Before the Killer Coke Coalition dominated the Diag, anti-Wal-Mart activists were the misguided de jour of campus activists. I am sure they’re still around and focused on other corporate targets, but I have some good news for them.
On Jan. 12, 2006, the state of Maryland passed the “Fair Share Health Care Act,” which requires any company with more than 10,000 employees to devote 8 percent of its payroll to health care. If the company falls short of that mark, it must pay the difference to the Maryland treasury.
Democrats control both houses of the Maryland state legislature, and labor unions control the Maryland Democrats – hence the trumping of Gov. Bob Ehrlich’s veto to the legislation. The union lobby wrote this policy with the intentions of inflicting casualties on one company – Wal-Mart. The Wal-Mart Corporation is the bane of the union community because, in an effort to hold down prices and attract consumers, Wal-Mart refuses to unionize and subject itself to the crippling costs associated with unions. But is Wal-Mart really the evil corporation campus activists and unionists claim it to be?
Wal-Mart employs nearly 1.3 million people – good enough to be the single largest employer in 25 states and the largest private employer in the United States. Employees choose from one of 18 health care plans, resulting in the company paying half of its 2004 profits in employee health benefits. The idea that Wal-Mart exploits its employees for profit is ridiculous given that it earns only $6,000 per employee – roughly one-third of the national average.
While it is true that Wal-Mart’s entry into a local market will reduce prices, this isn’t really bad for consumers. When was the last time you went to your local retail store and said, “That price is not high enough, please let me pay more.”
Politicians get elected by running campaigns that advocate policies that will lower the costs of necessary goods to their constituents. When was the last time you voted for the candidate who openly promised to raise the price of what you need most? If you want to pay more out of principle, go right ahead, but don’t try to make poorer or more economically savvy Americans, who depend on Wal-Mart’s lower prices, do the same.
What should be most disturbing for bleeding-heart liberals is that the Maryland labor unions and Democratic Party were so focused on destroying Wal-Mart that they actually screwed poor people who were going to benefit from a new distribution plant in Somerset, Md. It’s yet another example of failed liberal pro-poverty via anti-business policy.
According to economists Steve Hanke of Johns Hopkins University and Stephen Walters of Loyola University in Maryland, Somerset is the poorest per capita county in Maryland. The county’s poverty rate is 130 percent above the state average due in large part to a considerable percentage of service and agricultural employment, which are traditionally low-wage economic activities. Hanke and Walters estimate the new distribution center would have led to a 19-percent rise in both annual county output and total annual employee compensation, an additional 300 jobs between suppliers and distributors and, most importantly for liberals, a $19.2 million annual increase in local sales tax collections.
As Maryland Democrats and unionists cheered, Somerset lost a rare chance at economic progress. Now, the poorest of Maryland’s poor will watch Wal-Mart move its bustling economic enterprise to neighboring Delaware and West Virginia.
I think it’s about time Americans realize that the old economic model of collective bargaining through union labor is a self-defeating proposition. Companies with a unionized work force cede a competitive advantage to their free-flowing labor competition. A few decades ago, union activists could point to the contracts of UAW workers as the crowning achievements of what unions could do for the American worker. After recent developments with Delphi and General Motors, those same claims cannot be made today.
I urge Americans in all states, particularly in Michigan where unions are still powerful, to watch out for union protection schemes. Ask yourself: What’s to stop legislatures from dropping a zero on the employment minimum or increasing the payroll-percentage mandate and thereby inflict regulations on companies other than Wal-Mart? Thank God we live in a capitalist society – let’s keep it that way.
Stiglich can be reached at firstname.lastname@example.org