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Oct. 16, 2006
Copyright © Las Vegas Review-Journal


THE OFFICE: for richer for pourer

Study suggests a little social alcohol can grease the wheels of business

By JENNIFER ROBISON
REVIEW-JOURNAL




From left, Joel Jarvis, Natalie Manning and Christopher Steely drink and chat Tuesday during a business mixer at the Sterling Club at Turnberry Place. Jarvis, an insurance salesman, said social drinking creates bonds that lead to opportunities to make money.
Photo by Craig L. Moran.

Forget everything you ever knew about how to land the best job and earn the most money.

Think a college degree alone will help you get ahead? Guess again.

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How about the invaluable experience that comes with age? That might not be enough, either.

Race, gender, parents' education -- a new study says none of those traits matter to your career potential as much as one single characteristic: Do you drink with business associates?

A report from the libertarian think-tank Reason Foundation reviewed reams of existing research into drinking habits and incomes and found, after controlling for other factors including educational levels, sex, ethnicity and religion, that men who drink alcoholic beverages earn 10 percent more than their teetotaling counterparts. Women who drink take home 14 percent more than women who abstain.

What's more, men who stop by a bar after work for drinks at least once a month enjoy an additional 7 percent premium beyond the initial 10 percent bonus they reap for imbibing in adult beverages in the first place.

For women, occasional bar-hopping didn't supplement the existing premium on drinking.

Edward Stringham, an economics professor at San Jose State University and the study's co-author, attributed the higher pay to the more extensive social skills and networks many drinkers develop.

"People who engage in social drinking are out meeting more people, meeting more potential employers and clients and interacting with their co-workers more," Stringham said. "That's going to increase their chances of success on the job."

Stringham speculated that women saw few monetary benefits from a night out at the bars because they're building social networks elsewhere.

Which begs a chicken-and-egg kind of question: Do drinkers earn more because they're building social skills at events, or do people who like to drink with friends have more extensive social skills to begin with?

"It's definitely possible (that drinkers are innately more sociable), but I think the data at least suggest people who are engaging in this activity should not be looked down upon as engaging in irresponsible behavior," Stringham said.

For Joel Jarvis, the only surprise in Stringham's study is that alcohol's wage boost maxed out at 17 percent.

Said Jarvis: "That's where all the business is done -- in bars and at events. Well, there and the golf course. But even on the golf course, people are drinking."

Jarvis, a salesman with insurance brokerage Kaercher Campbell & Associates in Las Vegas, estimated that 95 percent of his major deals have come from contacts he made while having drinks with business acquaintances. Jarvis said he hasn't made a cold call in four years, yet he currently has 17 "hot leads" on developers, restaurateurs, hoteliers and attorneys who might buy insurance from him.

"The bottom line is, I didn't call these people up," he said. "There's some connection to every single one of them."

That connection? After-hours mixers.

"(Clients) don't call people who call them on the phone," Jarvis said. "They call the people they went out with and had fun with on a social level. They call them for business because of that existing relationship. Breaking bread or having a drink together creates a bond that leads to opportunities to make money and have a better job. The spoils come to people creating those social relationships."

That's a message Jarvis is spreading through The Link, a 4-year-old business-networking group with 40,000 contacts. The Link compiles and distributes via the Internet details on hundreds of local business seminars, awards dinners and other gatherings of interest to professionals looking to mingle.

"People are getting together, and yes, they're drinking," said Jarvis, who cops to meeting associates once a week for a couple of beers. "We're not talking about partying all night with Kevin Federline. They're making connections that help them generate business and make more money."

Stringham's theory also makes sense to Robin Roberts, vice president of Bogar Enterprises in Las Vegas.

Roberts said she'll indulge in a little light drinking -- she favors bourbon and wine -- perhaps twice a week after hours with associates or clients.

"Most businesses are relationship-based, so if you spend time with somebody in a relaxed atmosphere outside the office, you have a chance to know a little bit more about them personally, and to ally yourself with them," said Roberts, whose company makes pint-size replicas of the "Welcome to Fabulous Las Vegas" sign at the southern tip of the Strip.

Roberts said having a drink isn't essential to closing deals or snagging new business. Rather, she said, it's the laid-back social environment where drinks are on tap that oils the wheels of commerce.

At least one Las Vegan takes issue with the notion that drinking is key to succeeding in business.

Dale Rowse, principal of the Viridian Group in Las Vegas, said he believes teetotaling has advanced his career.

"You can make contacts -- and also make a better impression -- if you're not drinking," said Rowse, who abstains from alcohol for health reasons. "I wouldn't drink at work, so why would I drink in a social situation that's also somewhat a working environment? First impressions are very important, and those types of situations are often where you have a chance to make a first impression. My reputation is something I want to protect. I always want to be seen as a businessman of utmost professionalism."

The alcohol-free life appears to be working for Rowse.

His income tripled from 2004 to 2005, Rowse said. He launched Viridian, a residential real estate brokerage, in 2005, and has already taken the business from one employee to a staff of 11. He's landed exclusive representation on several projects, including the 1,300-condominium Sullivan Square in southwest Las Vegas. He's projecting that Viridian's income will quadruple from 2006 to 2007.

Rowse doesn't avoid events where alcohol is served. He attends after-hours networking parties about twice a month, and in late September, he hosted a company dinner at which some of his employees had wine.

Stringham's study did find benefits for abstainers such as Rowse.

Businesspeople who hit bars or restaurants at least once a month to socialize without imbibing also enjoy higher earnings than workers who steer clear of alcohol-oriented places, the study noted, though the 7 percent income boost they get on average is lower than the 17 percent wage benefit male drinkers enjoy.

That contrast in pay means measures to discourage alcohol use could have serious economic effects, Stringham said.

From banning beer at music festivals and sports stadiums to raising sin taxes on booze and limiting alcohol advertisements, public policies increasingly aim to curtail drinking, Stringham said. He added that having fewer drinkers could set off a cascade of fiscal consequences, starting with lower incomes that could result in less tax revenue for local, state and federal governments.

Stringham said his study was a "purely academic" review of existing literature, and thus required no funding from alcohol-related businesses or any other entities.

Stringham acknowledged that drinking's effects on income can turn negative if indulging becomes excessive. But he said he found that the cutoff at which a drinker earns as little as a nondrinker is 21 to 38 drinks a week.

"We don't want people to engage in irresponsible drinking," Stringham said, "but I think we should look at responsible social drinking as a potentially good thing."



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