CDC Study of El Paso’s Smoke-Free Law Adds to Evidence that Smoke-Free Does Not Hurt Business

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

Feb. 26 2004

Washington, DC — Adding to the growing body of evidence that smoke-free workplace laws do not hurt business, a new study released today by the U.S. Centers for Disease Control and Prevention (CDC) finds that El Paso’s comprehensive smoke-free policy did not affect restaurant and bar revenue in the year after it took effect on January 2, 2002. The CDC and the Texas Department of Health analyzed sales tax and mixed-beverage tax data in the 12 years before and the year after the effective date of the law, which prohibits smoking in all indoor public places and workplaces, including restaurants and bars. Their analysis found no statistically significant changes in overall restaurant and bar revenues, bar liquor sales, or restaurant and bar revenue as a percentage of total revenue. The latter finding refutes arguments often made by opponents of smoke-free laws that, even if bar and restaurant revenues grow after such laws take effect, they do not grow as fast as the rest of the economy. The study was published in the CDC’s Morbidity and Mortality Weekly Report.

This study is consistent with the findings of other studies and the experience of the growing number of states and communities that have enacted smoke-free laws, all of which show that smoke-free laws at worst have a neutral impact on the restaurant and bar business and may have even a slight positive impact. The evidence is clear that smoke-free laws protect the public’s right to breathe clean air, free from the proven dangers of secondhand smoke, without harming business. There is simply no excuse for policymakers not to enact such laws in every state and every community.

The new study underscores why the public, policy makers and the media should treat with skepticism the claims of economic doom and gloom made by opponents of smoke-free laws. Opponents of such laws try to generate negative headlines based on anecdotal, unrepresentative evidence of economic harm, with the goal of weakening or repealing the laws and heading them off elsewhere. As has happened in El Paso, these claims of economic harm are discredited time and again by impartial economic data.

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. 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 2003 study published 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.

These findings are corroborated by New York City’s experience since its comprehensive smoke-free law, which includes restaurants and bars, took effect March 30, 2003. Official employment, tax and tourism data all indicate New York City's hospitality industry has been stronger since the smoke-free law took effect. According to the city's finance commissioner, New York City bars and restaurants paid the city 12 percent more in tax revenues in the first six months after the smoke-free law took effect than during the same period in 2002. State employment statistics show the city's restaurants and bars added more jobs in the three months after the smoke-free law took effect than in the same period a year earlier. According to the business journal Crain's, the city's hotel revenues in July increased for the first time in nearly three years and hotel occupancy is on the upswing.

The evidence is also clear that the public strongly supports New York City’s law (and a subsequent state law) and prefers smoke-free air. A September poll conducted for the Campaign for Tobacco-Free Kids found that New York City voters supported the city law by a margin of 70 to 27 percent. Zagat's annual survey of restaurant-goers found that 96 percent are eating out as much or more since the law was passed. Zagat's conclusion: "the city's recent smoking ban, far from curbing traffic, has given it a major lift."

Economic data indicate that Delaware also has had no negative economic effect as a result of their smoke-free law, which took effect November 27, 2002. According to the National Restaurant Association, restaurant business was up in Delaware in 2003, the first full year of the state’s smoke-free law. The association estimated business would be up 5.7 percent in Delaware from 2002 to 2003, outpacing surrounding states and the nation as a whole. State statistics show an increase in the number of restaurant licenses from 3,291 to 3,323 between November 2002 and October 2003, while tavern/taproom licenses rose from 102 to 106.

The most extensive evidence of the economic impact of smoke-free laws comes from California, which was the first state to enact a comprehensive law (covering restaurants in 1995 and extended to bars in 1998). From 1997 to 2001, taxable annual sales for restaurants and bars in California increased from $28.2 billion to $36.8 billion, according to state statistics. This 30.4 percent increase 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 state. Altogether, California bar and restaurants had 107,000 more employees in 2002 compared to 1997.

Smoke-free is good for health. Secondhand smoke contains more than 4,000 chemicals, including 69 known carcinogens such as formaldehyde, lead, arsenic, benzene, and radioactive polonium 210. It is a scientifically proven cause of serious health problems, including lung cancer, heart disease and chronic lung ailments such as bronchitis and asthma. A study issued in 2002 by the International Agency for Research on Cancer of the World Health Organization concluded, “Nonsmokers are exposed to the same carcinogens as active smokers. Even the typical levels of passive exposure have been shown to cause lung cancer" among people who have never smoked. Studies have shown that secondhand smoke is responsible nationally for thousands of deaths each year. Children exposed to secondhand smoke are especially vulnerable, suffering more asthma, bronchitis, ear infections and other ailments.

This evidence has spurred the growing, bipartisan momentum across the country to protect the public’s right to breathe clean air. Five states – California, Connecticut, Delaware, Maine and New York – have now enacted comprehensive, statewide smoke-free laws, and Massachusetts is on the verge of doing so. Florida’s strong law, the result of a voter-approved constitutional amendment, exempts only stand-alone bars. A growing number of cities and counties across the country have also taken action. States and communities can rest assured that they can act to protect health without harming business.

 

Media Contacts

Related Information