The case for leaving the state stores alone

As I looked through the study on privatizing liquor and wine sales in Pennsylvania that was released this week, a book Robert Reich published four years ago came to mind.

In Supercapitalism, Reich argued that modern capitalism has given us great rewards as consumers and investors, while punishing us as workers.

Stores like Walmart compete aggressively to drive down prices, so we get a great selection of goods and get them cheaper. But they also drive down labor costs, lowering living standards for their workers and those employed by their suppliers.

Companies competing for great quarterly earnings fatten your 401K retirement plans (if you’re lucky enough to have one), but at the cost of cutting corners on the environment, and again, aggressively driving down labor costs.

I thought of this as I considered the study on privatization. Like many people, I’ve generally liked the idea of doing away with state stores to make wine and spirits widely available and subject to more price competition.

But as I’ve noted in other posts, legislative proposals for privatization wouldn’t expand sales outlets that much, because the plan is to limit the number of licenses and sell them to the highest bidder, reaping a $1 billion-plus windfall for the state.

And in doing this, we’d blow away 3,200 decent union jobs in the state store system.

Is it worth it?

Sure, new jobs would be created as private stores open. But they’d almost certainly be lower-paid, offering fewer benefits if any at all.

If privatization means moderately expanding availability and giving a select group of private operators a monopoly on sales, you have to weigh that against the damage done to state store employees and their families.