Study Indicates New York City Smoke-Free Law Has Not Harmed Economy

Statement of William V. Corr Executive Vice President, Campaign for Tobacco-Free Kids

Jul. 25 2003

Washington, D.C. — A new study released this week by New York City's Department of Health shows that New York City's restaurants and bars have added more jobs since the city's new smoke-free workplace law took effect March 30 than in the same period a year ago. This study is the first evidence of the economic impact of New York City's smoke-free law that is based on hard economic data rather than anecdotes, and it indicates strongly that the new law is not hurting restaurants and bars. These findings refute claims by opponents of the new law that it has hurt the restaurant and bar business and are consistent with studies and economic data in other communities and states with smoke-free laws, which show consistently that smoke-free laws have a neutral or slightly positive impact on business.

The new study, based on data from the New York State Department of Labor, found that seasonally-adjusted employment in the city's restaurants and bars grew by 0.9 percent between March and June of this year, compared to 0.2 percent in the same period last year. Restaurant and bar employment also has grown faster than the 0.1 percent overall job growth the city has experienced since the smoke-free law took effect. Between March and June of this year, employment in the city's restaurants and bars increased by about 1,500 seasonally-adjusted jobs, amounting to an absolute gain of nearly 10,000 jobs since the smoke-free law took effect. "Given the data available thus far, the (economic) model indicates that the actual growth in restaurant and bar employment was similar to what would have been expected, whether or not the Smoke Free Air Act had been enacted," according to the Department of Health press release. (That release can be found at http://nyc.gov/html/doh/html/public/press03/pr081-0723.html.)

The new study underscores why the public, policy makers and the media should treat with skepticism the claims of economic doom and gloom being made by the tobacco industry and other opponents of New York's law and other smoke-free laws around the country. Every time one of these laws is implemented, opponents try to generate negative news coverage and headlines based on anecdotal, unrepresentative evidence of economic harm, with the goal of weakening or repealing the laws and heading them off elsewhere. As is happening now in New York City, these claims of economic harm have been discredited time and again by the impartial data of sales tax receipts and employment statistics.

Independent, objective and peer-reviewed studies of smoke-free restaurant laws around the country show there is no long-term negative impact on restaurant sales or employment from these laws. In fact, the impact appears to be neutral at worst and even slightly positive. A series of studies published in the January 1999 issue of the Journal of Public Health Management and Practice found that sales tax data from 81 localities in six states consistently demonstrated that ordinances restricting smoking in restaurants had no effect on revenues. A more recent study published this year in the journal Tobacco Control examined the credibility of the smoke-free economic analyses that have been done in recent years. Its authors found that every study that found a smoke-free policy had a negative economic impact either lacked independence from the tobacco industry and/or objective measures. Conversely, the studies that showed no adverse economic impact from smoke-free policies were funded independently, used objective measures and were peer-reviewed.

The most extensive evidence of the economic impact of smoke-free laws comes from California, which was the first state to enact a comprehensive smoke-free workplace law (covering restaurants in 1995 and extended to bars in 1998) and has the only statewide law in effect long enough to have meaningful sales tax data. As usual, state economic data – sales tax receipts and employment statistics – proved wrong the tobacco industry's predictions of a steep loss in business. From 1997 to 2001, taxable annual sales for restaurants and bars in California increased from $28.2 billion to $36.8 billion, according to the California State Board of Equalization. This 30.4 percent increased outpaced the 18.9 percent increase in taxable annual sales from 1993 to 1997, before bars became smoke-free. Employment in California bars and restaurants increased by 12.5 percent from 1997 to 2002, the same percentage as from 1992 to 1997, according to the California Employment Development Department. Altogether, California bar and restaurants had 107,000 more employees in 2002 compared to 1997.

California's experience also provides powerful evidence of the growing public and business support for smoke-free laws after they are actually implemented. A poll released in November 2002 found that 75 percent of bar owners and employees in California prefer to work in smoke-free environments, up from 47 percent in 1998. Seventy-nine percent of bar patrons said it was important to have smoke-free bars and restaurants, up from 66 percent in 1998. In addition, 87 percent of bar patrons, including 71 percent of smokers, said they were more likely to visit bars, or had not changed their bar-going behavior, as a result of the law.

The tobacco industry is stepping up its efforts to defeat smoke-free laws because of bipartisan momentum across the country to enact such laws and protect the public's right to breathe clean air. Five states have now enacted comprehensive, statewide smoke-free workplace laws that include bars. These laws are now in effect in California, Delaware and New York (New York's statewide law took effect July 24) and will soon take effect in Connecticut and Maine. On July 1, Florida implemented a new law requiring restaurants and other workplaces to be smoke-free, with the exception of stand-alone bars that earn no more than 10 percent of revenue from food sales (this law implements a constitutional amendment approved by 71 percent of Florida voters). Other places that have recently enacted strong smoke-free policies include Boston, Dallas, Austin, Albuquerque, Bloomington, IN, Pueblo, CO, and Lexington, KY.

The tobacco industry is focusing increasingly on economic arguments against secondhand smoke protections because it knows it has lost the health argument. Studies from virtually every major public health authority, from the Surgeon General, to the Environmental Protection Agency, and the World Health Organization, have concluded that secondhand smoke contains thousands of dangerous chemicals and dozens of known carcinogens including formaldehyde, cyanide, arsenic, carbon monoxide, methane, benzene, and radioactive polonium 210. In addition to lung cancer, secondhand smoke is proven to cause heart disease, emphysema, and other illnesses and is responsible nationally for thousands of deaths each year. Studies show that kids are especially vulnerable to other people's smoke, suffering more respiratory problems, ear infections, and asthma.

While there are bound to be some bumps in the road as people acclimate to smoke-free workplace policies, the benefits are sure to far outweigh any temporary difficulties during the transition. We urge policymakers to stand up to the tobacco industry and protect everyone's right to breathe smoke-free air.

 

Media Contacts