Morning Brew: LCBO Workers Poised to Walk Out, Toronto 18's Ambitious Plot, Guns and Parties

And by a "terrible idea" I hope you mean that it was a potentially catastrophic one.

If you'd like to read all about our problematic alcohol system, with a special focus on beer, visit www.FreeOurBeer.org.

@jameasmallon

Unemployment is currently at staggering 9.4% in Ontario. It's affecting almost 1 in 10. Where people aren't losing their jobs, they're taking salary cuts, reduced hours, and more. I consider that unprecedented. If you don't, that's cool. Curious... are you a union member? Is the recession not affecting your employment?

My feelings about the LCBO union issue specifically stem from my feeling that the organization shouldn't even exist in the first place. It's unnecessary to have government involved in retail sales of alcohol. Regulation, yes. Being the sole buyer and seller (i.e a monopoly), no.

Feel free to agree or not, but don't insist on me being your monkey because I won't be :P

"Second, why would a union make concessions in a recession that will never be alleviated in a boom?"
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Perhaps this could be part of the deal. Accept the concessions only under the guaruntee that they will be reviewed in a year. If the city is doing better financially and they refuse to give them back (or at least partially), then feel free to strike away. They'd have a valid excuse that time, and would probably get more public support.

"Unemployment is currently at staggering 9.4% in Ontario. It's affecting almost 1 in 10."
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In reality, it's worse than that. That 9.4% only includes people who are actively seeking work. Those who have given up aren't counted, nor are those who have opted to be a stay at home Mom/Dad after losing their jobs. Statscan has shown the 'discouraged' workers rising in numbers disproportionately to the rise in unemployment. ie, a larger percentage of unemployed are giving up than when it was last measured and if it wasn't for that, I'm sure that 9.4% would easily be over 10, potentially 11%.
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Also, like you pointed out, statscan has also shown a disproportionate loss of full time jobs and an <b>increase</b> in part time jobs.

There are jobs where unions are vital; where people are doing dangerous things or where they are likely to be taken advantage of. The trouble is that too many unions have gone far, far beyond this instead using their clout to make demands that are ridiculous when you compare them to similar nonunionized positions. Why should an LCBO cashier, who needs no skills or education for his/her job more than how to read an ID and scan a barcode be making two to three times as much as your average grocery store clerk who is doing virtually the same job? Why should they be promised full time work and job security? If they want full time work and job security gain skills or education that are valuable to society and society will reward you. Now, this is not true for ALL unions. There are many that represent careers that are undervalued and underpaid but cashiers and delivery persons are not one of them.

My problem isn't with the unions per se, it is with monopolies. I say have a union... no problem. But the Union has to compete with the private sector for a contract to provide the services it wants to provide. If they can provide a service that provides sufficient value for the wages/benefits they would demand, great. Otherwise, someone else is happy to pick up their slack.

Or, alternatively, if we're going to have unions be a monopoly in providing service, declare all of them essential services.

Same goes with the LCBO.

Unions were created to stop greedy rich companies from taking advantage of their workers. So what happens when those companies are not so rich anymore? Unions were not designed for the current situation.

"Why should an LCBO cashier, who needs no skills or education for his/her job more than how to read an ID and scan a bar code be making two to three times as much as your average grocery store clerk who is doing virtually the same job?"

Perhaps this is due in part to the vastly higher profitability of an LCBO outlet versus a grocery store (in this case largely due to the monopoly that Jerrold so despises, but I'm not so interested in debating that point). If the same work for one retailer facilitates higher profitability for the employer, it doesn't seem unreasonable to me that such work would be compensated at a correspondingly higher level. LCBO cashiers do have additional responsibilities that do not apply to grocery workers; namely, making important (in my view) decisions about which customers ought not to be sold alcohol due to age, intoxication, or intent to supply minors. Not that I think this should, in itself, command massive wage premiums; however, I do think it is misleading to suggest that the jobs are "virtually" identical. Also, for what it’s worth, I have experienced consistently better customer service and higher levels of product knowledge at my local LCBO than at any of the various non-LCBO alcohol vendors (Wine Rack, Vintages, etc.) or any chain grocery store. It seems that those higher wages do translate to a better customer experience, but I would imagine that this experience varies across individual LCBO stores.

Really -- is it clearly the case that LCBO workers make way too much, or that grocery store cashiers make way too little? If there is such a thing as an appropriate wage, I would suggest that it's somewhere in the middle. Funny how many people are quick to suggest that <em>others</em> are obviously overpaid for their no-skill, no-education job... no matter how robotic their own work may be, and no matter how ridiculously inapplicable their post-secondary education is to their own, higher-paying, PSE-mandatory work.

I'm also not sure if comparing LCBO clerks to grocery clerks is particularly illustrative of the excesses of unionism, as there are many unionized grocery workers (mostly UFCW?). It might actually demonstrate how collective bargaining arrives at wages that reflect the employer's ability to pay, which is itself based on the profitability of the employer's operations. You don't have to agree, but I think it's worth pointing out the ways in which the real world is more complicated than the simple picture you have painted.

Collective bargaining isn't just about fixing a few highly dangerous workplaces, it's about shifting from total control of employment by the employer (i.e. servitude with very minimal statutory obligations, which is the historical model underlying the standard non-union employment relationship under law) to a structured relationship with clear and fair complaint procedures (i.e. for grievances) in the face of any unjust or arbitrary treatment (not simply physical safety) along with fairly negotiated terms of employment. In my view, a workplace where employees have no say whatsoever in the terms of their employment beyond "take it or leave it" is inherently one in which workers are taken advantage of.

No, Mike, it seems that m refers specifically to city workers (who are more than just "garbage men" BTW) by comparing them to the cops and firefighters. Comparing LCBO workers to city employees via an appeal to fairness would indeed be nonsensical, because it is a different employer, and there's nothing in m's post to suggest that m has done so.

As for risk -- the city's ability to afford raises for its employees shouldn't be contingent on the level of risk in the job. If the city can't afford raises, it shouldn't do so, but neither should the risk involved in emergency services mean that the city should throw fiscal realities to the wind and not bargain with those groups just as rationally as with others. The truth, I think, is that the city knows it must try to squeeze concessions from the presently striking workers because the cops, etc., cannot strike and thus have an arbitrator standing between the city and its cost-cutting objectives. Those who suggest that no public sector workers should have the right to strike should keep that in mind.

Privatizing the LCBO is a terrible idea and here just four reasons why:

1) the LCBO is one of the largest purchasers and retailers of alcohol in the world. It provides a wider selection at better prices and, most importantly, at the same price to all citizens in Ontario regardless of their location so that the bottle of red that you buy in Toronto costs the same as the bottle you buy in Meaford or Kenora.

2) The LCBO returned $1.3 billion in profit to the province in its last fiscal year - in additon to nearly $1 billion in tax revenue. This money goes to the Government of Ontario's Consolidated Revenue Fund that, in turn, funds Ontario school boards, hospitals, roads, social programs, etc. Looking out my window at Toronto's crumbling infrastructure, I don't think this is money we, the citizens of Ontario, can afford to give away.

3) Ontario's past experience with privatization demonstrate that it's a bad idea - short-term gain over long-term value. The $3.1 billion privatization-happy Mike Harris sold Highway 407 for made less than $1.5 billion for the province once the costs of land and construction were deducted. 10 years later, the highway is worth $10 billion - money that should be going to the people of Ontario. Instead, this privately-owned highway continues to COST Ontario's tax-payers thousands of dollars EVERY DAY as a result of the sweetheart licence plate denial for non-payment clause Harris legislated for 407 ETR. Thanks to Mike Harris, your tax dollars subsidize SNC Lavalin's profit margin. Think about that before rushing to sell-off the LCBO.

4) Privatizing the LCBO won't make booze cheaper in Ontario. For one, Ontario practices 'social-pricing' on alcohol to prevent the situation you have in Europe where price-slashing supermarket specials on beer, wine and spirits have fueled a crisis in binge drinking, particularly among teens and 20-somethings. Private or public, the $$$ you pay for the cheapest bottle of wine or scotch will stay the same. Nor will privatization lower the taxes that the government levies on alcohol. Instead, privatization will raise prices as smaller, privately-owned companies enter the market (as happened Alberta and BC) to reflect increased operating costs as well as the increased price of liquor itself without the LCBO's monopolist advantage to leverage better wholesale prices from suppliers. As it stands, LCBO prices are generally competitive compared to both New York State and Quebec (and better than Alberta). And if you think your bottle of Moet is too expensive in Toronto compared to NYC, I honestly have no sympathy for you whatsoever.

The LCBO provides good value for money to the people of Ontario. While I don't support a strike, anyone who thinks privatizing the LCBO is a good idea is looking to make a buck off your booze. And while that's going to happen anyway, I'd rather that money go to the public purse than Joe Whoever's back pocket.

Reason # 5 - LCBOs are pretty

Did you cut and paste this from the LCBO's web site, or are you so familiar with their common defense strategy that you can spit this stuff out in your sleep?

<i>1) the LCBO is one of the largest purchasers and retailers of alcohol in the world. It provides a wider selection...</i>

false. they do provide a very wide selection but it's almost exclusively mass produced stuff. Finding anything niche from a small producer in Ontario --- even that's made IN Ontario --- is near impossible. The LCBO decides what to buy and sell and leaves the consumer with no opportunity to veer from what the LCBO chooses for us to access. That's a tough nut to swallow for a sophisticated drinker and meaningless to the average $10 two oceans wine drinker. They rely on consumer ignorance of whats out there.

<i>2) The LCBO returned $1.3 billion in profit to the province in its last fiscal year - in additon to nearly $1 billion in tax revenue. This money goes to the Government of Ontario's Consolidated Revenue Fund that, in turn, funds Ontario school boards, hospitals, roads, social programs, etc. Looking out my window at Toronto's crumbling infrastructure, I don't think this is money we, the citizens of Ontario, can afford to give away.</i>

This can still occur via legislated tax and duty collectio without the need for a bloated union employed retail chain. Shifting overhead and logistics burdens to private retailers would save the LCBO even more millions (no need for stores or province-wide distribution and 7000 overpaid staff).

<i>3) Ontario's past experience with privatization demonstrate that it's a bad idea - short-term gain over long-term value. The $3.1 billion privatization-happy Mike Harris sold Highway 407 for made less than $1.5 billion for the province once the costs of land and construction were deducted. 10 years later, the highway is worth $10 billion - money that should be going to the people of Ontario. Instead, this privately-owned highway continues to COST Ontario's tax-payers thousands of dollars EVERY DAY as a result of the sweetheart licence plate denial for non-payment clause Harris legislated for 407 ETR. Thanks to Mike Harris, your tax dollars subsidize SNC Lavalin's profit margin. Think about that before rushing to sell-off the LCBO.</i>

Liquor sale hasn't been privatized sine the 1920s and the insanity of 407 sale has nothing to do with liquor privatization. Apples to oranges.

<i>4) Privatizing the LCBO won't make booze cheaper in Ontario. For one, Ontario practices 'social-pricing' on alcohol to prevent the situation you have in Europe where price-slashing supermarket specials on beer, wine and spirits have fueled a crisis in binge drinking, particularly among teens and 20-somethings. Private or public, the $$$ you pay for the cheapest bottle of wine or scotch will stay the same. Nor will privatization lower the taxes that the government levies on alcohol. Instead, privatization will raise prices as smaller, privately-owned companies enter the market (as happened Alberta and BC) to reflect increased operating costs as well as the increased price of liquor itself without the LCBO's monopolist advantage to leverage better wholesale prices from suppliers. As it stands, LCBO prices are generally competitive compared to both New York State and Quebec (and better than Alberta). And if you think your bottle of Moet is too expensive in Toronto compared to NYC, I honestly have no sympathy for you whatsoever.</i>

Wait, privatization won't lower taxes and levies? You mean the government will still collect those millions of dollars to give back to social causes? You just defeated your own argument.

The social responsibility angle is a total lie. Putting beer and wine and spirits on sale doesn't make the community turn into crazed drunk lunatics. Impose minimum taxation and pricing standards, but let private retailers create competition and let the MARKET dictate pricing. Let the MARKET dictate product demand. Allow small Ontario winemakers to sell their locally produced product in retail stores without having to go to the wineries.

Amen, Cabfrancophone.
Just to add some more...

1. Jurisdictions with private liquor retail and similar populations have much better selection of beer, wine and alcohol than Ontario with the LCBO. Go to the San Francisco Bay Area, Chicagoland and New York and you will see. Prices are less in most jurisdictions as well.

Frankly a bottle of First Growth Bordeaux should cost more in Kenora than in Toronto-a steak sure does. Booze should not cost the same everywhere in Ontario, nothing else does. There’s transportation, demand and other costs to factor in. As an urbanite I’d be happier subsidizing the food of people in smaller communities than their alcohol purchases.

2. Retailing the same volume of alcohol sales by private or public stores has no affect on tax generated by the sale of alcohol. As to the “profit” earned by the LCBO, when it’s a monopoly run by the government it is an unlegislated tax. Raise the legistlated liquor taxes slightly if necessary to compensate. License fees will be generated from retail stores that want to sell alcohol. The licensees would have to pay taxes on their profits. Selling the LCBO would be a big one time payoff.

3. Having bad experiences with privatization like the 407 does not mean that the government needs to screw up privatising the LCBO. The recent the E-health project problems don’t mean that the government should get out of the health business. There are already many LCBO Agents in smaller communities that are already semi-privately run by locals with great success (and won’t be on strike).

4. Experiences in competitive markets like the US, Australia, New Zealand, and most of Europe in the world would indicate that booze will be cheaper than it currently is in Ontario. Combating binge drinking? Are you kidding? Have you ever been up north? Public/private ownership of the retail chains is very low on the causes of societal ills like the binge drinking or alcoholism. Social pricing has not been a great success in places like Sweden To use your example of competitive pricing--buy a 40 oz bottle of Canadian Rye in any of the lower 48 states and tell me how much less you paid compared to the LCBO. Part of that price difference is legislated taxes, but some is monopolistic gouging by a government monopoly.

If retail is such great thing for the government to be in why doesn’t the Ontario government get into the business of selling food, cigarettes or other sundries? It is not in society’s interest that’s why. There is very little public interest at all to do so.

<i>In my opinion...</i>

Look, if I want to read Metroblogging Toronto, I know where to find it, ok?

Wow, I can have fun with this...

1. Tesco - private retail chain in the UK, world's largest Alcohol buyer. Google it to find out, can people still stop pushing this flse claim?
2, When Alberta privatized their liquor stores, they ended up making MORE tax revenue than when they ran the stores. You see when you let someone else (private system) pay for the warehouse, distribution, retail stores, advertising, management and administration, all you have to do is collect taxes. You also get the benefit of tax revenue without having to pay anything first. Today, the LCBO has to BUY the alcohol first, store it, ship it, and retail it, and only when it's sold do they make any money. That could be 6 months after the goods are paid for.
3. This point doesn't make any sense. If that's the case, the government should take over all businesses in the province and run the place like the old soviet union...how did that work out?
4. The sad reason stuff costs more here isn't just the tax, it's that the MONOPOLY system makes it so expensive to do business, that producers are charging MORE for product sold here in the first place, in order to pay for all the Airmiles, rebates, and glossy LCBO advertising that you have to commit to. Alberta is private, if one store doesn't carry your product, the three acorss the street probably will.

As for is Alberta cheaper - don't trust me, see for yourself.
http://www.liquorstoresgp.ca/flyer.cfm
And keep in mind this is ONE store out of 1,000.