Running Head: SMOKING IN THE WORKPLACE
Smoking in The workplace
Introduction
After the passage of the laws banning smoking in New York’s bars and restaurants in July 2003, there has been wide range of economic impacts that been adversely affected by this ban (New York State Department of Health). Several reports and surveys report a significant decline in the number of clients going to the bars in the whole state. Similarly there has been drop in the revenues acquired by the bars and restaurants as well as massive job cuts. Statistically, 2000 jobs, $ 28.5 million wages and $ 37 million state product has dropped significantly. Moreover, other sectors of the economy related to the bars and restaurants have similarly been affected dealing in supply and services; loss of 700 jobs, $22 million earnings in labor and $ 35 million state product. Generally, the banning of smoking in bars and restaurants has resulted into poor economic afflictions to the businesses.
Direct Economic impact
Of keen consideration to the financial evaluation of the prohibition to smoke in the state of New York is the employment industry. While considering that the health or capability of the employment industry is measured using the revenue acquired from it, this type of information is not accessible at the local level so as to know the real effect of the ban at the lower level of the state (Hirasuna, March 2006). However, a keen evaluation of the employment was measured for the bars and restaurant industries that exist in the state of New York. The method that was applied to put into numbers the size of employed workers in the bars and restaurants was the regression analysis in relation to the income acquired, the industry price aspect as well as the variables that impact the implication of anti-smoking principles. These elements were applied to measure the state of New York.
The employment aspect for the bars and restaurant industry has portrayed a rigid number attribute. The price that is found at this industry as well as the sales volume of the drinks and food were noted to have declined. This is attributed to the limited number of people visiting the bars and restaurants opting to visit other places to acquire the same pleasure. People have now resulted to keep smoking at their homes or friends places evading breaking the law by visiting the industries. In relation, as people did smoke in the bars and restaurants, it acted as a good business to sell food and drinks as well as promote music and hotels. This has similarly noted a decline in the numbers as well as revenue acquired. This has forced most people to run out of business and jobs. The measured impact of price in the industries labor market and price elasticity of demand noted a – 1.9. According to economists, the bar and restaurant industry offers “normal” goods which react better to revenue.
The number of jobs lost as a result of the prohibition to smoke in New York is estimated using two elements of this sector of the employment projections. One of the elements is in the fixed deterioration using the prohibition factor to show what prevails in law. In the other forecast applies similar regression elements though the value is set to zero to simulate elimination of the rules against smoking. The contrast between the two estimates shows that about 2000 jobs were lost as a result of the laws.
The New York State Department of Labor estimates that the employment for every staff working in the industry is $ 14, 175 annually. The integration of the number of jobs lost with the amount of wages similarly lost which accrued to $30 million.
Indirect Economic Impacts
The indirect economic impacts are varied; the variation in the results of an industry has to acquire the prior variation in the dollar in spending by the clients. The other impact is the variation in what is acquired from the businesses required to acquire the precise requirements of a business. There is also the variation in the outcome of the industries to acquire the variation in the production stated prior (Ridgewood Economic Associates, May 12, 2004). These impacts offer the ground for interpreting the measured direct impacts of the affected industry in the whole economic variation.
The employment multiplier for the state of New York in relation to this industry is 1.33, which is interpreted to mean that for every employment created in the industry, the significant variation in employment for the state of New York is 1.33 employment chances. There is a narrow loss of over 2000 places of employment as a result of the smoke ban law meaning that a decline in the jobs estimated to be over 2700 in New York.
When looking at the local revenue for the state the earnings multiplier reads it to be 1.76 meaning that there is a drop of $ 1.76 for each dollar not acquired in this business. The forfeiture of wages in the industry would lead to an alteration in the wages acquired through labor. With a consideration of the indirect implications, there is a $37 million drop in the production which leads to a massive drop in its making estimated to be over $ 72 million.
Conclusion
The banning of smoking in the bars and restaurants in the state of New York as bough about drastic economic implications, this decline is read into a poor whole economic effect in the year 2003 of over $ 72 million in economic process, $50 million lost in earnings and removal of over 2700 employment sections in New York.
Bibliography
Ridgewood Economic Associates. (May 12, 2004). The Economic Impact of the New York State Smoking Ban on New York’s Bars. New York Nightlife Association.
Hirasuna, D. (March 2006). Review of Economic Studies on Smoking Bans in Bars and Restaurants. Review of Economic Studies on Smoking Bans in Bars and Restaurants.
New York State Department of Health: State of New York – Regulation of Smoking in Public and Work Places
