Every time I drive into Oregon I get accosted by some guy wearing a safety bib asking for money. To residents of the 48 states without a self-serve prohibition, OR/NJ's gas law makes about as much sense as a pitcher named "Tomorrow":
Ohhh 1930s humor... Anyway, after two weeks of Oregon residency, I am beginning to see the wisdom in this draconian measure. No, I am not going native, so I'll start off with the down side. Mainly, mandatory full-serve amounts to an assault on freedom for the creation of low-wage jobs at the expense of the consumer.
What many people don't know is that gas prices are generally very competitive, and often provide very little margin. Without an attached convenience store, some stations could never post a profit. By mandating that all gas stations pump the gas for you, it provides more time for drivers to enter the convenience store to buy high-margin items. For example, if a gas station is in a competitive market (multiple gas chains or independents), their books might look like this:
California
Gas Costs: $100,000
Labor Costs: $5,000
Convenience Store Cost: $10,000
Gas Revenue: $100,000
Convenience Store Revenue: $30,000
*Profit: $15,000*
Oregon
Gas Costs: $100,000
Labor Costs: $10,000
Convenience Store Cost: $20,000
Gas Revenue: $100,000
Convenience Store Revenue: $60,000
*Profit: $30,000*
Under this scenario, the full-serve station gets a higher percentage of their customers into the store, which in turn increases the incentive for the station to keep their gas prices low. So the station owner is willing to take a hit on the increased labor costs, since he makes it up in the store.
If you are unhappy about the station making more money off of you, remember you get a donut out of it. If you don't like donuts, you can get a free ride from those who do, by staying in the car on a cold day. Everybody wins!
The Daily Show presents the counter argument quite well, notice the trade group has the word "retailers" in the title: http://www.thedailyshow.com/watch/mon-june-5-2006/pump-my-ride