VERIFY: Will a soda tax in Seattle kill jobs

The Seattle City Council is set to vote Monday on a controversial soda tax. Our Verify team investigated some of the claims made about the proposal.

Seattle Mayor Ed Murray wants a tax on soda to pay for education in Seattle.

Opponents say the tax – 1.75 cents per ounce – is a job killer, not only at restaurants and stores, but at beverage distributors.  We sought to VERIFY those job loss claims based on the evidence that exists in two cities that have already implemented a tax.

Here is who we talked to on the subject:

Lindsay Bracale - a spokesperson for the Pennsylvania Department of Labor and Industry
Marisa Waxman - a Philadelphia Deputy Revenue Commissioner
Duane Stanford - who runs an industry database called Beverage Digest
Jennifer Falbe - a researcher at the University of California, Berkeley

And we also looked at data from the Public Library of Science and Centers for Disease Control.

On January 1, Philadelphia began taxing sodas 1.5 cents per ounce. A simple Google Search shows lots of claims about job loss at major distributors

Take, for example, Pepsi told the Philadelphia Inquirer it was laying off 80 to 100 workers at three distribution plants because of the new Soda Tax.

"The Philadelphia beverage tax is designed to fund pre K programs for Philadelphia kids (and) a program called rebuild," said Philadelphia Deputy Revenue Commissioner Marisa Waxman, who was in Seattle and testified in front of the City Council. 

Waxman says the planned layoffs can't be directly connected to the tax, which is not even five months old.

"That isn't something (can) really be verified - those are self-reported by big soda corporations that are in fact suing the city to prevent the tax."

Bracale at Pennsylvania's Department of Labor and Industry could only find one notification of layoffs at a Pepsi Facility in Reading and that "we cannot connect this to the soda tax."

She also said, as of right now, "they can see no discernible impact" from the tax.

Berkeley, California, is the other town with a soda tax. Starting in 2015, the city implemented a one cent per ounce tax on sugary drinks.

Jennifer Falbe, a University of California, Berkeley researcher who looked into the impact in that city, also found very little impact on sales at small businesses, but an uptick in sales of other types of drinks, such as water.

The Public Library of Science agreed in a separate study sponsored by Bloomberg Philanthropies and support from the University of North Carolina, claiming after the tax went into effect:  "Overall beverage sales rose across stores in Berkeley, sales of water rose by 15.6%"

So how could those layoffs back east be explained?  There is more than one source which strikes it up to a change in consumer demands.

Duane Stanford at Beverage Digest, who tracks national sales, says sales of carbonated soft drinks fell for the 12th straight year, with Pepsi down 3% in 2016. Coca Cola was down a little less than a point.  Coke, Diet Coke, Pepsi, and Diet Pepsi were all losing share, although side note, Fanta and Sprite sales are up.

The CDC also said in a recent report that between 2007–2015, daily soda consumption among U.S. high school students decreased significantly from 33.8% to 20.4%, more than 13 points.

At least right now, based on all of these sources, a direct connection between job loss and soda taxes cannot be VERIFIED.

None of this data really speaks to the issue of whether a tax helps combat child obesity or how the government spends money, which are other arguments that have been made in Seattle.
 

 

© 2017 KING-TV


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