The beverage tax that went into effect in Philadelphia on Jan. 1 caused prices to skyrocket on consumers, and now we’re hearing about the negative impact the tax is having on local small businesses and their employees.
The Las Vegas Review-Journal reports that Philadelphia storeowners are seeing not only a drop in sales of beverages but also reductions in everything they sell because customers are doing more than just beverage shopping outside the city.
Jeff Brown, CEO of Brown’s Super Stores, which manages six ShopRite stores in Philadelphia, said he has been forced to eliminate 280 jobs and may have to lay off even more workers in the coming months because of a drop in sales caused by the beverage tax. And not just sales of beverages. Brown estimates his stores have suffered a 15 percent drop in overall sales since the tax took effect.
“People didn’t change what they drink,” Brown said. “They changed where they’re buying it.”
And he’s right. In counties outside the city lines, store sales are up.
Just two months into the tax and the job losses are piling up for Philadelphians. And as other cities toy with the idea of a discriminatory tax on beverages, it’s important for voters and legislators to understand the impact of raising prices so high on one product. It hurts jobs and the economy.