Opportunity cost, according to Wikipedia, is the cost of something in terms of an opportunity forgone (and the benefits that could be received from that opportunity) or the most valuable forgone alternative.
In the past decade, social scientists, politicians, policy makers and academics have stumbled upon a lucrative device: express opportunity cost in terms of lost productivity. When documenting how much our bad habits, pathologies and wasteful consumption is costing the U.S. economy, cite the figures in billions lots of billions.
As far as I can make out, its an attempt to ensure that the study, survey, or legislative bill theyre attempting to foist upon the rest of us gains maximum publicity. The more the cost, the more important the findings.
Not surprisingly, many of these studies inevitably include a recommendation for more government spending in the area of our lives that the researchers have concluded we need to improve.
I dont know how theyre doing their calculations and I dont care. All I can tell you is that I sat down this weekend and googled the term in lost productivity together with billion and came up with thousands of hits. Then I added up all the numbers.
The total? More than $5.8 trillion in lost opportunity just for the U.S. And I can assure you thats a non-exhaustive number because I stopped after the first 580 entries. I have a life and simply didnt want to spend any more time in front of the computer on such a nice week-end.
$5.8 trillion is more than the combined 2005 Gross Domestic Product (GDP) of the Peoples Republic of China and the United Kingdom, the worlds fourth and fifth largest economies, respectively. It also represents 67% of the $8.7 trillion U.S. National Debt.
More significantly, $5.8 trillion is 46% of the U.S.s $12.5 trillion GDP in 2005 which suggests that a cessation of all our bad habits and illnesses could increase GDP by almost half. Yet an annual 3.8% increase in GDP is considered extraordinarily high by historical standards.
What set me off was an article I read Saturday morning on Inc.com which, yet again, included the words in lost productivity preceded by some wild figure in the billions of dollars. This one, a new study by researchers from no less an august institution than Brandeis University, claims that the U.S. is losing billions every year because horrors of horrors! businesses are not adapting to the needs of working parents.
Apparently, Americans are extremely upset that their work schedules dont allow them to greet little Johnny and Susie when they get home from school. So much so that the resulting stress is causing workplace disruptions, affecting performance and employee well-being, thus creating very toxic employee attitudes all to the tune of $300 billion per year.
Government spending for after-school care, community services and the like is, of course, recommended by the researchers.
Now, Im all for helping Moms and Dads ease the burden of parenting. But I do question the credibility of the $300 billion figure, which approximates the GDP of Saudi Arabia, the worlds 22nd largest economy. Asian economic powerhouse Indonesia is similarly sized.
Of course, compared with the U.S.s $12.5 trillion GDP, $300 billion represents only 2.4%. When juxtaposed beside the larger number, 2.4% really doesnt sound like all that much.
And if it was just the advocates for stressed-out parents who were claiming these remarkable losses, Id be the first to jump on the bandwagon and join the call for whatever new government program the researchers were recommending.
But now every Tom, Dick and Harry with an agenda is running around claiming billions in lost productivity for their own pet cause. No study is complete without some billion-dollar figure. Its become standard operating procedure.
Did you know that grieving for your loved ones costs U.S. employers $37.6 billion a year? Of course, thats only for human loved ones; grieving for non-humans (i.e., pets) costs us an additional $2.4 billion a year.
March Madness thats basketball March Madness not some obscure disease for hat makers costs us $3.8 billion annually and Sick-Building Syndrome another $15 billion.
Obesity? $21.7 billion a year. But thats just in California.
Of course, there are many legitimate causes for improving our lives that claim lost productivity figures. No one can fault the various cancer groups, anti-smoking or anti-addiction associations for documenting the costs caused by the horrible diseases and habits that they selflessly and tirelessly advocate against. And, for the most part, I wouldnt dream of questioning their sincerity.
But I cant help thinking that wildly inflating figures isnt going to convince anyone of anything. In fact, I believe that, ultimately, it is counterproductive. Learning every other day about another $20 billion lost as a result of yet one more bad habit creates a so what? reaction in the reader. Such commonality will eventually immunize us against focusing on the real, legitimate causes of lost productivity when they come up to the plate asking for our attention. You cant cry wolf too many times.
So heres the list from my Google search. Note that they apply only to the U.S. economy. The figures are for annual losses and exclude any claims due to one-time events, such as the Klez virus or a tornado in Wichita in 1983. I also tried to weed out studies that were duplicates of other studies. Some figures include other costs in addition to just lost productivity, such as medical. Each claim links to the article citing the accompanying figure.
And remember: the list is not complete!
Spam $20 billion
Online shopping $0.5 billion
March Madness $3.8 billion
Smoking $92 billion
Snoring $88 billion
Lack of sleep $50 billion
Chronic fatigue syndrome $9 billion
Illiteracy $225 billion
GERD $104 billion
Diabetes $40 billion
Caregiving to the elderly $29 billion
Caring for those with Alzheimer’s $36.5 billion
Obesity (just in California) $21.7 billion
Compulsive gambling $40 billion
Untreated and mistreated mental illnesses $105 billion
Mercury contamination before birth $8.7 billion
Watching YouTube $19 billion
Pain $80 billion
Poor web designing $100 billion
Fantasy Football $15 billion
Acute intestinal infectious diseases $23 billion
Worker interruptions $588 billion
Employees wasting time on the job $544 billion
Heart disease due to death and disability $152 billion
World Cup watching in U.S. $0.12 billion
Workplace grief over the death of loved ones (human) $37.6 billion
Roadway congestion $100 billion
Cancers $120 billion
Traffic crashes $230 billion
Migraines $13 billion
Asthma $4.6 billion
Poor power quality and reliability $120 billion
Poor management planning and control $880 billion
Workers who don’t feel "engaged" in their work $350 billion
Domestic violence $5 billion
Stress-related ailments $100 billion
Sick-Building Syndrome $15 billion
Seasonal influenza $10 billion
Commuting to and from work $45 billion
Skin disorders $10.2 billion
Medical malpractice $9 billion
Overactive bladder $0.84 billion
Rape robbery, assault, murder and arson $23 billion
Lymphatic Filariasis $2 billion minimum
Methylmercury $8.7 billion
Poor English skills among foreign-born residents $75 billion
Occupational injury $60 billion
Hepatitis-C $75.5 billion
"Presenteeism" $150 billion
Crime $130 billion
Spinal cord injury$2.6 billion
Repetitive motion injuries $9 billion
Invasive weeds $5 billion
Negativity in the workplace $3 billion
Schizophrenia $46 billion
Gunshot injuries $19.4 billion
Richard Reid’s Shoe bomber incident $9.5 billion
Adolescent childbearing $29 Billion
Soil sodicity $1 billion
Workplace accidents $51.7 billion
Drunk driving injuries and fatalities $46 billion
Ozone pollution on crop production $2 billion
Unfilled IT jobs in Silicon Valley $4 billion
Hangovers $148 billion
December 19, 2006