A Glimpse into Pennsylvania’s Economic Thinking

The debate over privatization of Pennsylvania’s liquor stores has uncovered a very sad and costly lack of understanding of economics and a very strong attachment to union doctrine.

No statement has been more revealing than the comment by a Turtle Creek resident who said she was opposed to privatization because it would eliminate jobs. First of all, private liquor stores will need employees. How will shelves get stocked or sales rung up or bookkeeping and accounting done without employees? Thus, the resident’s comments show either a complete lack of understanding of how business works or belief that if a job is not held by a union employee it does not count. Either way, the opinion of this person reflects the thinking of a large portion of Pennsylvanians. And that thinking remains one of the biggest obstacles to strong job growth in the Commonwealth.

Ironically, the comment came in a report on polling results that found Pennsylvanians view the economy and jobs as very important while the privatization of liquor stores by comparison was only moderately important. Ironic because of the difficulty in creating a pro-growth environment in a state where a huge fraction of voters are still in thrall to the idea that unions create good jobs and where the government has been a hand maiden to union entrenchment in the economy and delivery of public services.

Sometimes a short response to a reporter’s question encapsulates a boat load of information about an issue. The Turtle Creek commenter has done just that.

Shocking Surprise: Candidates Support State Liquor Stores

According to newspaper accounts, the four Democrat candidates for Governor have publicly supported the continued monopoly government control of liquor sales in Pennsylvania. Not too surprising given that the venue for the statements was a forum hosted by labor unions, the single biggest beneficiary of the status quo and implacable enemies of reform.

Just one more example of how organized labor, especially public sector unions, has Pennsylvania in a vise grip when it comes to policy. Teachers’ and transit workers’ right to strike and union-favoring binding arbitration for police and fire both combine to make Pennsylvania one of the worst, if not the worst, state in the country in terms of the power of labor to control a state’s governance and economic freedom. The financial situation in Pittsburgh and many Pennsylvania municipalities reflect this powerful interest’s control and the inability of these governments to enact the type of policies that would help them escape their financial plight.

Unfortunately, labor’s control over policy is so profound that not one Democrat candidate could support a sensible step such as privatizing the liquor stores. Indeed, there are few Republicans who will call for an end to teacher and transit worker strikes or stand up to police unions on the need for binding arbitration reform for fear of retaliation.

So on the state will go, among the worst economically in a country that seems headed for a period of very weak economic performance.