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Bottle-Recycling Laws Help Raise Income for Poor People, Occidental Research Finds

 

 She found that state bottle-recycling laws augment the yearly income of low-income people by as much as 9 percent, especially those from primarily Spanish-speaking households.

Ashenmiller's paper, "The Effect of Bottle Laws on Income: New Empirical Results," is the first to examine the economic impact of bottle-recycling laws, as well as the sociodemographics of who recycles and how it affects their income. Her research was printed in the May issue of American Economic Review [link to paper]. Bottle-recycling laws exist in 11 states: California, Connecticut, Delaware, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, and Oregon.

"While the overall effect of the deposit refund for many income levels may be very small, for the people falling into the lowest income bracket, it is quite meaningful," she said. "If states set their bottle deposit high enough, harvesting recyclables becomes viable employment for low-income households."

The Occidental professor, who specializes in environmental economics, surveyed 650 people returning bottles and cans for cash at five redemption centers in and around Santa Barbara, Calif. The data, which was collected over one month, was then weighted to approximate the total number of people who recycle for cash in the state.

Ashenmiller found that households with an annual income under $10,000 earn an additional $340 a year by recycling for cash. That number rises for Spanish-speaking low-income households--they earn $428 a year by recycling for cash. Assuming that the average income for these low-income workers is $5,000, Ashenmiller reasoned, then $428 represents an 8.6 percent raise in yearly income.

The economist's research also shows that Spanish-speaking residents recycle more than twice as much as their neighbors: While 12 percent of households with a yearly income below $10,000 recycle for cash, 26 percent of Spanish-speaking households with the same income do so.

Bottle-recycling laws were first introduced in 1971 by then-Oregon Gov. Thomas Lawson McCall. They were originally designed to reduce littering. Today, bottle laws help cut waste by tying cash to recycling: Under a deposit-refund strategy, the consumer pays a deposit, essentially a disposal fee, at the cash register. When consumers return their bottles and cans, they get their fee back.

Waste disposal is an increasing environmental concern, Ashenmiller said, as the cost of waste disposal is rising as space for landfills becomes more scarce. The Occidental professor is working on research that examines how policymakers can most efficiently use bottle laws, in conjunction with curbside recycling programs, as part of their waste-reduction management strategies.

"As an environmental economist the question I ask is, what is the least costly way of reducing waste?" Ashenmiller said. "In my research, I find that bottle laws both increase recycling and create jobs."