Dear Brilliant,
I think the outcome will be more mixed than you suggest. I doubt that a given law will drive a major big box retailer completely out of a state. Certainly, in Maryland, Wal-Mart wasn't going to give up billions of dollars in sales, and millions of dollars in profits, over a tiny increase in payroll costs, which of course, represent the minority of their costs in the first place.
But Maryland DID lose a distribution center. It won't be back. The Eastern Shore is a relatively compact place. You can drive from the Maryland/Delaware border to the Maryland/Virginia border in a relatively short time. Gabz lives over there, she could give you a pretty accurate time.
Wal-Mart can place the distribution center in Delaware or in Virginia without harming its own business plans one iota. But it will certainly rile voters on the Eastern Shore in Maryland who realized that their part of the state, which really needs the economic development, got screwed out of hundreds of jobs because the damned Dem politicians enthralled to the Big Labor bosses, decided to tweak Wal-Mart's nose.
However, in the Chicago case, I think it's quite likely that Wal-Mart will follow through on its threat not to build more stores inside of Chicago, for two reasons. The first reason is that the magnitude of the city council's action is very large. The ordered increase in wages probably swamps Wal-Mart's net margin in these stores, meaning that Wal-Mart would have to raise prices significantly (at least for Wal-Mart) to maintain profitability.
The second reason is that this is just a city, not an entire state. Wal-Mart can easily mitigate most of the damage by placing their stores just outside city limits, to avoid the hikes. It will be a modest inconvenience to some Chicago residents to get to a Wal-Mart, but most residents will hardly notice the difference.
Conversely, to abandon an entire state, even a small one, is to abandon much, or even most of the sales available in the state. In the case of Maryland, to abandon the state would mean that for someone like me, who lives roughly in the middle of the state, along with the majority of the state's population, driving to a Wal-Mart becomes something on the order of a day-trip. Ain't gonna do it. For the roughly couple of million folks in Maryland who don't live within 30 minutes or so drive from the state's borders with neighboring states, if Wal-Mart pulled out of the state, Wal-Mart would become inaccessible, practically speaking.
And all those potential sales would be lost.
Nonetheless, whether the big box retailers' response is to pass costs along, or to pull out of a city or a state, you're right, it really isn't about government vs. business, but rather government vs. consumer, since in either case, consumers lose.
sitetest
I agree that they will reduce their presence. That's logical when your cost structure goes up. On the other hand, these threats to "pull out" are just grandstanding. Of course, I would make the threat if I were them too. But don't expect them to actually do it.
From where I live in Virginia it takes me 15 minutes to get to WalMart, which is in Maryland.....it is less than an hour drive to the Maryland/Delaware line from there.
But it will certainly rile voters on the Eastern Shore in Maryland who realized that their part of the state, which really needs the economic development, got screwed out of hundreds of jobs because the damned Dem politicians enthralled to the Big Labor bosses, decided to tweak Wal-Mart's nose.
And there are few of those Dems or big labor for that matter, on the Shore. In fact Somersett County, where the DC was supposed to be located, has one of the highest, unemployment rates in Maryland.
...you're right, it really isn't about government vs. business, but rather government vs. consumer, since in either case, consumers lose.
I'm in full agreement with you both on that point.
"Brookins said Wal-Mart officials have told him that residents of his ward spent $17 million at their store and affiliated Sam's stores outside the city in 2005. And company executives have talked about using shuttle buses to help Chicagoans get to suburban locations in a strategy similar to the one used by casinos."
For some reason, many people seem to think businesses are in competition with workers, and minimum-wage laws shift the playing field in favor of the workers. The problem with such thinking is that workers aren't in "competition" with their employer--they're in competition with other workers and potential workers.
The real effect of minimum-wage laws is to increase the competitive advantage that workers whose productive value would exceed the minimum wage have over those workers whose productive value would be less. If an employer has a choice between hiring ten workers who each cost a total of $10/hour (including benefits, etc.) or fifteen that cost $5/hour, the employer would likely choose the latter option unless the more productive workers agreed to work cheaper. But if the employer can't hire any workers for less than $10/hour, that puts the less productive workers out of a job, and so the more-productive workers can demand and receive wages that will cost the employer $10/hour since their competition was eliminated.