In the past few years, numerous state and local legislators have proposed taxes on sugar-sweetened beverages (SSB) as a means of changing individuals’ behavior in order to reduce obesity and improve health. None of these proposals have succeeded thus far, hindered in part by beverage industry claims of related job losses. This paper provides a comprehensive assessment of the employment impacts of SSB taxes by reporting net impacts rather than gross employment impacts. A macroeconomic simulation model was used to estimate the employment impact of a 20 percent state-level SSB tax accounting for changes in SSB demand, substitution to non-SSBs, income effects, and government spending of new tax revenues for Illinois and California. Researchers found that a 20 percent tax on SSBs would result in a net employment increase of 4,406 jobs in Illinois and 6,654 jobs in California, representing a respective 0.06 percent and 0.03 percent change in employment. Declines in beverage industry employment were found, ranging from 985 to 1,357 in Illinois and from 1,453 to 2,294 in California depending upon the extent of substitution to non-sweetened beverages. However, the declines in the beverage industry jobs found for Illinois and California were offset by new employment in non-beverage industry and government sectors.
Employment Impact of Sugar-Sweetened Beverage Taxes
Sugary drinks add large amounts of calories to the diet and are linked with obesity. Many state legislatures have tried to impose new taxes on sugary drinks, but the beverage industry has opposed such measures claiming that taxes on sugary drinks will result in regional job losses because of reduced … More
A number of states and cities are considering the imposition of a sugar-sweetened beverage (SSB) tax aimed at reducing consumption and raising tax revenue to fund anti-obesity programs. The major research question that will be addressed by this study is: What is the net employment impact of reductions in SSB … More
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