Saturday, July 4, 2009

Wal-Mart and the Employer Mandate

The advocates of "universal health care" got a big boost recently when Wal-Mart went on record as supporting an employer mandate requiring companies to provide health insurance for their workers.

But Michael Cannon explains why they did this. Basically, it's to use the power of the government to hurt their smaller competitors:
...[I]t all became clear when the lobbyist explained the reason for Wal-Mart's position: "Target's health-benefits costs are lower."

I have no idea what Target's or Wal-Mart's health-benefits costs are. Let's say that Target spends $5,000 per worker on health benefits and Wal-Mart spends $10,000. An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart. But it would cripple one of Wal-Mart's chief competitors.
This is just another example of the sort of unholy alliance that some big businesses and government regulators make in order to put a squeeze on smaller competitors.

This is very similar to the explanation that Tim Carney at the DC Examiner offered for Mattel's support behind onerous new regulations on lead content in toys:
Washington toy story shows why regulation helps the big guys

... [M]anufacturers who mass produce toys or children's furniture will face some added costs from the bill, but these are costs they can bear—especially because the costs will be industry wide thus passed onto consumers.

Indeed, many of the bigger manufacturers have already implemented testing procedures to comply with the federal requirements. Their smaller competitors, however, will suffer under the burden.

A stay-at-home mom who sews children's dolls on the side or a small woodworker who sells a few child-sized chairs each year will find these regulations much more burdensome if not impossible.
The big businesses offer their support for regulations in exchange for having some say ("a seat at the table") in crafting their specific provisions. The politicians get to claim that they have a "consensus" from all the "stakeholders".

In other words, the businesses provide political cover for the politicians in exchange for the politicians providing economic protection for the businesses.

Only this time, the victims won't just be customers purchasing children's toys. Instead, it will be every American who needs health care -- which is pretty much all of us...

(Via David Catron and Brian Schwartz.)