Earth Science - Other

How Wildfire Effects the Economy



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When wildfires occur the media often sensationalizes the scope of the devastation and the grandeur of the event, but the economic impact is never fully examined in depth. In the budget of governmental agencies, wildfires can become a crushing blow to maintaining adequate services for the community after the event, as resources designed to last a fiscal year are consumed in a matter of weeks. The burden of correction then falls upon an already heavily strained citizenry, that must decide whether to infuse more tax money or settle for inadequate or vastly reduced public services. In every instance of a wildfire, battling the fire itself is but a small portion of the associated cost - in the aftermath the clean-up is incredibly labor intensive and expensive.

In addition to the resources expended by government, a wildfire can be a crushing blow to the local economy of a small community. Businesses that are destroyed or close down during repairs result in unemployment, which further reduces the available financial resources to rebuild. Necessary commercial items that are required for daily life may not be available, causing inconvenience for individuals in the midst of adjustment. Recreational venues such as sporting events and concerts are postponed or canceled, resulting in further lost revenues for both government and individuals.

The impact of wildfires upon the insurance industry is staggering, as claims number in the thousands with each wildfire occurrence and payouts reach billions of dollars. Eventually consumers absorb these costs in higher premiums, not only for customers in the areas affected but nationwide as insurance companies attempt to remain in the black. Often, individuals residing in the affected areas are placed in a "high risk" category, or are dropped by insurance carriers altogether as being bad risks for continued coverage.

The output and productivity of the agriculture and manufacturing industries are reduced in areas experiencing wildfires, and not only by the damage inflicted upon their physical property. Manpower for enterprises becomes in great demand after a wildfire as workers who have lost all of their material possessions scramble to find the basic necessities of life, and may no longer have transportation to get to work.

Perhaps the only segment of society that benefits financially from wildfires is the construction industry, as monies paid to homeowners becomes the base of a thriving local rebuilding effort. Even in this scenario, there is a shortage of competent skilled labor to complete projects.

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