The Burden of Beer

My views on pretty much anything can be boiled down to one philosophy; I don’t care what another person does as long as it doesn’t directly effect me. I really don’t care if you like to drink Drano or you marry your bearded dragon and I certainly don’t waste time worrying about what you think of my habits either. The issue becomes when you get a Drano high, decide to take your dragon-wife out for a romantic drive and crash into me as a result. And that’s why the alcohol industry is sometimes a tricky beast to navigate.

Like I said, I’m not really interested in policing behavior though I do have the sense to know that there are times when a little policing is necessary. I fully support the enforcement of DUI laws, in fact, I think there should be harsher punishments for those who drive under the influence. The point at which I start to question alcohol law is when it starts regulating the distribution of booze. I can’t tell you how many messages I have received from folks all over the country desperate to get their hands on some Irish Death and I have to tell them, sorry, it’s illegal for us to ship beer direct to the consumer. Mind you, the wine industry can ship beer to your doorstep so there is some distinction in the way each alcohol segment is treated by the government.

People will tell you beer is heavily regulated because of its cost on society. We don’t want to encourage alcohol production, we want to discourage it. Well, what is the cost to society of the beer industry? I decided to do a quick analysis to get an idea. *Note. This analysis will focus on the impact of beer in Washington state only, because alcohol laws differ state to state.

First, let’s start with jobs. In 2015, beer was responsible for 23,448 jobs across brewing, distribution and retail and roughly $875 million in wages. Taxes paid as a result of the Washington beer industry were roughly $226 million. The estimated direct economic impact of the beer industry in Washington was about $2.8 billion, with an induced economic impact of $6.1 billion. The induced impact is larger to include agricultural, packaging and transportation etc.

But let’s just work with the $2.8 billion direct economic impact to be extra conservative in this analysis. Are the costs of the beer industry on society greater than the benefits?

According to Mothers Against Drunk Driving, alcohol related fatalities cost the state roughly $935 million. But I am not interested in fatalities alone, I also want to include incidents that cost taxpayers dollars but did not result in any deaths. Unfortunately, there does not seem to be data on what non-fatal and fatal incidents cost Washington state though I did find data on what it costs the nation as a whole ($51 billion).

Washington is a top state as far as total number of breweries and breweries per capita so presumably the average Washingtonian drinks more beer than those in other states. But despite the abundance of beer, we are below average when it comes to DUIs per capita. These things sort of balance each other out so for that reason I decided to directly apply the population of Washington to the national population to estimate the cost of all alcohol-related incidents. Washingtonians make up approximately 2.2% of the country’s population. 2.2% of 51 billion is 1,122,000,000. So let’s estimate that alcohol related incidents cost taxpayers $1.1 billion in Washington State instead of the smaller $935 million estimate.

So $2.8 billion subtract $1.1 billion leaves $1.7 billion in positive economic impact. But that $1.1 billion figure isn’t really fair because it assumes that all alcohol related incidents are a result of drinking beer and not wine, spirits, cider etc. If all alcohol industries were regulated the same way I wouldn’t adjust for this, but because we all are regulated differently there must be some assumptions about what drinking cultures surround each type of alcohol, so I will adjust for that.

Current trends in the alcohol industry show that 41% of U.S. drinkers report they typically drink beer. As tempting as it is to apply 41% to 1.1 billion and call that the cost to taxpayers I know each type of alcohol has it’s own culture.

For instance, college aged kids are most likely to to binge drink and they are much more likely to drink beer or hard alcohol as opposed to wine when doing so. Mind you, a lot of that has to do with price and access, not necessarily flavor preference. College aged kids aren’t drinking craft beer at the kegger, it’s light beer and bottom shelf liquor. Still, beer plays a big role in binge drinking.

There is no data on what types of alcohol consumption lead to DUIs. Because I know beer is frequently at the gatherings where folks are over-drinking I am going to assume most DUIs are due to overindulging with beer. To do this I will take the average between the 41% number listed above and 100%. This leaves me with the estimate that 71% of alcohol incidents are linked to beer drinking. 71% of 1,122,000,000 is roughly $800 million.

So $2.8 billion in positive economic impact minus $800 million in beer related accidents leaves roughly $2 billion in positive impact. But let’s not forget the actual cost of a life lost.

Estimates on the value of life vary. Taking the average between the Environmental Protection Agency, Food & Drug Administration and the Department of Transportation’s figures, the value of a human life is about $8 million. Now let’s apply that figure to the number of beer related deaths that happen each year in Washington state.

Washington averages 2.1 deaths per 100,000 people per year. That means roughly 149 alcohol related deaths per year. If beer accounts for 71% of these deaths, that would be 106 beer related deaths per year.

106 x 8,000,000 = $848,000,000. Given these estimates, the value of human life lost due to beer each year in Washington state is roughly $800 million.  

$2.8 billion in positive economic impact
-$800 million in taxpayer costs
-$800 million in value of human life lost
=
$1.2 billion in positive economic impact

In fact, even if you subtracted 100% of the alcohol incident costs (1.1 billion) and 100% of the human life lost cost (149 deaths x $8 million value of human life) you’d still be left with a net positive economic impact of $500 million.

Essentially, if you attributed all alcohol related taxpayer costs and fatalities to the beer industry there would still be a net positive economic impact on Washington state. The breakdown of impact would look something like this:

Attribute all alcohol costs on society to beer industry = Net Positive Economic Impact of $500 million, Net Induced Positive Economic Impact of $6.8 billion
Attribute estimated costs on society to beer industry = Net Positive Economic Impact of $1.2 billion, Net Induced Positive Economic Impact of $7.5 billion

This is not to say drunk driving or alcohol related accidents should be taken lightly. One alcohol fatality is one too many, but the argument that overall, society is worse off because of the beer industry isn’t one based in economic fact. The beer industry creates jobs, frequently gives back to their communities and makes your mouthparts happy. [ you’re welcome ]