By Alex Lloyd Gross
By the time the soda tax reaches it’s 100th day, it will have been responsible for costing over 400 people their jobs. According to a report in the Philadelphia Business Journal, Browns Supermarkets, which owns quite a few supermarkets both inside and outside the city, they will have to lay off a third of their work force and several other local beverage distributors have said they will have to shed some of their workforce as well.
The reason is simple. People are not shopping inside grocery stores located in the city. They are taking their business outside city limits. Those that live near Montgomery, Bucks and Delaware Counties are tasking their business there. A small percentage have even taken to doing their shopping in New Jersey. With an E-Z Pass, bridge tolls are $3.00 and gas is still cheaper as well. For them, it makes sense.
During a recent visit to Redners in Bensalem, they were getting a Coca Cola delivery. Normally, the delivery takes a few hours. This man , who did not want to be identified said “I,m here for five hours, two to three times a week. I cannot keep the shelves filled” When asked about his Philly stores, his reply was simple. ” I’m there for about an hour a week. People are not buying soda there”
The lay offs are just the tip of the iceberg. As stores take in fewer sales dollars,they will be unable to turn a profit. That means no wages will be increased and the stores could close. Mayor Kenney said that the soda tax was not meant to be passed to the consumer. Unfortunately, Kenney does not have a business degree. It’s simple. Any cost incurred by the manufacturer or distributor, will be passed to the consumer. 1.5 cents per ounce adds up quick.
Kenney mused during a tweet that “People are grumbling about paying an extra 25 cents for a soda, when the money is going to Pre-K.” Actually, it’s a bit more than that. The tax costs more than the soda and all of the money is not going to Pre-k. Meantime, the city is spending millions of dollars to litigate this issue in the Federal Courts. Money that could be used for other things, like Pre-k.
The workers laid off are primarily the bread winners of their families. This means an increase in federal subsidies ,such as welfare and SNAP benefits. They are not stock boys working after school. When people shop outside of the city, the city does not benefit from the extra 2 percent sales tax,either.