An industry report makes the argument that beer is a strong component of the American economy, but it unintentionally highlights the hunt for subsidies and special favors from state and federal governments.
According to the report, “Beer Serves America,” commissioned by the Beer Institute and National Beer Wholesalers Association, the beer industry generates $253 billion in economic activity and $48.5 billion in tax revenue, and creates 1.75 million jobs. The benefits are clear.
What the study doesn't do is ponder the cost of the beer industry.
The study breaks down the economic impact on a state level, then to federal congressional districts and state house and senate districts. Showing the economic impact of an industry within political boundaries underlies the mission of industry groups -- agitate for political favoritism. Reminding politicians of the strength of the beer industry in their districts helps industry groups persuade politicians to support tax breaks, tax credits, and other forms of subsidies for beer companies.
Since 2000, for instance, Anheuser-Busch has received about $11 million in state and federal subsidies, according to Good Jobs First, a policy center that focuses on corporate and government accountability in economic development. Subsidies to Anheuser-Busch came in the form of tax credits, tax rebates, federal grants, and property tax abatements, among others. A 2011 article in The Atlantic estimated total beer subsidies at $10.6 billion from 1995 until 2010.
Large national breweries aren’t the only ones receiving government largess, either. Craft breweries have received subsidies in Virginia, New York, Arkansas, and California. Those states are not exceptions, but the rule.
Politicians, eager to support local businesses that create jobs and strengthen their appeal to voters, don't reflect on the fairness of assisting one company over another. Radley Balko detailed problems in the beer industry years ago, calling it “an artificial, anachronistic, government-created entity that’s anti-competitive and full of lobbyists and special interests."
Industry studies like “Beer Serves America” illustrate the reach and complexity of the American economy.
Those illustrations, though, aim to mislead rather than enlighten. Surely, the beer industry could hire hundreds of thousands more workers if they decided to distribute beer via bicycle instead of truck. The industry report would show a huge increase in job production, but the public would suffer for it.
What the public and politicians should ask, especially when confronted with large, flashy numbers, is whether those jobs and economic activity add value.