Knee-Jerk Reaction on Liquor Store Privatization

Following yesterday’s post of Rep. Mike Turzai talking about liquor store privatization, I got a couple of replies via Twitter from “Swanny88,” which makes for a good starting point for discussing the issue.

In the first tweet, he argues that privatizing liquor stores would mean the state “cut it’s throat.” I’m not sure what this implies. That the state would go out of existence without government-run liquor stores? That a function of state government is to operate liquor stores? That the state would lose revenue? None of these, even the myth of lost revenue, is true.

In his second tweet, he contends the state would lose “good paying jobs” to places like Wal-Mart and 7-11.

For starters, he misunderstands the Turzai legislation, which deals with wine and spirit sales, and would retain the stand-alone liquor store model (if a grocery store purchased a license, they would have to create a separate area for liquor sales). These stores would be privately-run and licensed by the state.

More importantly, if jobs in state-owned stores do pay better than private stores, this is simply a higher cost passed on to Pennsylvania residents. This is an argument used by rent-seekers – the same using scare tactics like babies buying beer – who profit from the current system. While Turzai’s legislation does make provisions to help current state store employees to address the political opposition, it would also expand the number of stores, creating more jobs.

But above all, the advantages of privatization – new and higher revenues and better service -will benefit taxpayers and residents.