Baseball Crank
Covering the Front and Back Pages of the Newspaper
January 24, 2006
POLITICS: Targeting the Burbs

Pejman and McQ take on the farce of Maryland's legislation attempting to raise Wal-Mart's cost of hiring employees - or, alternatively, depress its wages - by mandating that a fixed percentage of its payroll be spent on health insurance. The attack on Wal-Mart, of course, comes from a variety of directions; unions and small store owners who view the company as a competitive threat are the leaders. This particular bill seems to have been driven as well by legislators looking to beef up government revenues. I particularly liked this bit of economic illiteracy:

Many state legislatures have looked to Maryland as a test case, as they face fast-rising Medicaid costs, and Wal-Mart's critics say that too many of its employees have been forced to turn to Medicaid.

Let's consider what this could mean:

1. People who had health insurance at their prior job quit to work at Wal-Mart, thus becoming eligible for Medicaid. This seems unlikely to have happened in large numbers, unless of course the prior job made less in wages and they preferred to get more wages instead - a choice the state wants to take away.

2. People turned down a chance to get a job with health insurance so they could work at Wal-Mart instead. Same deal as #1.

3. People had health insurance at their prior jobs but were forced to work at Wal-Mart when Wal-Mart drove their previous employer out of business. This may be the case in some situations, but remember that Wal-Mart's primary competitors are usually mom-and-pop stores that don't typically have generous benefits packages.

4. People left smaller employers with no health insurance to work at a bigger company with no health insurance. This is more likely - so the state is just punishing Wal-Mart for being big enough to attract enemies, even though it's no different from a host of small businesses and creates no additional Medicaid liabilities.

5. People who got jobs at Wal-Mart previously did not have jobs. In such cases, of course, no additional Medicaid liabilities are created, but unemployed people are put to work and get a steady paycheck and work experience. This should be discouraged?

Meanwhile, if attacking the nation's largest retailer isn't enough, Joel Kotkin enumerates a variety of ways in which left-wing radicals, including the mayor of Los Angeles, are trying to resist the natural desire of Americans of all kinds to pursue what was once known as the "American Dream" - single-family house, yard, car - in the suburbs. I say "left-wing radicals" because I have to hope that, as with the attack on Wal-Mart, the Democratic party as a whole knows better than to attack the suburban lifestyle.

If the GOP cements itself as the party of people who live in suburbs and the party of Wal-Mart, its customers, its shareholders and its employees, there won't be a whole lot of America left for the Democrats to represent.

Posted by Baseball Crank at 9:14 AM | Politics 2006 | Comments (5) | TrackBack (0)
Comments

Crank,

Believe there is another possibility. A number of Walmart employees have health coverage from their spouse's employer. In military communities for example probably 50% or more of Walmart's employees are military spouses.

Reality is the whole fight against Walmart isn't about health care or mom and pops being put out of business. Unions don't like Walmart because they don't get dues from their workers and are leading (and prodding legislators in) the fight against Walmart.

Posted by: LargeBill at January 24, 2006 11:57 AM

Crank,
I agree that its ridiculous to punish employers who don't offer health insurance.

The whole concept of employer provided health insurance dates back to WWII; mandated caps on wages forced employers to get creative in rewarding their best employees.

Today there is no reason why GM, or any other large company, needs to be so entrenched in our sordid system of health care financing.

But the alternatives are either 1)a market based approach where everyone shops around for their own coverage; OR 2) the government pays for everyone's health care.

The reason the first won't work is that we, as a society, feel obligated to ensure all citizens receive adequate health. So the government, inevitably, will still foot the bill for much of society.

Therefore, I hate to say it, but national health insurance is the only way to go.


Posted by: pat_rick at January 24, 2006 12:36 PM

I agree with Pat. You can't have it both ways. You either agree that health care is as important a national priority as education, and find ways to provide it, or you have it done on a private level. The private level has evolved into a mess, where the old adage of American Health Care being so sensational is a myth of the 70s and 80s. So penalizing WalMart for not providing health care is wrong if you have national health coverage.

One way or another. As usual, extreme fringes want it all, and that never happens.

Posted by: Daryl Rosenblatt at January 24, 2006 1:28 PM

Let's not forget one key detail in the Wal-Mart/MD case:

Who started and led this charge to raise W/M's healthcare costs?

Giant Foods. Their largest potential competitor in the grocery biz in MD. This is more an example of one big corporation co-opting the legislature to attack a competitor than a bunch of unionists and libs going after Big Bad WalMart.

Posted by: Jack at January 24, 2006 8:48 PM

Of course, Giant is a union shop, and finds driving up its competitors costs easier than negotiating down its own. The union provides critical leverage in this as well. Do you really believe that a non-union Giant would have had the same leverage in this situation/

Posted by: phwest at January 25, 2006 9:32 AM
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