Could permanent daylight saving time help “jump-start” the economy?

Lawmakers on both sides of the aisle are behind a bill that would affect all U.S. residents: A permanent change to daylight saving time starting in November 2023. Aside from avoiding the hassle — and sleep deprivation — of changing the clock twice a year, the effort could boost the economy, lawmakers say.

The Sun Protection Act should increase consumer spending and change energy consumption by giving Americans an extra hour of sunlight at the end of the workday, lawmakers said in a statement on the bill. law. The passage of the bill could “boost” the economy and effectively act as a “stimulus package in its own right,” wrote Sam Lyman, policy director at the Orrin G. Hatch Foundation, in an article in opinions in The Hill.

But DST’s year-round economic benefits may be darker than its supporters suggest, according to PNC economist Kurt Rankin, who studied studies of weather changes and their impact on the economy. . First, there is not much research available on the subject, at least when compared to other aspects of the economy such as wages or inflation. And existing research is limited in scope and raises questions about what the national economic impact would be.

“From an economist perspective, I think profits will be minimal,” Rankin told CBS MoneyWatch. “It’s not something that’s going to cure the problems facing the US economy for the next year or two: worrying about inflation, rising interest rates, the shortage of the chain. supply “.

A finding that is often cited as proof of the economic benefits of change comes from the JP Morgan Chase Institute, which in 2016 found that consumer spending fell 3.5% after the end of daylight saving time in November. . This suggests that some consumers reduce their spending when there is one hour less light at the end of the day so that they can buy or place orders.

But the Chase Institute study focused on spending in Los Angeles, a relatively limited area. And the researchers noted that other policy changes, such as lowering the sales tax, could give a bigger boost to consumer spending.

Some business groups say they are studying the subject. The National Retail Federation said in an email that it “has historically supported daylight saving time, but that position does not reflect the current debate over the creation of permanent daylight saving time, which was approved by the Senate this week.” .

He added: “We are examining the implications of this change and consulting with our members.”

It could be a boost for restaurants

That said, Rankin said the shift to permanent DST could benefit one sector of the economy: hospitality companies such as restaurants and hotels. More light towards the end of the day could increase the demand for these services, which would help these companies and the workers of the concert economy like the drivers of DoorDash.

“This is the sector that is having the most difficulty recovering from the pandemic, so giving some security to workers in this sector will be helpful,” he said.

Rankin added that he himself likes the idea of ​​a permanent change, although he does not see much of an economic case for the bill. “I am in favor of getting rid of changing watches because it makes you lose your agenda,” he said. “I’ve been eating an hour and a half late for the last week, trying to adjust.”

The energy saving argument is “questionable”

The findings of the research on energy saving, one of the main reasons why supporters suggest that daylight saving time be permanent, are contradictory. A 2008 Department of Energy study found that there was a 0.5% saving in electricity per day during the four weeks following the nation’s extended summer hours in 2005.

Researchers at Yale University in a 2011 article found that daylight saving time actually increased energy consumption in Indiana because higher heating and cooling costs outweighed the lower demand for lighting. electric. The researchers noted: “We find that the long-standing justification for the SDR is questionable.”

But this document is based on energy consumption in a state, again, a small part of the US, and may not be more widely applicable.

Unanimous approval in the Senate

The bill, which was passed unanimously by the Senate on Tuesday, must now be passed by the House and signed by the president to make it law.

At a hearing in the Energy Subcommittee on Consumer Protection on March 9, experts urged lawmakers to make the change, citing issues such as safety and increased traffic accidents when travelers traveled during the dark.

“In short, darkness kills. And darkness in the evening is far more deadly than darkness in the morning,” University of Washington professor Steve P. Calandrillo told the committee.

Americans themselves are divided on the issue, according to polls. About 3 out of 10 people said they would like to have summer time all year round, while an equal number said they would rather keep the current system of going back one hour in November and moving one hour forward in November. March, an AP- The NORC survey was found in 2019. 4 out of 10 people said they wanted to change to standard time all year round.

In the end, the reason for switching to permanent daylight saving time may depend on personal preferences, not the economy. As JPMorgan Chase put it: Americans “can just enjoy having the extra daylight.”

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