Taxes on sweetened beverages work – they reduce sales of taxed products and raise revenues to address community needs. However, critics of taxes claim that they drive loss of jobs in beverage-related businesses.
SUMMARY
This brief compiles current evidence about the effects of taxes on employment.
- There is no evidence from well-designed evaluations that sweetened beverage taxes cause job loss – overall and in affected industries. This finding is consistent with other data showing no loss of revenues among businesses potentially impacted by taxes.
- In Philadelphia, two studies using unemployment claims and employment data found no job loss. An analysis of wage tax data by the city found collections have increased since the tax went into effect for industries potentially affected by the tax.
- In Berkeley, jobs in the food sector (restaurants, supermarkets, and convenience stores) increased after the beverage tax was implemented.
- Studies in Mexico and Chile also found no job losses after tax and food labeling laws, respectively, were passed.
- The findings from a systematic review and a modeling study did not find negative impacts of taxes on employment.
- It is likely that consumers who reduce purchases of taxed beverages are buying more of other products. Sales data support this – while sales of taxed beverages decline, sales of untaxed beverages like water increase.