A related issue is employment and concerns that alcohol tax increases will hurt workers whose livelihoods depend on the production and sale of alcoholic beverages. However, the overall level of employment in the United States is determined by macroeconomic conditions, not adjustments in the tax rates on specific industries. A tax increase could cause a permanent job loss in the alcohol industry, but research on labor economics suggests that displaced workers would almost certainly find employment elsewhere eventually. Worker displacement remains costly not only during the period of unemployment but in the long term, because displaced workers appear to earn less on their new jobs (Jacobson et al. 1993; Ruhm 1991). These transitional costs should be included as an extra cost of increasing alcohol taxes, but most or all of the employment losses in the alcohol industry will eventually be offset by employment gains in other sectors of the economy (Kenkel and Manning 1996).
