The Stew BLOG

Successful Population Health Initiatives Must Address Negative Consequences

Katherine Wright, Associate Director, Stewardship Practice | 03/17/2017

On March 1—one week after my blog post on sugar-sweetened beverage (SSB) taxes—PepsiCo announced that it will be cutting 80 to 100 jobs due to Philadelphia’s 2016 soda tax, which passed in 2016. Dave DeCecco, company spokesperson, said that if the tax is removed the company will bring the jobs back.

While PepsiCo’s reaction to the tax appears to be an effort to maintain the status quo, let’s take the announcement at face value. As a result of the policy, fewer sugar-sweetened beverages are being sold, impacting the local economy. This is an important consequence we need to be aware of, and PepsiCo is not alone in bringing it to the public’s attention.

Local businesses are reporting consequences, too. An article in Business Insider said, “Operators of local supermarkets have reported significant drops in revenue, something executives say will result in their cutting of jobs in the near future and have already forced them to slash employees’ work hours.”

It would be tempting at this point to back down from the tax. But if we are truly committed to health transformation, then we must invest and spend differently, and in doing so we will not be able to avoid impacts on our local economies—both good and bad. It’s important not to shy away from doing things differently. Instead, leaders can proactively open a new dialogue with the community as they consider the best ways to address or avoid potential negative consequences like the elimination of jobs.

When multi-sector partnerships (MSPs) seek sustainable financing for population health in their regions, it’s inevitable that they’ll need to navigate community members’ cheers and fears about new proposals. Having these conversations about costs and benefits (whether they are real or perceived) will hopefully lead to wise design choices on the front end—choices that could potentially minimize the burden on stakeholders. Also, MSPs can use information learned during the conversations to frame a new public narrative around the positives associated with changing the status quo, even if there are short-term costs.

So what does this mean for Philadelphia, PepsiCo, and the local grocers? For one, the city could consider ways to minimize job losses while still leading the public to understand (and want!) the benefits of the new tax. Business Insider reports that PepsiCo has been “investing in less-sugary drink options that wouldn’t be subjected to the taxes…[and has been saying] an increasing percentage of [its] business comes from the sales of things like bottled water, healthy snacks, and tea—not soda.” Perhaps the city could offer a tax credit equal to the job losses, to retrain workers in support of these efforts and population health?

Mayor Jim Kenney is already touting the law’s benefits, working hard to shift the narrative from “the soda tax is killing jobs” to one that shows the soda tax has actually created jobs. With the revenues being used to expand access to pre-K for children, there are already 250 new jobs for teachers and support staff! What’s more, he is acknowledging that there’s been a 50 percent drop in beverage sales. He’s also wisely proclaiming that people are getting healthier since they’ve reduced their consumption—and the financial benefits of that have yet to be calculated. Kenney’s framing is helping to ease the transition to new ways of doing things.

Still, new questions emerge for communities interested in following Philadelphia’s lead:

  1. Are there other creative ways to frame soda tax revenue as a way to add opportunities for more, but different, jobs?
  2. As communities plan for the use of tax receipts, could they also estimate any potential burdens, and prepare transition plans that dedicate some of the revenues to help those who are harmed as their local economies move to a different but more healthy mix of spending and investments?
  3. What role should MSPs have in working with community members to address any negative consequences?

Whatever the answers, the wisest leaders of population health initiatives will make a genuine attempt to anticipate and address possible negative consequences. Soda taxes in particular can be a win-win, increasing revenue and population health at the same time, but only if leaders are ready to take on the hardest questions as they pursue change.

Let me know your thoughts below or find me on Twitter @kwrigh02