Smokers earn 18% less, spend less on education

Employees who smoke earn 17.5 percent less than their colleagues who don’t light up, according to a new US study.

And in South Africa, households that buy tobacco typically spend less on education and food and more on alcohol.

On average, US smokers earn an annual income of R266 000 (US$27 248), while non-smokers make about R330 100 (US$33 820), said Melinda Pitts, an economist at the Federal Reserve Bank of Atlanta and co-author of the report.

But it’s not all bad news for smokers. Pitts and economist Julie Hotchkiss studied the relationship between smoking and wages using data from employees in the United States collected between 1992 and 2011. They found people who had quit smoking for at least a year not only saved money on cigarettes, but earned higher wages than smokers and people who had never smoked.

People who had never smoked earned about five percent less than the hourly wages of former smokers, while smokers earned just 80 percent of the non-smokers’ wages. “It takes a special person to quit an addictive behaviour, and there is a higher reward for smoking cessation than not ever starting it,” said Pitts.

“I think the qualities of persistence, patience and everything else that goes along with being able to quit are valuable to employers,” Pitts wrote in the study.

Although similar research has not been conducted in South Africa, research here has identified some stark differences between spending behaviour in smoking versus non-smoking households.

“Unpublished research done at the University of Cape Town (UCT) has found that households that buy tobacco typically spend less money on education and food, and often spend more money on alcohol, relative to households that do not buy tobacco,” said UCT’s  Professor Corné van Walbeeck.

“This implies that smokers tend to place a higher value on current ‘pleasure’ (as seen by their expenditure on alcohol and tobacco), while non-smokers place a higher value on the future (as seen by their greater expenditure on education).

“There could also be a poverty cycle associated with smoking,” Van Walbeeck added. “Smoking households spend less money on their children’s education, reducing the children’s lifetime earnings. People with less education are more likely to smoke, and thus the combination of less education, lower earnings and higher smoking prevalence continues into future generations,” he said.

Patterns of smoking prevalence in South Africa are rather different than in the US and other high-income countries.

“In those countries, smoking is more prevalent among the poor and the less educated, but in South Africa smoking is much lower among the very poor than among the more affluent parts of society. This is true for both smoking prevalence (whether a person smokes or not) and smoking intensity (how much a person smokes),” said Van Walbeeck.

“In the past 20 years the rapid increases in the price of cigarettes has resulted in a substantial decrease in the number of smokers and especially in the number of poor smokers. These increases in the price of cigarettes have been driven by both an increase in the excise tax and the net-of-tax price. The tobacco industry has used the increase in the excise tax as a smokescreen and mechanism to raise the retail price by more than the increase in the excise tax, in order to maintain and even increase their profitability,” he said. – Health-e News Service.

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