Tobacco’s Importance to Economy Is Disputed

Six major tobacco-growing states would lose jobs if Americans stopped smoking, but the nation as a whole would gain thousands of new jobs, according to a study that contradicts claims by tobacco companies.

The study, to be published today in the Journal of the American Medical Assn., found that the states where tobacco is grown and cigarettes are manufactured would have lost about 303,000 jobs if the United States had stopped all spending on cigarettes in 1993.

But the authors of the study said Americans would have spent money previously earmarked for cigarettes on other job-creating goods.

The study projects that the number of jobs eliminated in the tobacco states would be about 222,000 by 2000, but that jobs gained in the rest of the country would more than offset the losses in North Carolina, Kentucky, South Carolina, Virginia, Tennessee and Georgia.

“If tobacco sales were eliminated in 1993, the economy would have an estimated 133,000 more jobs in the year 2000,” according to the study released Tuesday.

The tobacco industry has said the nation would see a net loss of jobs if the Food and Drug Administration imposed restrictions to discourage smoking or eliminate tobacco use altogether.

But the study’s lead author, Kenneth E. Warner, an economist and health policy professor at the University of Michigan, said that argument is based on the flawed economic idea that money not spent on tobacco would not be spent at all.

Instead, Warner and his associates said, “when people stop spending money on one thing, the money does not simply disappear; it is spent elsewhere.”

For example, the researchers said that about half the tobacco dollars spent by consumers in Michigan, a non-tobacco-producing state, are exported to the six states where 93% of U.S. tobacco is grown and processed. If nothing were spent on tobacco in Michigan, the study said, the money would instead go to savings or to goods and services generated within Michigan.

“As a consequence, a higher percentage of the dollars would be recycled within the state’s economy, thereby generating greater local economic activity than the expenditures on tobacco,” the study says.

Walker Merryman of the Tobacco Institute, which speaks for the industry, would not specifically address what Warner called the flaw in the tobacco industry’s talk about job losses.

“Economic theory is fine for Ken Warner, but when it comes down to groups of people who are in a position to lose their jobs, I operate in the real world, not in some economic ivory tower,” Merryman said.

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