On our radio show Pundit Review Radio last Sunday night I made the point with our guest and old college friend Andrew Grossman, director of Wal-Mart Watch, that the Maryland Democratic legislatureâ??s override of the GOP Governor Bob Erlichâ??s veto of their â??Fair Share Health Care Actâ? would be anything but â??fairâ? for the working poor and elderly on fixed incomes whose interests liberals routinely claim to represent.
It seems as though Professor Steve. H Hanke, a professor of applied economics at Johns Hopkins University who served as a member of the Governor’s Council of Economic Advisers in Maryland (1976-77), and Professor Steven J.K. Walters a professor of economics at Loyola College in Maryland, concur with that assessment.
Utilizing an input/output economic model the professors forecasted the â??ripple effectsâ? of the new income and spending which could have emanated from Wal-Martâ??s planned construction of a new distribution center in the poorest county- Somerset- in Maryland, which because of the new legislation, will inevitably be cancelled.
In short, the legislation intended to liberate workers from Wal-Mart â??exploitationâ? will end up making them poorer.
The new distribution center would have resulted in more jobs, more economic output, higher compensation, and more tax revenues for the state of Maryland.
The center’s 800 employees would have created an additional 282 jobs among “upstream” suppliers and “downstream” retailers and service establishments; all told, the center would have boosted county employment by 14% and private sector employment by 20%.
â?¢ Total annual employee compensation in Somerset would have risen by $46.5 million, or 19%.
â?¢ Annual output (or “gross county product”) would have risen by $128.3 million, or 19%.
â?¢ State and local tax receipts would have increased by $19.2 million annually; this would include $8.5 million in property taxes, $5.6 million in sales taxes and $1.4 million in personal income taxes.
But thatâ??s not the only â??unintended consequencesâ? of this anti-growth/ anti-worker legislation:
Those losses, though dramatic, probably understate the full extent of the damage in this case. They do not include foregone employment and income from construction of the facility and related infrastructure improvements. What is more, Wal-Mart’s tentative plans for a second distribution center in Garrett County, in mountainous western Maryland, also appear dead. Garrett, with a poverty rate that is 70% above the state’s, is only slightly better off than Somerset.
How could Democratic legislators turn a â??blind-eyeâ? to the foregone economic benefit to the poorest of Maryland citizens the authors ask?
Partly, of course, they are simply eager for Big Labor’s votes and money and therefore subservient to its interests. The Service Employees International Union actually helped draft what became known as the “Wal-Mart bill.” Unable — so far — to organize workers at the company, the union’s immediate national strategy is to limit Wal-Mart’s competitive reach by raising its costs. Maryland was a shrewdly chosen place to kick off this campaign.
Ah, Big Labor- friend to the poor.
As I said to our friend Mr. Grossman on our program, this bill is nothing more than a mechanism to exert as much force as possible on Wal-Mart to raise their costs and make them less competitive until they agree to unionize their workers. Thatâ??s all pro-Big Labor union groups like Wal-Mart Watch really care about. And that is exactly what this whole sad charade is all about.
The authors correctly conclude that Wal-Mart in not the enemy but rather the â??front line soldiers in the War on Poverty.â? They are 100% correct.
Consider the report released earlier this month from Global Insights, an economic analysis firm, that evaluated Wal-Martâ??s impact on local communities and the wider economy. It was also reviewed by and independent panel of economists, including a scholar at the liberal Brookings Institute.
Global Insights found that Wal-Martâ??s expansion between 1985-2004 was associate with a 9.1 percent decline in the price of food at home, a 4.2 percent decline in the price of other commodities and goods, and a 3.1 percent decline in consumer prices overall, as measured by the CPI. The analysis concluded that Wal-Mart saves the average working family about $2,329 per year.
The real enemy of the â??exploitedâ? Wal-Mart employees is the â??Big Laborâ? Union backed organizations such as Wal-Mart Watch and their liberal-Democratic supporters who are pursuing their own selfish interests to enhance their own rapidly diminishing political power at the expense of the very same constituents they claim to represent.
I really hope that when our liberal friends who run Wal-Mart Watch, the Big Labor Union bureaucrats , and the elite liberal politicians of Maryland, sit down to dinner in their upper-middle and upper class suburban Maryland homes that they take a moment to consider and reflect upon the thousands of their impoverished Maryland fellow citizens in Somerset County who are going to suffer immeasurably because of this terrible piece of legislation they worked so hard to enact.
And the bleeding heart liberals wonder why the American people, by and large, donâ??t trust them with their wallets.
This is exactly why.