Plastic Bag Bans Hurt Economy?

Plastic Bag Bans Hurt Economy?

Aug. 20, 2012, (PBBR) - Does plastic bag bans hurt the area's economy?  In January, 2010, Washington, D.C. instituted a five cent fee on plastic bags provided by retailers at check-out. Los Angeles County, California passed legislation banning single-use plastic bags on Nov. 16, 2010.

What economic effect did those two pieces of legislation have on their respective areas? Does plastic bag bans cause job losses? Does plastic bag bans cause sales to decrease at area retailers? For the answers, we researched two economic impact studies produced by two prestigious and highly respected organizations, the National Center for Policy Analysis and the Beacon Hill Institute at Suffolk University.

Los Angeles County, California
The first phase of the L.A. County ban became effective on July 1st, 2011 which affected only large retailers and supermarkets. The second phase went into force on July 1st, 2012 for the remainder of smaller food stores.

The ban only affects unincorporated areas of the county. This means no cities or towns within the county are affected. Municipalities must pass their own bans.

The National Center for Policy Analysis(NCPA) conducted a survey of store managers in both areas of L.A. County, incorporated and unincorporated, regarding the plastic bag ban. NCPA just released the results of that study.

Bad for Business
The survey sought to identify the following:

  • Would retail sales be affected
  • Would employment be affected
  • Would  shoppers change their shopping habits

The survey results showed that of the retailers responding in the ban-affected areas:

  • 80% realized a -5.7% decrease in sales
  • Employment was reduced by over 10%

Merchants in the incorporated areas of the county (not affected by the ban) reported:

  • 60% of retailers saw a 9% increase in sales
  • Employment increased by 2.4%

Other Effects of Plastic Bag Bans
The in-depth study also examines the economic, environmental and health effects of plastic bag bans and analyzes their potential costs and benefits. The survey and study can be viewed in its entirety at the website of the National Center for Policy Analysis.

Washington, D.C.
In January, 2010, Washington, D.C. instituted a five cent fee on plastic bags that was passed in June, 2009 known as the Anacostia River Clean-Up and Protection Act. It is commonly called the "Bag Tax".

The study reports that in calendar year 2010, only $2 million dollars was collected from the bag fee when the city had projected to collect over $3 million. This indicates that shoppers (1) cut back on their use of plastic bags or (2) sought to avoid the fee altogether by bringing their own bag or (3) simply refused a bag at check-out.

The study states, "We find that the Bag Tax will have a negative impact on the local economy. All other things being equal, consumers will allocate a portion of their spending to the Bag Tax or divert spending outside D.C. to avoid the tax ─ both will reduce consumption spending in D.C. As a result, businesses along the entire retail supply chain experience a reduction in sales and profits and they, in turn, reduce their employment and investment expenditures. Lower levels of employment and investment reduce income from wages and capital investment."

The report also indicates that the plastic bag fee will cause a net job loss of 101 local jobs, thereby reducing D.C.'s income tax revenue. The job losses also create less disposable income which would have been spent with D.C. retailers, in turn causing sales decreases for local merchants.

The full report can be read by clicking DC Bag Study

Killing of Wildlife
Neither of these reports take into account how many marine animals, seabirds, and land animals are killed by plastic bags and plastic debris.

We will be publishing research and studies, as they become available, about the effects of plastic on animals.