).
But, what about the actual financial impact of a huge winter storm? Just how much money did all that snow cost the state? Hard to quantify? It sure would seem like it. But, one firm, IHS Global Insight, has decided to go ahead and try to figure the economics out.
In a report released this week titled, The Economic Costs of Disruption from a Snowstorm, IHS said the storm had a $251 million a day economic impact in Michigan. The study took into account both direct (think loss of income because of a missed day of work) and indirect effects (such as lost sales in the local economy) of the storm into account when figuring out the numbers.
Aside from the actual economic data, IHS also reached three conclusions about the financial impact of winter storms, and I quote:
- Among all economic classes, snow-related shutdowns harm hourly workers the worst, accounting for almost two thirds of direct economic losses.
- The indirect economic impacts of snow-related shutdowns, including loss of retail sales and income and sales tax revenues, roughly double the initial economic impact.
- The economic impact of snow-related closures far-exceeds the cost of timely snow removal. Although states and localities may be hesitant to expand significant upfront resources in the short-term, the long-term payoff more than justifies the expense.