Exemptions and employment revisited

On Friday I wrote about a new study by Liz Klein of Ohio State University that found no impact on employment in restaurants and bars following the passage of smoking bans in Minnesota cities. While noting the study’s many limitations, I concluded that it was “interesting and credible.” In light of new information I have revised that evaluation downward.

My main criticism of the study was that it tracks changes only at the community level, missing potentially catastrophic impacts on individual businesses. At the time I thought this was an inherent limitation of the data. But as Michael McFadden (whose own site is here) noted in the comments, Klein could have easily made finer distinctions about the bans’ impact. Specifically, her data codes restaurants and freestanding bars separately, so if there was a differential effect on the two kinds of businesses it should be easy to spot. I posed the following question to Klein asking her why she didn’t include such an analysis in her paper:

A commenter on my blog alerted me to the fact that free-standing bars are coded separately from full-service restaurants in the NAICS data. Given that one would predict bars to suffer the brunt of any decline in business following a smoking ban, it would be of interest to see the data from bars separately rather than pooled together with restaurants. If no statistically significant decline appeared, it would make the conclusions of your study even stronger. On the other hand, if bar employment did decline, the change would be obscured by pooling the data with that from full-service restaurants. Why does your paper only publish the pooled data?

She responded:

Two reasons we looked at data on the overall hospitality industry. We were not interested in looking at bars only because we wanted to make the comparison for the overall hospitality industry, since a) a lot of restaurants derive a substantive portion of their profit from alcohol sales, and b) the policies apply to both. The other reason is more practical – at least one of our communities didn’t code free-standing bars, even though there were bars in that community. Although the coding scheme should be followed as such, the Department of Employment and Economic Development cannot force a community to use the North American Industrial Classification System codes 7224 instead of 7221.

Obviously there’s nothing she can do about the community that doesn’t use the coding, but that doesn’t mean there’s no worth in examining the data in communities that do or trying to expand the sample. I wrote to Klein again asking her if I could see the data. She directed me to the Minnesota DEED website where employment data is publicly available. However this site doesn’t include information about smoking policies, nor does her study reveal the names of the cities included, so there’s no way for me to replicate her data.

Fortunately, at least one previous study has examined the question in depth. Scott Adams (University of Wisconsin-Milwaukee) and Chad Cotti (now at University of Wisconsin Oshkosh) published a 2007 paper that uses data sources very similar to Klein’s and they took the effort to differentiate between bars and restaurants. I recommend reading the entire paper for the full results, but the basic finding is that comprehensive bans decrease bar employment by a little more than 4% while having a neutral or slightly positive effect on restaurant employment.

In the discussion section of the paper, Adams and Cotti explain why this effect is plausible:

Although bars and restaurants are similar industries, there are important reasons why smoking might matter differently to both. One might argue that a restaurant is primarily selling food, with drinks secondary, and environment or atmosphere of lesser concern. Clean air is more conducive to enjoying food, especially among non-smokers who may be more likely to come to a restaurant following a ban. Bars, on the other hand, sell environment and atmosphere first, with perhaps drinks second and food third. Given that a smoking ban fundamentally changes the environment of an establishment, the observed negative impact on drinking establishments is not surprising. Moreover, part of the bar environment is the fellow patrons, which in many cases attract customers to a particular drinking establishment. It is therefore possible that a smoking ban alters the environment for non-smokers, leading them to shy away from bars following a ban. […] The main point is that there are plausible explanations for the different impacts of smoking regulations on these similar industries.

Thus there are good reasons to be interested in the potential differential impact of smoking bans on bars and restaurants. To summarize with regard to Klein’s study:

1) Existing research based on similar data finds that differences do exist.

2) Her paper examines the question of whether partial bans have a smaller impact on employment than comprehensive bans, the relevant exemptions applying to freestanding bars.

3) Much of her data is conveniently already coded to differentiate between bars and restaurants.

4) A finding that there was no differential impact would strengthen her paper’s conclusion.

Given all of the above, her insistence that only data from bars and restaurants together are of interest simply makes no sense. She is saying, in effect, that this pooled information is more relevant than data exclusively about bars, even though the exemptions in question apply to bars only. The mind boggles to see the logic in this.

To take a broader review, there are several biases in Klein’s paper that should make one skeptical of the conclusion that communities needn’t worry about the economic impact of comprehensive smoking bans:

1) Existing research shows that bars and restaurants are affected differently, yet in her study the data are pooled.

2) Existing research shows that local bans are less harmful than bans imposed statewide, yet her study only examines local ordinances.

3) Her study examines relatively sticky employment numbers rather than data that more fluidly reflects market changes, such as total hours worked or business revenues.

4) The study period is one of economic growth in which bars are most likely able to withstand the shock of a smoking ban.

For all of those reasons, the applicability of her paper to public policy is very limited and other research that examines the differential impact on bars ought to be considered along with it. It also bears repeating that no study of community-level effects will account for individual smoking-oriented businesses that may suffer drastic drops in revenue even while the overall hospitality industry thrives; the rights of those business owners deserve protection.

Regardless of whether one supports or opposes smoking bans, I hope we can all agree that communities considering them should be informed by an unbiased, comprehensive understanding of how bans and exemptions will affect local businesses. They won’t find it looking at Klein’s study alone.


23 thoughts on “Exemptions and employment revisited”

  1. Just going by the title and abstract, it appears that these authors are focused on employment effects, not the effects on businesses. My guess is that if, behind closed doors, you asked the authors of the paper and the press accounts about this, their response may be: “we don’t care about businesses, we only care about workers!”

    This is obviously speculative on my part, but it seems to be in line with the way the study was undertaken. Sadly, many politicians probably agree with this line of thinking, but again can’t come right out and say it.

  2. Excellent column Jacob. And yes, the mind boggles at the seemingly total inability to get a straight answer sometimes. In their press release on this study Ms. Klein said, “We wanted to look at businesses most likely to be affected by this type of policy based on the smoking and drinking correlation” and then she blithely goes on to see no reason to look at bars on their own.

    Well, since the researchers seem to claim they need to keep their data secret (even though, oddly, it seems quite public on the DEED site) and just weren’t able (or decided not) to devote any resources to measuring the effects of bans on employment by the sector that everyone expects to be hit the hardest – the bars – I decided to do a little quick ‘n dirty research of my own.

    Looking at the DEED data for “alcoholic beverage drinking places” for the two cities which the researchers DID name, Minneapolis and St. Paul, it becomes clear why the antismoking paymasters behind the research, ClearWay, may not have wanted the data examined fairly. Both Minneapolis and St. Paul (representing about 2/3 of the total data)went from no bans in 2004 to partial/full bans in 2005 and 2006.

    So what do we see if we look at the DEED data for bars only in MN/STP?

    Combining the two cities and looking at the employee populations for each year as we moved from no bans to partial/full bans we see the following:

    2004: 3,591 workers

    2005: 3,374 workers

    2006: 3,209 workers.

    3591 …. 3374 … 3209

    A loss of 382 employees. Concurrent with the increases in smoking bans, these two major Minnesota cities lost almost ELEVEN PERCENT of their bar employee workforce. And God only knows how many of the workers that were left had their hours, tips, and pays cut.

    Do you know what the word “decimate” means? It means a disaster on the battlefield where you lose 10% of your forces. It would seem that if Ms. Klein had examined and presented the data fairly and openly she might have been forced to say that smoking bans DECIMATE the bar industry instead of saying “bars do not need to be exempted from clean indoor air policies to protect against severe economic effects.”

    Now you may understand more fully why I raise the question of ethics regarding this and other sorts of antismoking “research.” I will grant that my own research analysis of just those two cities may be far more primitive, and may possibly have significant weaknesses that could have been corrected by Klein’s more sophisticated approach, but given that the researchers appear to be unwilling to honestly examine and present the data for bars and their workers, it’s left to people like me to do what we can.

    And without getting buckets (wagonloads?) of cash from ClearWay to do it.

    btw… just how much DID ClearWay pay for these results? Do we know?

    Whooops! Never mind. I just looked it up.

    They got $516,568.00 for this.

    Wonder how much ClearWay will give me to show that smoking bans decimate the lives and livelihoods of bar employees? Hey, I’d be happy with HALF that amount! Whatcha think ClearWay? Wanna hire me?

    Didn’t think so.

    Michael J. McFadden
    Author of “Dissecting Antismokers’ Brains”

    Funding detail:
    { }

  3. ::sigh::

    As I was closing out my windows here, it occurred to me to read the details of that half million dollar grant. Remember my earlier speculations as to the real motivations for not separating bars? Check out these two lines in the grant proposal:

    “We believe that this research will provide public health officials and tobacco control advocates with information that can help shape adoption and implementation of CIA policies, and prevent their repeal.”


    “The proposed study … will contribute to MPAAT’s overall mission by providing information that enables adoption and successful implementation of policies to protect employees and the general public from secondhand smoke exposure.”

    So now we see what Elizabeth Klein meant but didn’t say when she responded to the question simply by saying lumping the two together was the “most appropriate” form of research.

    Yep. To produce biased research promoting a “misconception”, I’d say it was indeed the “most appropriate” approach.

    – MJM

  4. @Michael J. McFadden: Thanks for the numbers. Those certainly are suggestive and I’ll look into them further soon.

    The grant details are interesting too, but I think they say more about ClearWay’s motives than about Professor Klein’s. I expect it’s more likely that they funded Klein based on her past work and the likely outcome of her research rather than her changing her methods to meet their ends. I don’t doubt that she really thinks her decision to pool the data is appropriate; I do wish she were able to provide a better reason for why she did so.

    I wouldn’t count on you or I getting ClearWay funding anytime soon, alas!

  5. I asked Micheal Pakko, the Fed Economist about all the economic research that shows bans do not hurt business. His take was that there was very little research done by economist on this issue. Nearly all of it is done by health advocates and not trained economist. If you look at this study, her background does not include economics – simply put she is not an economist. I’m not sure I want an economist doing health research and a health researcher doing economics.

  6. @Tony Palazzolo: Agreed that economists have the comparative advantage on questions like these. It’s probably not surprising that Cotti and Adams are economists. Ultimately, though, studies’ methods need to stand on their own merits.

  7. Jacob – we are issuing a press release tomorrow about the flaws of this study (Opponents of Ohio Bans and Buckeye Liquor Permit Holders Assoc.).

    There are 2 other things that you might want to explore.
    1-the REASON this study was being done, as noted in the Abstract was:
    “due to the perception of negative economic effects on alcohol-licensed hospitality businesses, partial CIA policies (those that provide an exemption for freestanding bars) have been proposed as a means to reduce the risk of economic effects of comprehensive CIA policies applied to all worksites.” )
    PROPOSED EXEMPTIONS FOR FREESTANDING BARS and yet she includes restaurants?
    2-she factored in NO variables for compliance (or lack thereof) because she states compliance is high to smoking bans. In Ohio, year #2 of the ban brought 7,179 complaints and investigations. You call that HIGH COMPLIANCE?

    It’s obvious this study was DESIGNED to have the outcome it concluded. It was supposed to be about whether or not exemptions should be made for freestanding bars and it was anything but. Problem is the VAST media outlets that picked up this “study”. I’ll send you a link to our press release which will hit PRNewswire at 10:39 a.m. May 29, 2009.

  8. I just read Michael McFadden’s posts and I’m even MORE furious at what was written into the grant proposal!!! Talk about defining the outcomes BEFORE the study was done.

    Why are there no academic consequences for this kind of apparent fraud?

    President Obama recently was quoted about scientific integrity. There should be an investigation into this study, the funding, etc.

  9. I’ve said for years that just dealing with, or in, percentages is dangerous, you lose the real facts a lot of times, reading above I saw two numbers one was 11 the other 328, both are for the same thing, the number of people that no longer have a job, no longer have a paycheck to pay the rent or house payment, or food on the table or clothes on their back. And in times like this, recession/depression, one does not go right out and get a new job the next day. When the mind see’s a small number like 11 it thinks very small hardly worth noticing and passes over it, while the number 328 is a lot bigger and more likely to get ones attention. A number like 1.2% is very small indeed, hardly worth noting or caring about, but the real number behind it could be 100 or one million depending on the base used. There are over 330 million people in this country today, a lowly 1% is in fact still 3,300,000 people, 0.1% is still 330,000 people; see how it goes?
    From http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?series_id=LNS14000000

    It shows last year in April a mere 5.0% this year it’s 8.9% for April, but what’s the real numbers? They don’t say, just that they are all 16 or older, they don’t want to use the real number because it’s in the millions and that would really scare people, if the total was one third of the population 8.9% would be 9,790,000.
    I have wondered for years how different things would be if real numbers were used for everything and percentages were banned, especially from the news.

  10. Just a curiosity at this point, but Bill Hannagen – founder of Keep St Louis Free asked Cotti to put together a study for St Louis as a ban has been proposed. In St Louis – we have a very high smoking rate and bar employment according to him would take a 19.7% hit.

  11. My final Klein study comment was sitting all alone under Jacob’s May 29th blog entry so I thought I’d move it down here where it could be with friends… 🙂


    While the study itself admits that it was funded by Clearway, there seems to be absolutely no statement by the authors about competing interests. I believe this is most unusual in peer review journals, although it’s possible that Prevention Science doesn’t worry about such things.

    In any event, consider this: I, Michael J. Kumquat, get a position as a professor at a university, and submit a grant proposal to Philip Morris. In that grant proposal I write:

    ” …this research will provide tobacco manufacturers and tobacco lobbyists with information that can help shape adoption and implementation of smoking ban policies, and prevent their spread … The proposed study will contribute to PM’s overall mission by providing information that discourage the adoption and successful implementation of smoking bans….”

    Soooo…. If I got a half million dollars from Big Tobacco and put that study out there, and deliberately did NOT declare any competing interests, or even worse, signed my name to a “no competing interests” statement…

    What would the Ohio State University Community have to say about that?

    NOTE: You’ll note that this is EXACTLY the same as the grant proposal statement used by the researchers in funding the current study except for the obvious substitutions. {Google RC-2006-0047 for the grant details}

    Now… to be fair to these particular researchers, I’d like to note that this seemingly shameless breach of ethics is NOTHING NEW. This sort of thing, to lesser or greater extent, has been replicated almost everywhere in those “mountains of studies” that supposedly support the holy grail of universal smoking bans. See the discussion for example in the pages of the Public Library of Science (PLoS) at:


    Go to the article it brings up and read the “comments” to see a very strong attack on the “no competing interests” claims of another researcher well-known in the antismoking area. (1)

    These interests ARE competing, they ARE real, and they DO strongly determine the shape and outcomes of research: they are what have brought us to the current world of people going apoplectic over smoke creeping out of light sockets, actors smoking on stages, and widespread approval for 2,000% tax increases on folks so poor that they have to roll cigarettes out of shreds of tobacco and scraps of paper.

    These competing interests are real, very, very destructive… and almost totally unrecognized.

    Michael J. McFadden
    Author of “Dissecting Antismokers’ Brains”

    (1) If the long URL does not work, try going to:
    and enter “James M. Lightwood” in quotes into the search box.

  12. Many small, obscure, neighborhood bars ignore the ban. Unfortunatly, this information usually is not included in any financial statements. I still have to see a restaurant ignore the ban, except for employees before and after opening hours. People usually don’t stay long enough to make a difference. They probaly actually do better, due to higher turnover, and an increase in the number of “to go” orders called in.

  13. When are people gonna wake up to the fact that cigarette smoke is a non-starter except on the smoker. It’s the pollution coming out of factories and tailpipes. After all those pretty sunsets are created by smog not cigarette smoke. Use your brain as a place to process information not repeat it.

  14. Why do we want a more intrusive role for Government. Let the owner of the business decide what level of accommodation he wants to make to tobacco consumers. The people have a choice of where they want to frequent as they prefer. Everyone is accommodated. Why do people want Prohibition?

  15. Re: “News”

    People want Prohibition because there are almost no other outlets left for them to exercise their discriminatory hatreds while at the same time feeling virtuous – and yet the instinct itself is something the human race is unable to divest itself of.

  16. Another marker in minneapolis, saint paul and around the state is the loss to Musicians.
    Bookings are way down, Bar sales are down for the businesses still open. Smokers that go out to listen to a band spend time out on the “smoking deck” sipping on fewer drinks for fear of the New Administrative cops that wait to “spring the trap” on the .08BAC
    tripwire in minnesota where the state now collects legislatively passed “administrative fines” that go directly to the state and the DPS to pay administrative cop overtime pay.
    Minnesota night life is on life support while citizens that once lived in freedom are now driven into their homes and garages to “entertain” out of the grasp of the state police.
    Minnesota has become a very hostile state for citizens that smoke don’t wear seat belts, now a primary offence that allows the adm cop into your car.
    The fourth amendment jno longer applies in behavior modified Minnesota.

  17. What Ms klein did is the regular way to get around the facts. Ms Hahn did the same thing here in Ky. I believe everyone knows that bars always take the biggest hit when bans are passed. That has been a given for years and it is well known. That is one reason bars get the fines while few restaurants are fined. They are simply trying to save their businesses. Here in Louisville, a survey by WAVE-TV undercover, found that 9 out of 12 bars were ignoring the ban. It’s called survival.

  18. Michael J McFadden challenges Elizabeth Klein on her figures. Mr McFadden claims his figures show bar employment in the Twin Cities fell dramatically from 2004 to 2006 because of the smoking laws. Yet I was puzzled. Why was Mr McFadden limiting his figures to 2004 – 2006, when Ms Klein’s figures covered 2003 – 2006? After all, including 2003 figures is important to get a sense of underlying trends in bar employment levels before the smoking laws came into force.

    So I recalculated the figures for myself. It wasn’t hard. The totals I got from the same source as Mr McFadden used were very slightly different to his. But including the 2003 figures put a totally different complexion on his claims.

    2003: 3948 workers

    2004: 3590 workers (- 9.1%)

    2005: 3387 workers (- 5.7%)

    2006: 3215 workers (- 5.1%)

    And in case anyone thought the 2003 figures were a one year blip, think again. Bar worker numbers in 2003 were 9.8% lower than the 4,336 employees in 2002.

    In other words, bar employee numbers in the Twin Cities were already falling steeply long before the smoking laws came into force. When the smoking laws came into force in 2005, this drop in employee numbers actually began to stabilise.

    So take note, Michael J McFadden. Whatever has been “decimat[ing] the lives and livelihoods of bar employees” in the Twin Cities, it is most certainly NOT their smoking laws.

  19. Some very curious concerns by Mark. His comments link to an anecdotal list of business closures, with no evidence that these places would have stayed open had the smoking laws not been introduced. And how many new businesses opened in this time?

    Is Mark seriously suggesting that this article provides better evidence of the effects of smoking laws on restaurants and bars in Minnesota than the Klein study?

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