Study: No Job Loss from Soda Tax

(Getty Images)

(Getty Images)

Taxing sugar-sweetened beverages, such as soda, would have no negative effect on jobs, a new study shows. In fact, there would be a small increase, researchers estimate.

A team led by Lisa Powell, an economist at the University of Illinois at Chicago, analyzed the effect of a 20 percent tax on sugar-swettened beverages. That works out to a little more than a penny-per-ounce. They looked at the impact in two states: Illinois and California.

“Effectively we found that there was pretty much zero change in jobs, zero net effect,” Powell told me in an interview. 

These findings are counter to what the beverage industry has long held as a jobs-killer. But Powell says this analysis looked beyond just the effects of less sugary-beverage consumption and to the broader economy. Powell says that while some jobs would indeed be lost, those losses would be offset by gains in other areas. In particular, she noted that consumers who reduced consumption of sugary-drinks would likely switch to other drinks, such as 100 percent fruit juice or diet sodas.

“A truck driver may no longer be driving around sugar-sweetened beverages,” she said, “but he may be driving other goods.”

The authors called the results of their study “conservative” in part because they did not estimate reduced health costs that would result from reduced consumption of sugary-beverages.

In a statement, the American Beverage Assocation disputed the findings. “Americans have made it clear they don’t support taxes and other restrictions on common grocery items, like soft drinks,” the statement says. “Soda taxes have unintended consequences on middle-class jobs and small businesses.”

In 2012, voters in two California cities, Richmond and El Monte, turned down proposed soda taxes.

Warning Label Proposed

In other soda news, state Senator Bill Monning (D-Carmel) has introduced a bill that would make California the first state to require warning labels on sugary beverages. From the Associated Press:

SB1000 would require the warning on the front of all beverage containers with added sweeteners that have 75 or more calories in every 12 ounces. The label would read: “STATE OF CALIFORNIA SAFETY WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay.”

The measure is backed by the Latino Coalition for a Healthy California, the California Black Health Network and the California Medical Association.