Explaining Southern California's economy

Sorry, small business — liquor stores can increase crime

Boyle Heights

Grant Slater/KPCC

A group of activists say there are too many liquor stores in Boyle Heights.

KPCC's Ruxandra Guidi did a story on Tuesday about Boyle Heights and its liquor store problem. To summarize, a group of activists believes that the concentration of liquor stores in the neighborhood is far too high, that this leads to crime, and that the issuance of new liquor licenses should be limited.

Initially I thought this was a good example of the vice league standing in the way of market forces — and small business, to boot! There may be a lot of liquor stores in Boyle Heights, a neighborhood east of Downtown L.A., but they pay taxes and probably employ one or several people in addition to the owner. True, they may be preying on the area. But then again, if you want to open a liquor store or establishment that serves alcohol, you want to go where the customers are.

However, this is one of those cases where the public good trumps the free market. Some undated research done by Kathryn Stewart of the Pacific Institute for Research and Evaluation demonstrates that there's a link between alcohol outlet density and violence:

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Is Jerry Brown's tax deal a win for small business?

At Fox & Hounds Daily, John Katabeck of the National Federation of Independent Business thinks so:

California's tax policy currently rewards out-of-state corporations for selling their goods in California but keeping their manufacturing and employee bases elsewhere. These companies can play games with their taxes year after year robbing the state of critically-needed funds and denying hard-working families of good-paying jobs.

Small business desperately needs all the help it can get during these tough economic times to ensure they can keep their doors open and operate in their communities. This measure puts California on a level playing field with other states like Texas and New Jersey where similar policy was put in to place by Chris Christie and Rick Perry.

There is however a legitimate question about whether small businesses are actually going to become the engines of job creation that everyone seems to think they can be. This post from Business Insider is fairly mean-spirited, but it makes some solid financial points:

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