Tobacco Documents Online

EX.-!IEI i 4: JEFFREY E. HARRIS 0P.CE 1-0 American Heart Association AAAEPJCKkN 12L CANCER % SOGIEiY .~"f. AMERICAN LUNG ASSOCIATION® Coalition on Smoking OR Health TOBACCO. HEALTH AIND JOBS: <MN OVERVIEW OF ARTHUR ANDERSEN'S REVIEW OF THE TOBACCO INSTITUTE'S JOB LOSS ESTIMATES Arthur Andersen Economic Consulting has reviewed the Tobacco Institute's estimates of the number of jobs that would be lost if tobacco taxes were increased and found the estimate grossly inflated and unreliable. The actual number of jobs affected would be a small fraction of the number cited by the Tobacco Institute. The job loss estimates widely cited in the media are entirely the work of the Tobacco Institute. In making its estimates. the Tobacco Institute has mis-used data produced by Price Waterhouse, and created the false impression among many that Price Waterhouse itself has produced or concurred in the job loss estimates. This is not true. Arthur Andersen finds: o The number of jobs dependent on tobacco is far fewer thanihe 2.3 million claimed by the Tobacco Institute. Of that 2.3 million. only 11 percent. or 259.616. actually involve growing, warehousing, manufacturing, or wholesaling tobacco products. o Of the 2.3 million jobs claimed by the Tobacco Institute to be dependent on tobacco, 1.6 million -- more than two-thirds of the total -- are in sectors of the economy that have no relation at all to tobacco. o The Tobacco Institute's calculations fail to take into account thousands of tobacco sector jobs already lost because of actions of tobacco manufacturers even without a tax increase. o The Tobacco Institute's estimates are based on the false premise that money not spent on tobacco products because of a tax increase will disappear from the economy. This money will not disappear: it will be re-directed to other sectors of the economy, creating comparable employment and business opportunities outside the tobacco industrv. o The Tobacco Institute calculations fail to take into account the percentage of American tobacco that is exported. Tobacco exports will not be affected by a tax increase. o The Tobacco Institute does not account for major price reductions on cigarettes in the past few months. which would partially offset any price increases from tobacco taxes. o The Tobacco Institute measures the impact of a price increase using a formula inconsistent with research and experience in the U.S. and other countries. The actual decrease in tobacco use will be smaller. o Nowhere in either the Price Waterhouse or Tobacco Institute reports are the lost productivity and health care costs caused by tobacco consumption included. The government conservativelv estimates these costs at S68 billion per year.