Dear Brilliant,
In Maryland, the Dems were shrewd enough to pass a law with a standard that Wal-Mart was pretty much already meeting.
The law in Maryland requires that Wal-Mart spend 8% of its payroll on health care. Prior to the law, Wal-Mart was spending over 7% of payroll on health care. Thus, the increased spending mandated by law was trivial, representing a small fraction of one percent of its sales in Maryland. Raise the price of that $10.97 item to $10.99, and they're done.
Or worse, permit wages to fall from an average, in Maryland, from $10.60 to perhaps $10.40, divert the savings to health insurance costs, and there you have it! I can't say that this has been Wal-Mart's intention, but I noticed that the average hourly wage paid in Maryland by Wal-Mart did actually decline a little bit from before the law was passed till the time after the law was passed.
However, the Chicago legislation mandates that Wal-Mart raise its minimum starting pay from $7.25 to $10 per hour. In that average pay in these stores is only $10.99 per hour, the net effect would be to bump the entire pay scale up by a couple of bucks per hour. That's not an increase in payroll costs of a fraction of one percent, but rather an increase likely of around 20%. Combined with the mandated $3 per hour in benefits, and suddenly, Wal-Mart has just seen the government of Chicago destroy its business plan in the city.
As well, Wal-Mart isn't speaking about breaking leases and stuff. Wal-Mart's threat is:
"Wal-Mart has threatened to cancel plans to build as many as 20 Chicago stores over the next five years if retailers are required to pay employees at least $10 an hour and $3 in benefits by July 1, 2010."
They'll just spend their finite development capital elsewhere.
Finally, even in Maryland, the extremely small burden the legislature put on Wal-Mart has had consequences. For the sake of less than a penny on the dollar of payroll, Wal-Mart has more or less decided not to locate a major distribution center on the Eastern Shore in Maryland. That center, with hundreds of jobs, along with its payroll taxes and other benefits to the government, will now likely be located in Delaware, or perhaps Virginia.
sitetest
Yeah. They backed off in Md, for the time being. But they'll be back.
You can also look at other states like MA, which now has "universal health care coverage." It's obviously going to harm business, but it's not going to result in big operators like Target simply pulling out of the state altogether. They'll remain, and they'll pass the cost onto the consumer. In the final analysis, it's not an issue of government vs. business, but of government vs. the consumer.
Every time government passes laws that cost businesses money, it's we the people who ultimately pay.
I've heard that as well.....I don't know how much luck they will have here on the shore though....the WalMartWatch.com people have put on a big push to keep a superstore out of Onley - I can only imagine the reaction to the distribution center being located in the proposed location.
OTOH, with Perdue and Tyson being the largest private employers in this county you would think the jobs would be welcome.