Does Snow Hurt the Economy? How Much?

This week brings another severe winter storm

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When British officials attributed the U.K. economy's contraction in the fourth quarter of 2010 to wintry weather, we know of at least one snow-hardened Montreal resident who scoffed at the claim.

But as the U.S. braces for yet another barrage of ice and snow--with the National Weather Service issuing winter storm warnings for 19 states and blizzard warnings for six Midwestern states--it seems reasonable to ask: Is this winter's severe weather enfeebling an already-feeble American economy? The answer appears to be yes. Here's how:

  • Cash-Strapped Municipalities Are Hardest Hit, reports A.G. Sulzberger at The New York Times. He explains that many cities have already overspent their snow-removal budgets but face enormous pressure from their constituents to clear snow swiftly, forcing them to cut other government services rather than cut back on plows or salt. In Kansas City, Sulzberger notes, it costs the government about $150,000 per inch of snow.
  • Weather Comes at Worst Time, asserts Jonathan Berr at 24/7 Wall St. He says that record snowfalls are battering municipalities that "were already struggling with high unemployment, a stagnant housing market and decreased state aid caused by the economic slowdown." On top of all that, he adds, fuel and salt prices are rising.
  • Bad Weather in General Is Bad for Economic Activity, argues Kathleen Madigan at MarketWatch. Severe weather, she says, "keeps workers from getting to the job, closes production facilities, shuts down airports and curtails the delivery of goods," while also keeping consumers holed up at home rather than out at restaurants or movie theaters. She adds that since inclement conditions affect housing more than any other sector, storms in the South--home to half of all new house construction in America--may have a significant impact on the U.S. economy.
  • Businesses Shouldn't Lose Hope, states Sylvia Maria Gross at Marketplace. She reports that some restaurants, inspired by sites like Groupon, are enticing people into their stores on snow days by offering deals through social media and e-mail. Spin Neopolitan Pizza, for example, has a 20-percent-off "crummy weather voucher," while Chipotle offers 50 percent off, plus free chips and guacamole, to anyone willing to brave the snow for a burrito.
  • Here's Just How Much Snow Costs Mint assembles an infographic that calculates the financial impact of America's snowstorms in terms of forfeited retail sales, canceled flights, lost productivity, and accidents:

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