Employers pass up tax incentives to create jobs in some rural counties due to poor health status

For decades, rural areas attracted jobs with relatively low wages, taxes and land costs. Globalization of the economy has made the wage advantage much less important, and now poor health in rural areas has become a major additional consideration for employers.

Wages, taxes and land costs are relatively high in Chapel Hill, N.C., and surrounding Orange County, but some employers have decided to stay and expand there rather than take advantage of incentives offered to locate in rural North Carolina counties because those counties have lower health status and are likely to cost the employers more in health-insurance premiums and payouts, says Dr. Brian Caveney of the occupational and environmental medicine faculty at the Duke University Medical Center.

Caveney, who also has degrees in law and public health, made the point today as he spoke to the Kentucky Chamber of Commerce's annual Economic Summit, a gathering of the state's business leaders, on the costs of obese employees. The employers who have chosen to stick to Orange County think its relatively high health status "counteracts even the tax-incentive structures that are on the table in some of the other counties," he said.

Caveney presented a wealth of data, including one graph showing that employers pay more in heralth and workers' compensation costs for workers who are obese than for those who smoke, largely because the more serious health effects of smoking are manifested later in life, often after the employee retires and becomes a Medicare beneficiary. He also cited risks of obesity that are not well known, such as more susceptibility to pesticides and other neurotoxins, and less heat tolerance.