Government employees

Liquor Privatization Would Save Money and Improve Service, but It Also Would Eliminate Unnecessary Government Jobs. What to Do?

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Dominic Pileggi, majority leader of the Pennsylvania Senate, says privatizing the state's liquor stores has "moved up to the top of the agenda" now that Pennsylvania will have a Republican governor as well as a GOP-controlled legislature. The New York Times notes that incoming Gov. Tom Corbett (currently attorney general) "must consider both a budget gap that could run as high as $5 billion and his campaign pledge not to raise taxes." Getting the state out of the booze business, the Times says, "would potentially bring $2 billion for state coffers, but also layoffs of several thousand state workers."

Allow me to question that but. The Times warns that Pennsylvania's privatization plans are "endangering the jobs of thousands of state workers." But if you believe states should not participate in, let alone monopolize, profit-making businesses, the fact that privatization reduces the public payroll while saving on operating expenses and improving customer service hardly counts as a disadvantage. Private businesses that sell wine and liquor do employ people, by the way. But even if they were operated by robots, how seriously can we take the argument that unnecessary government jobs should not be eliminated because then there will be fewer unnecessary government jobs? And if Corbett decided to preserve the state stores and cover the deficit by raising taxes, wouldn't that decision also have an impact on employment? Or is it only government-directed money that creates jobs?

As I noted in August, privatization advocates also have been known to argue, with a logic familiar to fans and foes of President Obama's stimulus package, that the business of distributing alcoholic beverages should be designed to maximize jobs—i.e., to be as inefficient as possible. More on Pennsylvania's liquor distribution system here. Reason coverage of liquor privatization in Virginia here.

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  1. Some of those opposed to privatizing Virginia’s ABC stores have said some really stupid things and made some pretty pathetic and disingenuous arguments against it.

    A Democrat state delegate stated that privatizing the ABC stores would lead to increased consumption among school-aged kids because there would be mom and pop liquor stores near schools, parks and ballfield where kids hang out.

    I sent him a note informing him that about 2 miles from my house, there is a Virginia ABC store directly across the street and within easy walking distance from an elementary school and a county park, which includes a ball field.

    I of course received no response whatsoever.

    What an idiot.

    1. He knows that 99.99999% of his constituents won’t bother to think about whether there’s an ABC store near their kids’ schools. Emotions trumps facts every day of the week.

      I could tell you about an exchange I had with my rep about real estate taxes that was really stupid.

      1. Please do.

        1. In the early 2000s as the value of my real estate skyrocketed, my taxes on said real estate also skyrocketed. I learned that many states (our neighbor Maryland among them) had constitutional amendments restricting how much local jurisdictions could raise assessed values year year. In Maryland it was capped at something like 3%, but don’t quote me. My local jurisdiction (Fairfax County) raised the assessed value of my place by over 200% in about 5 years.

          So I wrote to Kristen Amundsen, iterating to her that perhaps Virginia should join with Maryland and other states in creating a state law restricting assessed real estate values.

          I got a response regarding the “Transportation Bill”, to which I replied that my letter had nothing to do with transportation whatsoever.

          She responded back by saying that assessed values were up to the local jurisdictions. I replied that while the localities do the valuations themselves, the state had the capacity to restrict the localities in how much they could increase property values each year, and provided her with Maryland’s law.

          No response.

          1. To be honest, I dislike laws that cap how much assessed value can increase per year. They end up screwing newcomers, and they make it far easier for areas to adopt stupid growth-management schemes and otherwise restrict building, because long term owners get all the equity benefits of higher prices when they sell without having to pay the higher taxes.

            In the end, they’re reasonably related to rent control in effects.

            I mean, home prices in Fairfax County actually did go up that much. Would you have accepted that cap in assessed value if it were paired with a law forbidding you from selling the home for more than 3% per year more than you paid for it?

            1. “I mean, home prices in Fairfax County actually did go up that much. Would you have accepted that cap in assessed value if it were paired with a law forbidding you from selling the home for more than 3% per year more than you paid for it?”

              Of course not. Assessments can be politically driven, and are often arbitrary and completely decoupled from reality. But even if assessments were perfect, why should real estate taxes have anything to do with the assessed value of the home? Does an increase in the value of my property make it more expensive for the government to provide the same municipal services? It does not.

              “In the end, they’re reasonably related to rent control in effects.”

              Only if real estate taxes = rent, home owners = renters, and local governments = property owners.

    2. I live in Virginia, my son commented to me that the word among his friends was never try to use a fake id at a state liquor store. Personally I think state stores are a good idea discourage the consumption of hard liquor without prohibiting it.

      1. If that’s the case, then your son just didn’t know where to get a decent fake ID. And that’s assuming the ABC checkout clerk even cares beyond seeing a plastic rectangle waved under his nose.

        Trust me on this.

        Moreover, a private shopkeeper, concerned as he must necessarily be over potential loss of his license and thus his business, has far, far more incentive to check IDs than a state jobsworth who risks nothing more than a reprimand.

  2. I was stunned when the Washington state liquor deregulation failed. Stunned. But that was a direct prop vote, and though it barely failed, it failed.

    A lot of people like being controlled. They may say otherwise, but it’s the truth.

    1. Beat me to it. It’s at least the second time it’s been tried, and this time I really thought we had a shot at it.

      The arguments against privitization were lame. But people are just scared to do it here. It shook up too much establishment.

      1. It was to save teh chillens. Allow private liquor sales and every teenager in Washington would immediately get drunk and accidentally kill themselves.

        Luckily, thanks to the WSLCB there is no underage drinking in the state of Washington.

        1. Luckily, thanks to the WSLCB there is no underage drinking in the state of Washington.

          Damn, we need to get those people working murder cases.

      2. AIUI, the distributors and everybody else benefiting from the current system spent at least three times as much money as the other side complaining that Costco was funding the other side.

        In NC, the new GOP majority is also talking ABC privatization. You’re going to look pretty dumb in WA if PA, VA, and NC all get rid of ABC before you. Couple that with Dallas County easing up on beer and wine, and you won’t have much room to console yourself with the supposed social liberalism you get from the Dems continually winning.

        But hey, at least you voted down the income tax, because people rightly suspected that it wouldn’t stay just on “the rich” forever.

        1. Since when are Dem politicians socially liberal about anything other than sex?

          1. No politician is liberal on anything.

    2. People don’t like being controlled, that’s not the motivation . But they LOVE controlling others…

    3. Lots of ACORN imaginary voters turned out to keep Patty Murray in her seat, and I’m sure their imaginary votes supported State monopolism as well.

    4. The votes in WA in favor of eliminating ABC stores came from the liberal parts of the state. It was the conservative parts of the state that defeated the proposition.

      Facts – they are such stubborn things.

      1. Facts are fun. Let’s play.

        http://vote.wa.gov/elections/W…..untyCode;= &JurisdictionTypeID;=-2&RaceTypeCode=M&ViewMode=Results

      2. Team RED! Team BLUE!

  3. I may be wrong, but I believe that the reason that the efforts to “privatize” the PA liquor and wine stores have faltered in the past has more to do with the fact that the system is a huge cash cow for the state. While the state could gain a one-time cash influx from selling off the system, it would lose the stream of profits from operating the state stores. Perhaps someone who knows the economics of this could comment with more authority.

    1. I went to college in PA and that was my general understanding, though obviously they will use every appeal in the world to justify its perpetuation. I think that this was considered at times when they were in desperate need for short-term revenue.

    2. Whoever looks at the economics of it needs to look at it in total. No shuffling off unfunded liabilities like pensions for the retired liquor store workers. The entire cost of the operation from cradle to grave needs to be calculated. I’ll bet they lose money.

      1. I won’t take that bet…government manages to lose money on just about anything that an average Joe could make a killing on (logging rights, anyone?)

        1. The trick, from a politician’s POV, is to lose it to the right people. There are votes in that.

    3. Liquor is a huge cash cow for the state regardless of who owns the store. Alcohol taxes are practically free money. The state should be loving ridding itself of the overhead and still get like 80% of the income.

    4. It would take a long time to explain all the problems with the accounting used in that typical statement, along with the problem of assuming that state stores do just as good a job of fulfilling consumer desires and diversity as privatized stores.

      But to sum it up– if you really think that the state gets a huge cash cow from doing that, and that makes it a good idea, then you really should be in favor of the state nationalizing everything.

      The economics are flawed for the same reasons that socialism is flawed.

      People get upset when you call politicians socialist, but someone who genuinely believes both that it’s somehow more efficient economically and better for the state to run the business, and that that makes it a good idea, well, socialist is the right word for that.

    5. The Pennsylvania system will never die. There’s no way this bureacracy and the union will give in.

  4. If Privatized, no one in their right mind would hire these lazy bums.

    1. This. The register goons at the Monkey County liquor store nea rmy house are the most miserable SOBs I’ve ever dealt with.

  5. So the proliferation of a liquor/wine/beer market in PA wouldn’t raise revenue? These, after all, would be business paying taxes. And as they spring up around the state to meet the demand that people will have for beer, wine and liquor in one stop, what makes anti-privatization types think this won’t end up benefiting the state and its consumers in the long run? State store advocates and the LCB in PA will fight tooth and nail to keep their government monopoly. It needs to be broken up. New Jersey, for all of its problems, laughs at the dinosaurs in PA over this issue every day. I’ve lived in both states, and the NJ system is far superior (as is the selection!) in every way.

    1. Why can’t I pump my own gas in NJ? What the fuck?

      1. I never understood that myself. NJ and Oregon, last I checked, were the only two states in the country where you couldn’t pump your own gas.

        I will say, however, that when it’s freaking cold in the middle of winter, I like sitting in my warm car and rolling my window down 2″ to pass my money to the poor pump jockey who’s standing out there freezing his cojones off.

        We don’t get that luxury in VA.

        1. You don’t have full service stations in VA? I’ve personally ran into 3 of them in CT.

          And also,

          >freaking cold
          >VA

      2. And still gas in NJ is cheaper than in NY, CT, PA, and the rest of the Northeast.

        1. Which, incidentally, is the only reason they still have that inane law.

        2. Because refineries are there

        3. Which is, contra the other explanations, probably because New Jersey has only the 47th highest state gas tax in the nation at 14.5 cents/gallon. Taxes on everything else are very high, but gas is cheap.

          That’s actually probably not so great a tradeoff.

      3. Grew up in Eugene, Oregon. The propaganda was that it was to create jobs. A State where unemployment is always the issue, not pumping your own gas is seemed as a requisite to maintaining some semblance of an economy.

  6. Living where I do (TX) and vacationing frequently in in Louisiana, the arcane restrictions other states place on the sale of booze never fail to amaze me.

    1. Why do I have to put the 6 pack in my trunk in Dallas? What the fuck?

      1. Texas law requires that unsealed liquor be in the trunk or GLOVE BOX (LOL) so as not to be in the same compartment as teh driver.

        But sealed cans of beer should be fine in the seat next to you.

        1. Please explain sealed vs unsealed. Is unsealed the same as open container?

          1. Yes. IIRC from watching the floor debate in ’99 (as an intern in the TX House), unfunded mandates required the state to pass more stringent open container laws. Essentially any alcoholic beverage container that has ever been opened is a violation of the open container law if it is in the passenger compartment. If you re-corked a wine bottle and applied sealing wax, you could get around it, but otherwise its an open container.

    2. Me too, dude. Even fucktarded Kentucky doesn’t have government liquor stores.

      1. Same with NY. We suck in so many ways except this one. The only “blue law” is there are certain hours you can’t buy the stuff, and as far as I know there are no “dry” places or god forbid “public servants” in the liquor stores. All of those things seem alien – like no-one in their right mind would live in such a place.

        1. New York law specifically permits dry counties and townships and towns by a local option referendum. There are definitely some that are still at least semi-dry, with no taverns, no liquor. Some perhaps totally dry. (Applies to selling, not possession.)

          All dry towns in NY are in the western part of the state, near Rochester/Buffalo/Syracuse.

          New York also essentially bans chain liquor stores, by requiring the owner of the store to live within a certain distance of the store.

          1. I know, I was in Ithaca for 5 years, which is not dry, but has dry towns relatively near it, so it would be in the news when they’d have a referendum.

            I believe that New York abolished the statewide law about no beer sales on Sunday morning while I was there, but many counties and towns still preserve the law.

          2. Huh – I had no idea. There are 10 “dry towns”. None are actually near the cities, they’re all in very rural areas – which is probably why I never came across them.

            1. Well, Katonah, NY is dry (or was, last time I bothered to go there). It’s a small town not far north of White Plains.

              In an interesting twist, you can buy booze in one location in the town, where the store is (according to some local legend) is the former site of a Post Office, and hence ‘federal land’.

              Me? I think the right palms were greased, is all.

    3. Growing up in CT, I was always used to the blue law restrictions on alcohol (and there was no relief for it; RI and MA have the same type of restrictions, and NY was two hours away), but it’s all privatized. So encountering the WA state liquor stores and their charming employees and horrible selection was quite an eye-opener.

      1. Living on the other side of the state I used to have friends drive to Westchester to buy beer on Sunday.

        I, on the other hand, just buy a shitload of beer on Saturday.

      2. I grew up in Delaware, and the only way to get any alcohol there was to go to a liquor store. I was surprised when I went to western NY and you could buy beer in a gas station or supermarket till 2:30AM. That was awesome.

        Now I’m in CT, and there are certainly some annoyances. No buying alcohol after 9pm, no alcohol on Sunday, no alcohol on any holidays (stock up before the 4th or Superbowl Sunday). And I’m right in the middle of the state, so I’d have to drive at least an hour to buy alcohol from another state.

        But buying and drinking alcohol in a bar is just fine.

        Explain away that one, MADD.

    4. Living where I do – the Great State of Anheuser-Busch – it’s almost illegal not to drink.

      It’s wide open in Missouri…you can get alcohol just about anywhere and just about anytime.

      1. Your state’s laws intrigue me, and I’m interested in subscribing to their newsletter

      2. Yeah… to bad most of it are A-B products.

        Actually, the St. Louis area is accumulating quite the list of microbreweries/brewpubs, which is good for me because I’m down their on business fairly regularly.

        1. Wow, I can’t even get “to” and “too” right today. Fucking Mondays…

  7. A very shitty marketing campaign in which the store makes you angry in an effort to drive you to drink more.

    1. Those brilliant bastards. It works!

  8. That was directed at JW, except for my mobile device is an idiot.

    1. p’wned!!!11!!1

  9. Be aware of the roadblocks:

    1. Not being idiots, the PLCB has been improving its customer service over the years as a way of telling the public, “We’re just a harmless fluffy bunny; don’t kill us.” Pennsylvanians were thrilled that some liquor stores actually started staying open on Sun.

    2. The GOP now has 112-91 majority in the state House, which is the trouble spot (the Senate is 30-20 GOP). Those 91 Ds are all “no,” since it’s a union vote. But there are a few GOP members who may vote union, and some temperance conservatives. So the GOP can lose only 10 votes to get the 102 majority vote for privatization.

    1. Anyone who has to count on the Amish for votes this is an automatic no. When I covered PA politics I went to a talk by the Republican from Pittsburgh who proposed the idea. The Republican from Lancaster who was there seemed physically revolted at the idea.

      1. Goddamn fucking Amish. Temporarily forgot about them.

      2. As a resident of Lancaster, I feel I should point out that the Amish don’t vote. Old school Mennonites, however, are a different story.

  10. I have an idea. Privatize the liquor stores, but force the new owners to hire the old state employees. Everybody wins!

    1. nah, just hire illegal aliens and watch the political left consume itself.

    2. I’m pretty sure tax incentives to hire ex-PLCB employees is part of the legislation.

      1. With extra-generous benefits!

  11. Even if the state employees are unemployable, won’t the private businesses need to hire *SOMEBODY*? Thereby yielding no net change in employment?

    Are the pols too dumb to realize this, or are they somehow beholden to the government union workers who fund their campaigns?

    1. or are they somehow beholden to the government union workers who fund their campaigns?

      *touches nose with forefinger*

    2. The intersection of “employees who currently work in government liquor stores” and “useful people who could make it in a deregulated environment” is probably quite small. Maybe a null set.

      1. Possibly true, but I relish the thought of testing the hypothesis.

        It’s my theory that with sufficient motivation, some of them may actually be marginally effective.

        1. What about the lady at the DMV with freakishly long fingernails who can’t type because her fingernails get in the way? Could any use be found for her?

          1. Yo, whachooneed, saaaar?

      2. I doubt it’s a null set — I’d like to get a government job with the great pay, fixed hours, great benefits, generous holidays, guaranteed pension, etc, etc.

        And I’m sure I’m not the only one.

  12. I’m originally from Oklahoma. I was blown away by the fact that you could by wine in grocery stores when I went to VA. Then I found out the state owned the liquor stores. That was a disappointment, especially since wine selections in these stores were limited to only VA brands. I had to go to the grocery store to get anything else.

    I moved to Alabama and also found that the state owns many of the liquor stores. Weird.

    When I was out in Cali, I found it great you could buy hard liquor in the grocery store! For all its failures, they at least got that right!

    1. Go to BevMo. 🙂

    2. You should check out Louisiana. Store-brand gin, right in the drug store.

      Hey, it’s a drug.

      1. God Bless the Who Dat Nation and their love of drink and loose hot women.

    3. VA makes some damn fine wine. Damn fine. Barboursville and Horton foremost. But I’ve never seen wine in an ABC store here – only liquor and mixes.

  13. Aisles and aisles of beer and wine, but the cigarettes are behind the counter. It’s only a matter of time before they put the margarine, salt and bacon there.

    1. Ack! Don’t give them any ideas!

      1. And all the Little Debbie products, of course.

    2. True but there is a silver lining: Atleast people may become hot again. Go to the mall, holy shit people are fat.

  14. Naturally. That’s a controlled substance, like pork rinds.

    1. Pork rinds are awesome. A whole bag weighs about half an ounce. Smoke-flavored air for $2. It’s the perfect crime.

      1. Somewhere, there’s a government bureaucrat who wants to save you from the dangerous smoke-flavored (or, possibly BBQ-flavored) crunchy porkariffic air.

        He (or she) must be stopped.

        1. And somewhere there’s another government drone who wants to promote pork consumption, and is going to sell pork rinds as a healthy alternative to potato chips because, hey, no net carbs, being that there’s no carbs.

          The pork rinds people were kind of blindsided when suddenly they were “healthy” but they decided to roll with it. Kind of like what happened to the Phillies Blunt people.

  15. how seriously can we take the argument that unnecessary government jobs should not be eliminated because then there will be fewer unnecessary government jobs?

    “unnecessary government jobs” — first and second words make a redundancy; second and third words make an oxymoron.

    1. The make-work fallacy is so common its absurd. Creating efficiency allows more people to be employed at higher wages, creating inefficiency creates “jobs” in the micro but overall it makes everything suckier for everyone.

  16. Jacob, I have to say you missed one leftist argument against privatization you could have beat them up with: capitalism is wasteful. In a capitalist society, you have dozens of stores all selling the same product while in a government control industry, you’d have one store for all residents, saving real estate, construction costs, inventories, employees, etc, etc.

    1. Wonderfully efficient! Then we can combine that with the Broken Window Fallacy: why break a window here & there, when you can just break the same one over and over and over and over… soon, we’ll all be rich!

    2. Are you reading “The Man in the High Castle” too right now?

    3. Yes, pretty much the entire anti-privatization argument boils down to:

      Socialism is more efficient, and good.

    4. The make-work fallacy rears its ugly head again.

  17. If makework jobs is your goal, why not propose a government-run liquor store on every street corner in the state? Construction jobs, renovation jobs, HVAC jobs, delivery jobs, clerking jobs… the list goes on and on.

  18. As a resident of PA, I really sorely hope that privatization comes about. The liquor prices here are the highest I’ve seen in any state. Those with time and the ability to buy in bulk buy in a different state. The workers in the state stores are surly, make $20/hour with no education and know less about booze than I do at the ripe old age of 23. The only semi-decent selection is in the “Premium Collection” stores, located in expensive areas of the city (thankfully I live near one).

    We even have an asinine wine selection that changes sporadically called “chairman’s selection”, which the PLCB chairman decides are good wines and sells them at a “discount”. It leads to all sorts of jokes about The Chairman (Mao) choosing what is best for His people.

    If they go, I’ll throw a party.

  19. What you might not know is that the state is rolling out wine kiosks that will sell you a bottle of wine in malls.

    http://www.pennlive.com/midsta…..ll_be.html

    These don’t create any jobs, either.

  20. Like Joe Biden once said, “it’s all about a 3-letter word: J-O-B-S, Jobs.” Meaning: union jobs. PLCB is unionized. Some private retailers (at a minimum, the mom/pop stores) won’t be.

  21. Add NC to the mix.

  22. But even if they were operated by robots, how seriously can we take the argument that unnecessary government jobs should not be eliminated because then there will be fewer unnecessary government jobs? And if Corbett decided to preserve the state stores and cover the deficit by raising taxes, wouldn’t that decision also have an impact on employment? Or is it only government-directed money that creates jobs?

    Stop asking questions liberals can’t answer honestly.

  23. By the way, will this PA initiative address the need to buy beer at beer distributors?

    I can’t believe you have to go to these places to buy beer…

    1. Oh, that’s just for a case of beer. You walk in and tell the nice man what you want and he retrieves it for you. Sometimes you can browse the selection, often not. If you’re lucky, it’s chilled.

      You can’t buy anything smaller than a case at a distributor. You can buy up to 3 six-packs (or one 12-pack) at a neighborhood deli/six pack shop/pizza joint, and you have to call around to price the selection since it can vary wildly and be outright robbery at some places. Micro-brewers sell in “growlers”, 1/2 gallon jugs they use to somehow skirt the laws.

      So there are four separate places where you can get alcohol but none of them stock the type or quantity of the other two, they all hold different hours and are not ever located in a convenient location like a Costco or a grocery store.

      In Indiana, if you park and go into a liquor store, you cannot have anyone in your car under the age of 21 or you could be arrested.

  24. I must say, this is one of the great advantages of living in a state like Texas. When I was in college, I did a brief internship in Washington State, and I was literally shocked to learn that the liquor stores were owned by the government. I had never heard of such a thing before! There are no state-owned liquor stores in Texas, and I can’t really think of anything that is directly comparable happening here.

    Why would the government be in the business of selling booze? I can honestly say that I have never yet heard a convincing reason.

    Of course, to be fair, the Tx state government has recently gotten into the business of giving consumers money to purchase certain energy-efficient appliances, so I guess we’re not all that perfect, after all.

  25. Also, I fully expect someone to sue if the PA legislature had the stones to go along with the privitization…

  26. Here in Bama, all liquor goes through the Alcoholic Beverage Control board, who taxes 30% straight off the top. One of the legislators who wanted to privatize it all was appointed Chief Administrator. Of course he changed his mind. http://blog.al.com/wire/2011/0…..holic.html

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