Great news: Congressional gift shops also run deficits
posted at 3:05 pm on January 18, 2012 by Ed Morrissey
Well, why not? After all, what tourist visit to Capitol Hill would be complete without some souvenir red ink?
Both of the gift shops at the Capitol Visitor Center (CVC) are losing money, despite the 2 million people who visit the U.S. Capitol every year.
The Architect of the Capitol’s office (AoC), which oversees the shops, won’t say how much they lose. An annual report from the office showed the shops had $3 million in revenue in fiscal 2010, but the report offers little information on its costs, making it impossible to figure out how much the shops are losing.
Lawmakers were worried enough about the mounting losses to include language in last month’s 2012 omnibus spending measure to figure out how to make the shops profitable. The provision asks the AoC to report back by March 31 with a plan to get the shops out of the red.
The gift shops employ 20 people, which costs more than a million dollars in personnel costs, including benefits. That’s not a surprisingly large number, even for a retail environment. If the overhead can be reasonably calculated at 25%, that would make the average annual salary for employees about $40K per year with another $10K in benefits. That’s pretty good pay for retail — something just shy of $20 per hour — but it includes the pay for managers, and the shops are located in Washington DC, where personnel costs will be higher anyway.
I’ve been in the gift shops a few times. They have two in the basement of the Capitol, but it’s not terribly clear why they need two shops. For the traffic they generate, one should suffice. The location of the shops are also puzzling; even in the commons area of the visitor center, they’re not easily seen, concealed as The Hill notes by large standing concrete walls, presumably to buffer the noise going both directions.
I’ve also seen the prices on the souvenirs, which make it hard to believe they’re selling the merchandise at break-even pricing. The shop blames a 2009 “Buy American” directive for their fiscal woes:
The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.
“The gift shops operate under policies and procedures that differ significantly from typical retail establishments, including meeting ‘Buy America’ requirements,” said Eva Malecki, a spokeswoman for the office.
The Buy American restrictions were first imposed at the behest of Rep. Robert Brady (D-Pa.) in 2009, according to his office.
A gift shop employee, who asked to speak anonymously, suggested visitors find the shops’ gifts too expensive even if they support the idea that the shops should only sell items made in the USA.
“They don’t like ‘Made in China,’ but they go shop at Wal-Mart,” the worker said of those who visit the gift shops.
At least they’re not selling French fries and French toast! Seriously, though, why does Congress feel the need to operate gift shops at a loss in a city where souvenir shops abound — and presumably don’t run in deficits for their private-sector owners? People sell DC souvenirs and memorabilia everywhere in the district, including on the streets. The material sold in the shops is objectively of higher quality than some, it’s true, but the Smithsonian gift shops sell high-quality merchandise without losing money, and their items can also be purchased on line. Perhaps it’s time that Congress got out of the souvenir business and found a better use for its resources.