Tobacco Documents Online

I StIO vBrook Department of Commti¢nity and Preventire Medlicine School of Medicinr Health Sciences Center State Uhinersity of New York at Stony Brook Stony Brook„NY' 1!1794 telephone: (516) 4"-219b , WRITTENITESTIMONY OF PROFESSOR MARVIN ML KRISTEIN, Ph.D. OEPARTMENTS•OF'ECONO'MICS AND1CpMMUNITY AND PREVENTIVE MEDICINE STATE UNIVERSITY OF NEW YORK' AT STONY B!ROOK,, NEW Y0'RIK' SUBCOMMITTEE ON CIVIL SERVICE, POST OFFICE, AND GENERAL SERVICES COMMITTEE ON GOVERNMENTAL AFFA'IRS UNITED STATES SENATE HEARING ON S. 1440, TO RESTRICT SMOKING TO'DESI'GNATEA AREAS IN A'LL U:S. GOVERNMENT BUIILDINGS'. SEPTEMBER 30', 1985 M-1

The following views reflect my many years of work on the economics of'smoking, a topic for which I am internationally recognized as an authority. Please see the appendix attached for copies of my articles. The basic outline of my comments involves three parts: first, a conceptual framework needed for a relevant economic analysis of the policy of' prohibiting smoking in certain public places; second; a criticism of Dr. Tollison's remarks, based on a proper conceptual framework; and third, an estimate of'the probable net savings likely to be enjoyed by the United States Government from a policy of'restraiNrg smoking in Government buildings. The key error in economic analyses of smokinS, usually sponsored by the tobacco incustry involves viewing, smoking merely as a freely ehosen~ eonsumer activity which i many people enjoy, like chew3ng gum or, eating candy bars. Following this error, one may speak of smokers' rights vs. tion-smakers' rights, the utility value of smokimg, the. economic value of the tobacco_industry, etc. A proper conceptual view is to begin with the recognitiion that smoking has been the cause of a major epidemic. Smoking is an addiction which unfortunates acquire at an early impressionable age. Most smokers state that they, wish they, coaild stop. Almost half'of all smokers have quit in the past 20-25 years. Smoking, greatly' increases the risks of serious and eostly consequences fpr the individual later in life. In addition, unlike gum chewing and i candy, bars ~ smoking also involves serious negative,impacts on the health and functioning of nearby nonrsmokerss plus heavy costs to the society. Society has a right and an obligation to restrict the individual's ~right to harm others and to impose available eosts on society by unwise andJor careless behavior. We have laws about littering, pollution, suicide, redcless and dangerous driving, etc. Smoking involves all these aspects and more. The rise of cigarette smoking ih the United States since the first World' War has produced a massive epidemie of illness, suffering, and premature death, involving, many terns of'billions of dollars in annual losses to our, society and to the United Statess r i M'-2

Government. Almost as many Americans are killed annually today due in large part to the rise of the cigarette smoking habit as were killed in all our wars in the 20th Century. The epidemiological evidence on~ the adverse effects of smoking on non- smoking others nearby has led our Surgeon General to suggest that smoking parents may be guilty of child abuse.l Given the weight of evidence and knowledge as to smoking available today, to assert one's right to smoke wherever and whenever one~pleases is virtually eqpi valent to asserting one's right to be a drunken, driirer. Professor Tollison's remarks and analyses are based'on the conceptual mistake of the rights of smokers.plus al one-balf billion dolliar annual' implemenrtintion cost figure which is derivedlfrom fantasy and the standard obstructionist claims of'the Tobacco Institute. The truth is that:.(1) emplbyers have the right to restrict smoking in their workplaces; (2) with a properly devised program (for which we have numbers of examples from, American companies andlstate and local governments), avoidance of confrontation, and good sense, the United States Government in several years will be enjoying a gain in real dollars of hundreds of millions of dollars per year as a result of S.1440. The tobacco industry always emphasizes the difficulties and complexities of impllementatlion by taking, an extreme adversary point of view. The truth, is that the vast majority of smokers want to quit and do not voluntarily wish to harm non-smokers. Since less than one-thirdlof our adult population smokes, more and more smokers ask whether they may smoke !in ifront of you. The law wi12' be largely selfrenforcing, as has been seen at a number of companies. 1 One should not be misliedlby medical research reports which say that the direct causel relationship between passive smoking and cancers and cardiovarcular diseases in N otherwise headlthy persons needs further study. This does not say that passive smoking ~ has no significant adverse health and funetioning i'mpaets onirnost non-smokers. N However, we know that passive smoking reduces breathing capacity, increases the rate of ~ respiratory problems and diseases, reduces produetivity, andlinereases the nicotine content of the blood stream6 ~ ~ •- ~ ~. ~ ~ M-3

The premise of the law as to smoking being & form of pollUtiominvolving external diseconomies of substantial size is not at aII faulty. Professor Tollison's comments in this area simply ig!nore the research on the costs to employers of empl oyinQ smokers vs. eqµiiral+ent non-smoiters. More and more businesses are acting, on forbidding smoking in the workplace and the data on their savings is growing. The recent rise of a non-smoking hotel has provided'comparable dollar figures on maintenance and fire los:ses. No one wishes to punish or penalize smoJcers; one simply wishes to restrain the extent to which they harm Innocent others (while, of course, doing great harm to themselves) ~ by restricting a destructive and anti-social activity. This seeks to help smokers. The productivity losses that Profenor Tollfson says will follow from SaNI0 are really, In part, theproductivity'losses'presently being suffered by the United Statet. Government because It employs smokers. Smoking', breaks are probably more frequent andilotger at one's work station and are as non-productive as they would be with limited smoking areas. To these losses, we must add the adverse effects on, non-smokers (two non-+mokers to every smoker) and i the whole, range of 'pollution, cleaning, and fire-risk and accident costs. In fact, the tobacco industry's opposition to 511440 only makes sense if' they fear that restricting smoking locations will reduce cigarette consumption and i encourage smokers to quit. Their very opQosiltioir supports the view tfiat' 5.1440 will leiad i to savings due to reduced smoking. Properly, restidcft smoking in the workplace increa ses p!2ductivity by reducing losses due to smokers. (1'liease see artieles in appendix) No smoking signs cost little;, putting them up takes a few minutes. Getting people to cooperate in helping the United States Government save money is a matter of good supervision and leadership. Restricting smoking in major public places is exactly, where it is most important to emphasize that smoking is not only self-destructive but anti-socfa,l. It does nott discriminate against clerks and receptionists (implying, discriUninat'icn mostQy against M-4

women). Those who are concerned with fairness In this regard should recalIli that 198'55 marks the year in which female lung cancer mortality rates surpass breast cancer mortality rates. To: use an assumed short run perfiect-market-functioning,economic theory to assert that smokers bear the full costs of, their own behavior, especially im umlic employment, is misleading and,,in1 this context, an example of the misuse of professional competence. Even private eompanies, which are rapidly adopting no-smoking in the workplace programs, do not believe this theory relevant for the private sector. We may turni to srelli-known published data to estimatie the potential shorter-run. (one to three year period) savings likely tolbe enjoyed by the Unitled S'tntes Government from the impiementation of S:1440. These involve only , the areas of prodUctivity, absenteeism, fire losses, accident-based losses, and'passive smoker, eosts. I will use Professor Tollison's figures on government employees.and proportion of smokers. My other cost estimates reflect bare-bones numbers, limited to the costs directly borne by the employer, and'. appropriate for the poorest business. I' prefer underestimaties., Thus, Professor Tollisoa says that there are 356,989 smoking government employees, or approximately one-third of i'ts labor force. Im mid-1985 dollars, based'on my 1983 article, we estimate that the average smoking employee costs his employer i'S50z per year in excess shorter-run costs as compared I to employing & similar non-smoker. If one were to add longer-run (largely health and premature disability and premature death)) costs, which would take three ! to ten years to impact, the totali smoker cost to the employer would be at least =1,1i00 per year per average smoker. Assurning,a 100% succes% in three years, the United States Government would be enjoying an annual savings of almost ;200millionr. Remember, these are understated figurm Even a 50% compliance would ~ save S 100 millions a year. To conclude. S.144i0 recogtoizes the new research and realities regarding, smoking today. It represents a lbudable attempt on, the part of the United States Government to M-5

protect and help its cdtiaens deai with a testible epidemic and'to save money at the same time. M-fi'