Published: February 2014

ID #: 68637

Journal: Am J Public Health

Authors: Powell LM, Wada R, Persky JJ, Chaloupka FJ

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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.

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