Skip to Content

Sign In

Study: SSB Taxes Won’t Impact Jobs

February 20, 2014
 

Obesity advocates long have argued that implementation of a sugar-sweetened beverage tax will create a number of positive health outcomes. Now there’s evidence that a SSB tax could have economic benefits as well.

A 20 percent tax on sugary beverages would result in small job gains in both the public and private sectors, according to a new study published in the American Journal of Public Health.

In the first major study to predict how a SSB tax would impact the job market, researchers studied the employment impact of such a tax in Illinois and California. They concluded that 4,509 jobs would be created in Illinois and 6,252 jobs in California. This would represent a 0.06 percent and 0.03 percent increase, respectively.

“It’s encouraging to see that there will be net job gains as a result of taxes on sugar-sweetened beverages,” said Marlene Schwartz, director of the Yale Rudd Center for Food Policy & Obesity. “This is a win-win situation for both health and employment. Research shows that a tax on these beverages would reduce high rates of obesity and other related, and expensive, chronic illnesses such as type 2 diabetes and heart disease.”

The beverage industry has fought the implementation of SSB taxes by arguing such taxes would lead to job losses. But the study finds that if consumers reduce their SSB consumption as a result of such a tax, they would reallocate their spending money to non-SSB drinks and other goods and services. That would create jobs.

For example, truck drivers who once delivered regular soda would instead transport other beverages such as diet soda and bottled water (which are often made by the same companies anyway).

There also would be new revenue associated with the tax – the study found that a 20 percent tax on sugary drinks would raise $500 million in Illinois and nearly $1 billion in California.

“The industry’s estimates do not fully account for money that will be spent elsewhere in the economy or the newly generated tax revenue,” said Lisa Powell, the study’s lead author and a professor of health policy and administration at the University of Illinois at Chicago.

Although obesity has many causes, there is strong scientific evidence that sugary beverage consumption is directly linked to serious health problems such as obesity, heart disease and type 2 diabetes. Not only are these conditions damaging to people’s health, they also are expensive to treat.

SSB taxes would lead to a decrease in consumption of these beverages and help people lead healthier lives. Some studies suggest that a 10 percent price increase in sugary drinks would cut consumption by 8 to 10 percent. A 2012 study found that a 20 percent increase on SSBs – amounting to an added one to two cents per ounce – would reduce consumption by 24 percent.

Click here to read the full study, titled Employment Impact of Sugar-Sweetened Beverage Taxes.

High Fructose Issue- Sugary Drinks Taxes