Business case for gun control

Does gun ownership make economic sense for the U.S.?
By Todd Humber
|Canadian HR Reporter|Last Updated: 03/01/2018

“If you can’t win by reason, go for volume.” That was Calvin’s logic when his mom said he couldn’t bring Hobbes, his stuffed tiger, shopping.

It works in comic strips and it often works in the real world too. Where it never works, though, is the corporate world. Cooler heads and fact-based analysis always prevail, something we all know as the dreaded business case.

I actually adore business cases — taking the genesis for what seems like a great idea and subjecting it to fiscal scrutiny.

So with all the turmoil south of the border on gun control, a question arose: Could the right to own a firearm actually withstand the scrutiny of a CFO’s desk? (Full disclosure: I’m not a gun fan. I don’t think we need an outright ban, but I’m mystified about the gun culture in the United States and why there is so much resistance to restrictions on military-style weapons and change in light of massacre after massacre.)

I checked that bias at the door and sat down to do the business case — does gun ownership make economic sense for the U.S.?

Contribution to the economy

Guns are big business in the U.S.

Massive, actually. There are 141,500 direct full-time equivalents (FTEs) in the gun industry, according to the National Shooting Sports Federation (NSSF).

That’s roughly similar to the number of Americans working in oil and gas extraction (192,000 jobs) or apparel (145,300 jobs). It pales in comparison to some of the biggest sectors, including health care (14.3 million jobs) professional and technical services (eight

million jobs) and finance and insurance (5.8 million jobs).

But the gun industry pays wages of $5.85 billion (all dollars US) and has an economic impact of $20.2 billion, according to a 2017 report from the NSSF. The jobs are good-paying ones, too. Average wages and benefits are $50,423 and the industry has seen an 81 per cent increase in jobs since 2008.

Direct costs

But there are expenses that must also be taken into account. In 2017, there were 61,507 firearm-related incidents that led to the death of 15,592 people, according to the Gun Violence Archive. (This doesn’t include the roughly 22,000 Americans who committed suicide with a firearm.) All in, roughly 35,000 Americans are killed by guns each year.

There are direct costs to this carnage. The average bill for a gunshot victim who is treated in emergency and immediately released is $5,254, according to a new study from the John Hopkins University School of Medicine. It analyzed 150,930 gunshot patients between 2006 and 2014.

About one-third of gunshot victims (37 per cent) are admitted to hospital for at least one night. The average cost to treat these people is $95,887. That doesn’t include any rehab costs once the person is out of the hospital. Almost one in 10 gunshot victims who were brought to the hospital alive died either in the emergency room or after being admitted.

The total direct annual cost to the economy in treating victims, according to the study, is $2.8 billion.

Lost economic activity

The median personal income of an American in 2017 was $865 weekly, according to the Bureau of Labor Statistics. That’s $44,980 annually, assuming a 40-hour workweek.

From our earlier research, we know 15,592 Americans were killed by gun violence (not counting suicides). So, annually, the lost economic activity to the U.S. economy in wages not paid is  $701 million annually.

If we also take the suicide victims into account, the number soars to nearly $1.7 billion. The national unemployment rate in the U.S. is about five per cent — so if we assume the same percentage among victims, the real figure would be about $1.6 billion annually.

Conclusion

The direct annual benefit is $20.2 billion. The direct annual costs are $2.8 billion in health care and $1.6 billion in lost productivity. So, $3.4 billion versus $20 billion. The gun industry is, economically, worth it.

But wait. A CFO would point out a few things. First, we’re not accounting for the full loss of earning potential. While I was unable to find the average age of a gunshot victim, let’s use 20 as a thumbnail average for the number of years of lost earning potential per victim.

So this number is going to snowball. It’s $1.6 billion per year for all the people who died in 2017. But we’re missing the math on the people who died in 2016, in 2015, in 2014. In fact, the average person who was killed in 1998 by a gun would likely still work today.

That number is really more like $32 billion in lost productivity annually. Second, I glossed over the indirect costs around rehab and post-hospital care. And I didn’t account for lost productivity of workers who were injured and didn’t die — lovely things such as post-traumatic stress disorder (PTSD), permanent disabilities and lost wages due to extended rehabilitation. Toss in $10 billion more, to be conservative.

In other words, a $45-billion ask to generate $20.2 billion. Good luck getting that approved.

More than numbers

Of course, this story isn’t about numbers. It’s about people.

Every single gunshot that rings out impacts the workplace, either directly through violence on the premises or indirectly as workers lose family, friends and colleagues.

HR professionals know a company’s most valuable assets walk out the door at the end of every day. We have an absolute responsibility to do something — anything — to ensure they walk back in the next day and feel safe, secure and productive on the clock.

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