How The Tobacco Industry Negatively Impacts Our Economy

July 2, 2021

You Pay, Whether You Smoke or Not

We all know how costly smoking is to the smoker. A $5 pack-a-day habit costs a smoker nearly $2,000 a year. That’s enough for rent for several months or a down payment on a new car! But what about the cost to businesses and our health care system?

Businesses lose money due to smokers missing work more frequently for illness than other workers; they may also pay more for employee health care insurance to cover smokers. In one year, productivity losses in California for early death or illness due to smoking were estimated to be $8.5 billion.1

In 2004, smoking is estimated to have cost California $9.6 billion in health care expenditures, and of this, the state spent $2.9 billion on Medicaid/Medi-Cal.1 2 3

Environmental clean-up costs due to tobacco are also estimated to be significant. According to the California Department of Transportation, cigarette waste is a major contributor to storm drain trash. California public agencies, and ultimately taxpayers, spend over $41 million annually on litter cleanup, of which cigarette butts account for one-third.4 5

Tobacco control programs not only reduce smoking, but also reduce costs. In the past 20 years, California has saved $86 billion in health care costs due to fewer Californians using tobacco.6

References renameme

  1. Smoking-Attributable Mortality, Morbidity, and Economic Costs (SAMMEC).
  2. Campaign for Tobacco-Free Kids. State Costs Caused by Smoking. Washington, DC: July 15, 2009.
  3. California Department of Public Health. Tobacco Control Program. Fact Sheet: Health and Economic Consequences.
  4. Lippner, G., Johnston, J., Combs, S., Walter, K., and Marx, D. Results of the CalTrans Litter Management Pilot Study, 2001.
  5. California Department of Transportation. Don't Trash California. Frequently Asked Questions.
  6. Lightwood, JM. Dinno, A. Glantz, SA. Effect of the California Tobacco Control Program on Personal Health Care Expenditures, 2008. PLoS Med 5(8): e178.