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Once again, the Washington Post takes the beleaguered behemoth of Bentonville under its motherly wing with the Monday editorial “Spare Goliath,” subtitled “Maryland’s “Wal-Mart law” is a bad idea that doesn’t deserve a second chance.” The editorial notes that Maryland Senate leader Mike Miller wants to reintroduce Fair Share Health Care legislation next session, in the wake of the RILA v. Fielder ruling overturning this year’s legislation, and argues:

…even if Mr. Miller could find a way to draft a legally viable version of the law, he still shouldn’t reintroduce the measure.

Targeting a single company because it’s unpopular — or, as Mr. Miller implied, because it’s buying political protection with “contributions to the Republican Party” — is a misuse of governmental power. [...] About 800,000 Marylanders don’t have health insurance, and most of them don’t work at Wal-Mart. Massachusetts, a state that is trying to responsibly address rising health-care costs, hasn’t resorted to preying selectively on its large employers. Neither should Maryland.

While I wrote about it last week, I don’t pretend to be an authority on the RILA v. Fielder ruling overturning the Fair Share Health Care Act. But as far as I can tell, the “singling out” objection seems to be an argument the judge actually rejected in his ruling:

…legislatures are permitted the “leeway to approach a perceived problem incrementally.” [...]

… It is only in cases involving politically vulnerable groups that the Supreme Court has appeared to rely, at least in part, on legislative antipathy when invalidating a law under the rational basis test.

The Post has opposed the Fair Share Health Care bill all along, so nuts to them. But to respond in brief, Fair Share Health Care is (or was) just that: as much about fairness to other businesses — and thus some kind of halfway decent health care floor for all employed Marylanders — as it was about Wal-Mart in particular. Wal-Mart’s business practices (and those of companies emulating it) are the ebbing tide that lowers all boats when it comes to health care plans. As the CEO of Giant Foods — presumably no wild-eyed radical — said in 2003:

All we ask for, and what we need, is a ‘level playing field’ where every employer pays their fair share, and where a company’s competitive advantage is achieved by means other than avoiding the provision of medical care coverage and shifting the costs towards those companies who do provide that coverage.

It’s true that in a better world, we’d have universal health care, paid for by a fair, progressive tax structure. But in the meantime, what we have is employer-based health care — and Wal-Mart is getting away with fobbing off its workers’ health costs on the rest of us while it makes billions of dollars.

A recent Washington Post poll found that 77% of Marylanders supported the Fair Share Health Care act. Like them, I think this was a good measure and is an important issue — important enough that I’ve asked the Democratic candidates for District 20 Assembly and Senate seats for their views on what should come next if the RILA v. Fielder ruling stands. I hope to have some responses collected by Friday evening.

Meanwhile, check out this great bit of Wal-Mart activism by Kris Hall in Maine: Wal-Mart walking tour podcasts; story here, via “Sandwichman” at “MaxSpeak, You Listen.”

The Washington Post’s Matthew Mosk and Yian Q. Mui report (‘Wal-Mart Law’ in Md. Rejected By Court) that federal district judge J. Frederick Motz has struck down the Fair Share Health Care bill passed earlier this year, ruling it conflicts with a federal law setting national guidelines for employee benefits. The Fair Share bill required Maryland companies with over 10,000 employees to pay a minimum of 8% of payroll to health care benefits, or make up the difference with payments to a state Medicaid fund.

In his RILA v. Fielder ruling, Judge Motz agreed with the Retail Industry Leaders Association that the Fair Share Health Care act was incompatible with ERISA (the Employment Retirement Income Security Act). Mosk and Mui report:

The Maryland law, Motz wrote, “violates ERISA’s fundamental purpose of permitting multi-state employers to maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration.”

Maryland lawmakers had been relying on an advisory opinion signed by Attorney General J. Joseph Curran Jr. (D) that listed a series of recent Supreme Court opinions, which, he argued, gave Maryland the latitude to impose the restrictions on Wal-Mart.

Motz, however, said his reading of the cases was different. “My finding that the Act is preempted is in accordance with long established Supreme Court law that state laws which impose employee health or welfare mandates on employers are invalid,” the judge wrote.

Prior to the bill’s veto override vote, at least one expert disagreed with this view of Supreme Court rulings on the matter. The Maryland Gazette reported that George Washington University law professor Phyllis Borzi believed that “since a 1995 decision, the Supreme Court has given states more control in regulating employee benefits.” The Baltimore Sun reported that Attorney General Joseph Curran agreed, “arguing that the Maryland law did not conflict with federal rules because it does not force employers to provide a specific level of health benefits. Rather, it gave companies the option of spending a certain amount on health care or paying a tax to the state.”

While that may seem like a distinction without a difference at first, I should think just paying a tax or fee to the state is operationally a very different (and simpler) choice than going to the trouble of arranging a competitive health care plan of one’s own. Be that as it may, it appears to me from inexpertly skimming the ruling that Motz’s key argument is

A short description of the statutes involved in Travelers, DeBuono, and Dillingham is sufficient to demonstrate that they lie at the periphery of ERISA analysis, not (as does the Fair Share Act) at its core.

… so that he believes these Travelers etc. rulings do not open the way for states to be health policy “laboratories of democracy” regarding health benefits policy. Some of Motz’s arguments appear odd to me; for example, he seems to argue at length that the bill is either a tax or a fee (I think he settles on regulatory fee) — but soon thereafter asserts that “the General Assembly neither intended nor contemplated that Act would raise any revenue for the State” (since it was assumed companies would prefer to raise their health care expenditures to the 8% threshold). I hope lawyers such as Nathan Newman or publius will illuminate these arguments better than I can.

The Washington Post article reports that the law is overwhelmingly popular in Maryland, with 77% of respondents to one survey favoring it. Maryland legislators and the current Attorney General Joseph Curran appear resolved to appeal the RILA v. Fielder ruling, and AG candidate Tom Perez has expressed his strong support for the bill as well:

It is quite clear to me that the intent of this legislation was to demand action by all large, private-sector employers in our State to develop or maintain health benefits’ programs for as many employees as possible. There are many chapters left in the legal battle; we will prevail because this legislation is both legally and morally sound.

Motz’s ruling did find against RILA in one respect: the Fair Share bill did not violate equal protection guarantees by “singling out” Wal-Mart. From the ruling:

The Supreme Court has made it clear that “equal protection is not a license for courts to judge the wisdom, fairness, or logic of legislative choices.” … A necessary corollary of this principle is that legislatures are permitted the “leeway to approach a perceived problem incrementally.” [...]

…unless there is a reason to “infer antipathy” from the targeting of a particular group or person, “[t]he Constitution presumes that . . . even improvident decisions will eventually be rectified by the democratic process and that judicial intervention is generally unwarranted no matter how unwisely we may think a political branch has acted.” … It is only in cases involving politically vulnerable groups that the Supreme Court has appeared to rely, at least in part, on legislative antipathy when invalidating a law under the rational basis test.

But beyond that silver lining — such as it is — this is obviously a setback for the Fair Share idea, and one I hope is overturned as soon as possible.

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UPDATE, 7/20: a Progressive States Network bulletin comments that the Fair Share defeat may well be reversed, and in any event has little to no bearing on other approaches to the Wal-Mart issue, e.g., prevailing wage or “big box” laws. The article makes the same point I do about “singling out” not being grounds for overturning the law. Thanks, eRobin!

UPDATE, 7/25: Labor law professor Paul Secunda (”Workplace Prof Blog”) identifies the same key passage re ERISA and comments, “…is the Maryland law really focused on ERISA plans? Some would argue that the law does not directly interfere with Wal-Mart’s health care plan, but only requires it to spend a given amount of money on health care regardless of whether it has such a plan or not. My sense is that this dispute lies at the heart of this controversy over Fair Share laws.”

EDIT, 7/29: New ERISA link directly to the statute’s language, rather than to a DOL overview.

Slate has been running a fascinating debate between Barbara Ehrenreich and Jason Furman under the heading “Is Wal-Mart Good For America?” As Ehrenreich points out, it’s an odd pairing: she’s an activist and author who went ‘undercover’ to document what it’s like to work for Wal-Mart, he’s a liberal economist perhaps best known for his arguments that Wal-Mart is, indeed, good for America, and in fact particularly for the poorest Americans.

Furman’s arguments center, as they must, on the huge productivity gains due to the Wal-Mart business model, and the payouts in cheaper goods particularly for low-income Americans. In making these arguments, he ignores, as he must, that even greater productivity gains could come by simply enslaving Wal-Mart clerks and selling the tube socks they stock for a quarter and the TV sets they move from warehouse to storeroom for a buck and a half. This isn’t possible, of course — but the reason lies outside Furman’s core competence of economics, in the precise rock-bottom labor conditions Americans are politically willing to countenance.

The issue with Wal-Mart, to me, is that they have found a way to game American politics and policy by outsourcing health care costs and even living wage costs to the rest of the country by running a full-time, powerful megabusiness on part-time, powerless labor inputs. The vaunted national “productivity” gains resulting from Wal-Mart’s business model are an Enron-like accounting scam. Those gains are achieved by squashing their own labor costs and those of suppliers with both taxpayer help and illegal union-busting methods. Thus, I would argue that Wal-Mart’s economic success is in part a mirage resting on a labor market failure abetted by the NLRB, and on political failures that states like Maryland, unwilling to foot substantial health care costs by themselves any longer, are finally addressing with “Fair Share Health Care” bills.*

For her part, Ehrenreich concludes:

What is it that we really differ over? We both want higher wages and more generous government social programs; we both voted for Kerry; we’re both in the upper-middle class or pretty close. The difference, I think, lies in our mental ZIP codes. Where you see some unfortunate, but not really all that bad, numbers, I see human crises, and I see them in my extended family and my network of friends as well as in the letters I get from readers: The car that gets you to work breaks down and is going to cost $200 to repair. The baby gets sick so you miss a day’s work and face the possibility of losing your job. Your back goes out and you can’t scurry around the floor picking up tossed merchandise any more.

You’re screwed, in short, and, until we all pull together and fight like hell for a better deal, there’s no help coming.

This seemed to finally get Furman’s goat. Unable after all to let his prior response be his last, he responds (in part):

So, you want to go further to pressure Wal-Mart to raise wages and benefits, to make it a better company? If that’s all it was about, count me in. But the principal methods are preventing the spread of Wal-Mart’s benefits to new communities (like my hometown, New York City), living wages at $15 an hour, retail-specific minimum wage rules like Chicago’s and Maryland’s pay-for-play that target a single company that already provides decent health benefits.

The collateral damage from these efforts to get Wal-Mart to raise its wages and benefits is way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing “Kum-Ba-Ya” in the interests of progressive harmony. Not to mention the collateral damage to rational thought from many of the arguments made by the anti-Wal-Mart community, including the arguments I noted in my last post that undermine food stamps and the progressive taxation.

Pretty warm exit strategy there: condescending “Kum-Ba-Ya” remark — check! Opponents incapable/unwilling to engage in rational thought — check! And of course, sliding in a “decent health benefits” assertion that is all too easily refuted — there’s nothing decent about health benefits with the kind of huge deductibles Wal-Mart requires of its low pay workers.

Even were the market always right, there’s still reason to think Furman is wrong. That’s because even Wal-Mart shoppers — the purported beneficiaries of Wal-Mart’s methods — are not as on board with the country’s direction as you’d think they would be if the low, low price of underwear were the only thing on their minds. Writing at the blog “RealClearPolitics,” Ryan Sager describes the rise and possible fall of one element of Republican voting strength of the past years — “Wal-Mart voters“:

What’s Wal-Mart got to do with anything? Not a whole lot, except as a symbol of a particular type of voter: largely Southern, rural, lower-middle-class, female, socially conservative — not big fans of tax cuts, but huge fans of government programs.

Outsourcing health care to state Medicaid systems, unionbusting, and strip mining rural economies may be about to bite Wal-Mart and its political patrons right where it hurts. The shift in attitudes among these voters over the last several years has been nothing short of seismic:

Zogby finds that while 85 percent of frequent Wal-Mart shoppers voted for President Bush’s reelection in 2004 (and 88 percent of people who never shop there voted for Sen. John Kerry), Wal-Mart voters have turned on the president dramatically. In a poll taken earlier this month, they gave Bush a 35 percent approval rating — compared to a 45 percent positive rating from born-again Christians, 49 percent from NASCAR fans, and 54 percent from self-identified conservatives.

Most worrying for the GOP: Fifty-one percent of Wal-Mart voters agreed with the statement that it’s “time for the Democrats to take over and run” Congress — as opposed to just 31 percent who think “Republicans deserve to retain control.”

Assuming not all of this shift is due to closely observing Bush’s signing statements or the upsurge in Shia-Sunni tensions in Iraq, I’m guessing there’s also a bit of dissatisfaction there with this, the greatest of all possible economies. I’ll close this post by noting this dovetails nicely with observations — well, hopes — I expressed after the 2004 election, in “The road back — take on Wal-Mart“:

Wal-Mart is not just a deserving political target, but a useful one over the next four years: it was spawned in “Red State,” rural territory, and its roots remain there. To the extent Democrats and union organizers can succeed in bettering the lot of Wal-Mart workers, they will have found allies across the country, in precisely the areas Democrats need support, among precisely the working people from whom they need to earn it.

Maybe they haven’t succeeded yet with bettering the lot of Wal-Mart workers, but it seems like a lot of Wal-Mart shoppers are willing to give them a chance.

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* Maryland’s Fair Share Health Care measure calls for businesses with over 10,000 employees to either pay at least 8% of payroll to health benefits, or make up the difference with payments to a dedicated state Medicaid account.
NOTE: Sager article via Steve Benen (”The Carpetbagger Report”).

UPDATE, 7/5: Reader WorldWideWeber points out an excellent London Review of Books article about Wal-Mart, “The Price of Pickles,” by John Lanchester. But see also Jason Furman’s Wal-Mart: A Progressive Success Story to recognize again that Furman is also concerned about shortcomings of the American economy; in his view, though, singling out Wal-Mart is counterproductive.

UPDATE, 7/11: Forgot to mention I crossposted this to Daily Kos — and forgot to check back in until now. Good news: 31 comments! Bad news: many of them about Barbara Ehrenreich voting for Nader back in 2000. But not all of them are about that; at any rate, the post was recommended by quite a few people, so maybe it was also read by a lot of people.

The Minneapolis Star Tribune’s Mark Brunswick reported last Monday (”Senate unit approves ‘Wal-Mart’ health care bill“):

A bill that would require the state’s largest employers to pay health care insurance costs for their workers — commonly known as ‘the Wal-Mart bill’ — passed a Senate committee on Monday, amid concerns from groups such as the Chamber of Commerce that it would stifle job growth and do nothing to address skyrocketing health care costs.

The bill would cover only the handful of Minnesota firms with 10,000 or more employees. It would require those companies to spend on health benefits an amount equal to 8 percent of the wages it pays to its lower paid workers, or pay the difference to a state fund.

The measure, SF2672, is described prosaically and accurately as “Large employer health cost payments” by the Minnesota Senate web site. As the article points out, the provisions mirror those of the “Fair Share” bill passed recently in Maryland. Principal sponsor State Senator Becky Lourey testified that she is trying to “stop the cost shifting to the public programs.”

Ms. Lourey is also running for governor of Minnesota, although a February Rasmussen Report poll implies that she trails at least two other Democrats (State Senator Steve Kelly and Attorney General Mike Hatch) in the race to oppose Republican governor Tim Pawlenty.

Unfortunately, her “large employer health cost payments” measure also seems to face an uphill battle. The Star Tribune article says the Minnesota bill “faces an uncertain future. A similar measure failed in a House committee last week.”

A retail industry association is suing Maryland to overturn the Fair Share Health Care Act, which requires companies with over 10,000 employees to pay at least 8% of payroll in health benefits to workers and/or to a state Medicaid fund. Douglas Tallman of the Montgomery County Gazette reports:

In its U.S. District Court suit, the Retail Industry Leaders Association claims the law violates the Employee Retirement Income Security Act, or ERISA, a 1974 federal law that leaves all regulation of health benefits to Congress.

Tallman adds that RILA is also claiming that the Maryland law violates the equal protection clause of the U.S. Constitution because it allegedly singles out one company (Wal-Mart) for arbitrary treatment.

As noted here at the time, the ERISA argument was also made by the Maryland Chamber of Commerce the week of the January veto override that made the bill law. Legal experts including the Maryland State Attorney General considered the claim weak. In its coverage of the suit, the Baltimore Sun noted:

Attorney General J. Joseph Curran Jr. issued his own advice letter last month, arguing that the Maryland law did not conflict with federal rules because it does not force employers to provide a specific level of health benefits. Rather, it gave companies the option of spending a certain amount on health care or paying a tax to the state.

A 1995 Supreme Court ruling explicitly gave states more discretion in this policy area vis-a-vis ERISA, as long as specific benefits weren’t prescribed.

The “singling out” charge has also been popular, though not usually dressed up as an equal protection issue. The argument seems nonsensical to me; the Fair Share bill doesn’t target Wal-Mart by name, but by its size, just as different laws and regulations are made to apply to large vehicles than to smaller ones. Developing…

On Thursday, columnist George Will took note of the Fair Share Health Care bill becoming Maryland law last week, and as his article’s title — Shoplifting as Governance –suggests, he didn’t like it, not one little bit. After one of his standard opening gambits — beguiling the gullible with a far-fetched historical analogy from the 18th century — Will sniffs:

Maryland’s grasping for Wal-Mart’s revenue opens a new chapter in the degeneracy of state governments that are eager to spend more money than they have the nerve to collect straightforwardly in taxes. Fortunately, as labor unions and allied rent-seekers in 30 or so other states contemplate mimicking Maryland, Wal-Mart can contemplate an advantage of federalism.

Continuing, Will warns darkly:

States engage in “entrepreneurial federalism,” competing to be especially attractive to businesses. A Wal-Mart distribution center, creating at least 800 jobs, that has been planned for Maryland could be located instead in more hospitable Delaware.

That’s right — you don’t want to get into a rent-seeking contest with those guys!

Well.

Were it the case that the Wal-Mart workers showing up on Medicaid client lists were seeking, say, cosmetic surgery or crystal therapy, Will might have a bit of a point. Even though by strict free marketeer standards, even such frivolities cannot be gainsaid those who desire them, Wal-Mart might rightly protest that they shouldn’t have to foot the bill.

If, on the other hand, those workers or their family members were seeking medical care that will enable them to work productively again, then Wal-Mart has been getting quite a good deal compared to the rest of the working world. While again, by strict “greed is good” standards, we cannot begrudge the worthy folk of Bentonville a good cry as their free ride comes to an end, neither can we quite hold it to be “shoplifting” by the Maryland legislature when they essentially require some co-payment for services rendered. Think of the 10,000 employees requirement as a “means test,” and think of throwing a “welfare queen” off the dole, and perhaps we’ve reformulated things more to Mr. Will’s liking.

Speaking of rent-seeking — the “bending of public power for private advantage,” by Will’s definition a week earlier – here’s a great example noticed by Arkansas Times Blogs. As it happens, it’s right in Wal-Mart’s back yard of Bentonville, Arkansas:

Morning News reports that Bentonville is forging ahead with creation of a giant (2.8-square-mile) Tax Increment Finance District so that school taxes can be siphoned off to provide infrastructure to serve such areas as the Wal-Mart world headquarters, a world-class art museum being built with Walton money and land Wal-Mart has acquired for future development. Blight fighters at work, subsidized by taxpayers all over Arkansas.

The Morning News article explains, “A tax increment financing district temporarily freezes the amount of tax revenue that goes to schools, counties and other entities that are taxing undeveloped or blighted property within the district.” Via Facing South, where Chris Kromm adds:

Nationwide, local governments have shoveled Wal-Mart over $1 billion in public money, according to a 2004 report from Good Jobs First.

If poor, blighted Bentonville knows what it must do to stay in its master’s good graces, we must not second-guess that decision. But proud Maryland is not yet so far gone, nor may she ever be. And, as Will points out, there may be be more states like her in in the months ahead — lawmakers in 30 states are reportedly preparing legislation similar to Maryland’s. “Shoplifting as Governance”? Hardly. Rather, the days of “Freeloading as Business Model” may be drawing to a close.

The Washington Post’s headline tonight is still off by one — it’s not just the “Md. Senate Overrides Veto on ‘Wal-Mart Bill‘, but the House as well. By 30-17 and 88-50 votes, respectively, Governor Bob Ehrlich’s veto of the Fair Share Health Care bill was overridden by the Maryland legislature.

The law calls for Maryland companies with over 10,000 employees to either pay 8% of payroll to health benefits, or make up the difference with payments to a state Medicaid fund. This partly recompenses the state for the costs all too often shunted to state health care systems by low-wage, low health benefits companies like Wal-Mart.

The Post’s John Wagner captured the moment:

The bill prompted frantic lobbying in recent weeks, with unions and health care advocates airing radio and television ads and Wal-Mart running full-page ads in major newspapers. The company also bulked up its lobbying corps in Annapolis, hiring at least 12 lobbyists, whom [Senator] Pinsky derisively called the Dirty Dozen during yesterday’s debate.

The Annapolis press corps was swollen with members of the national media, and immediately after the House vote, [House speaker Michael] Busch was whisked outside the State House for a national television interview.

The whoops and cheers of advocates echoed in the vast hallway outside the House chamber. Union members and their lobbyists hugged lawmakers and posed for photos, giving a thumbs-up, some with tears in their eyes. “We prevailed. Yes!” said an exuberant Del. Veronica L. Turner (D-Prince George’s).

The party’s in full swing over at Wal-Mart Watch, Wake-Up Wal-Mart, Americans for Health Care, and elsewhere. And the victory in Maryland may be just the first of many. The New York Times’ Michael Barbaro wrote last week:

In a national campaign aimed squarely at Wal-Mart Stores, lawmakers in 30 states are preparing to introduce legislation that would require large corporations to increase spending on employee health insurance, according to the A.F.L.-C.I.O., which planned to announce the initiative this morning. [...]

Seizing on momentum from the Maryland bill, lawmakers plan to introduce similar legislation in Connecticut, Kansas, Florida, Colorado and Tennessee, among other states, according to A.F.L.-C.I.O. leaders.

“We know that Congress is not going to take action any time soon,” said Naomi Walker, director of state legislative programs at the A.F.L.-C.I.O. “So states are finding their own way to get at this problem.”

(AFL-CIO link added). The bills elsewhere will propose broadly similar provisions to the legislation passed in Maryland.

Meanwhile, a big “Well done!” to the Maryland Democratic Party for seeing this fight through and winning it. They had a lot of support, but it was Maryland’s Democratic senators and delegates who had to go ahead and vote for this. Let them know you appreciate it.

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EDIT, 1/13: Americans for Health Care and legislative history links added (click MD flag for MD Senate leg. history and link to MD House).

Maryland’s Fair Share Health Care Act, passed last year, promised to require companies with over 10,000 employees in the state to pay at least 8% of payroll for health insurance, or pay the shortfall into the state’s Medicaid fund. The only company in the state that’s likely to be affected is Wal-Mart; while other large employers like Northrop Grumman and Johns Hopkins University pay decent health benefits, Wal-Mart — by its own admission — does not. From an internal memo leaked in December:

Wal-Mart’s critics can easily exploit some aspects of our benefits offering to make their case; in other words, our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance. [...]

In total, 46 percent of Associates’ children are either on Medicaid or are uninsured

Republican Governor Ehrlich vetoed the bill in May — in a notably disquieting scene in the Eastern Shore town of Princess Anne, with high ranking Wal-Mart executive Eduardo Castro-Wright delightedly looking on as protesters were literally silenced and forbidden to display signs by the local sheriff.

Now the long-awaited attempt by the Maryland legislature to override that veto is finally at hand. In December, the Washington Times’ S.A. Miller reported:

“The House leadership is considering the bill one of the top priorities, if not the top priority,” said [House Majority Whip Anthony] Brown, a Prince George’s Democrat who is also the running mate of gubernatorial candidate Baltimore Mayor Martin O’Malley. [...]

Mr. Brown said he was “pretty confident” the General Assembly leadership will secure the requisite 85 House votes to override the Wal-Mart veto when the session convenes Jan. 12.

Sen. Andrew P. Harris, a Baltimore County Republican and the minority whip, expects the veto also to be overridden in the Senate, despite “having every Republican supporting the governor.”

The latest volley in the debate has come from the Maryland Chamber of Commerce, which released a legal opinion last Wednesday that the bill conflicts with the federal Employee Retirement Income Security Act (ERISA). Maryland Gazette.Net’s David Tallman explains:

Under ERISA, the federal government prevents states from requiring employers to provide a certain level of benefits.

“It has a fairly sweeping pre-emption to any state legislation covering employee benefit plans,” said Ronald W. Wineholt, the chamber’s vice president for government affairs.

Not everyone agrees:

Phyllis C. Borzi, who teaches law at the George Washington University Medical Center, said Smith’s analysis would have been valid 10 years ago, but since a 1995 decision, the Supreme Court has given states more control in regulating employee benefits.

Unless state laws specifically prescribe the kinds of benefits, they will not be pre-empted by ERISA, Borzi said.

So suddenly we’re for national employee benefit standards, are we? Let’s check back with the Maryland Chamber of Commerce when a national health care debate gets back in the headlines. The same warning can be given to Governor Ehrlich, who’s criticizing the Act as a new business tax. Yet it’s one that will be a drop in the bucket (politically, if not financially) compared to a national health care system — the chief alternative for providing decent, paid-up health care for those 46% of Wal-Mart “associate” kids. Assuming, for the sake of argument, that Ehrlich and his pals give a damn about them in the first place.

Don’t get me wrong — like Mark Schmitt, I’d prefer a national health care system to a patchwork, Rube Goldberg scheme stitching together Medicaid, employer based benefits, and the rest of it. But I don’t support making the perfect the enemy of the good. And as Schmitt observes, “You only get political consensus for public benefits when there’s pressure for employer-based benefits.”So in the meantime, I want the Fair Share Health Care bill. The Chamber of Commerce may hate it, but not all businesses do; one of the major reasons the bill passed was that Giant Foods CEO Dick Baird supported it — it levels the playing field between his company, paying decent wages and benefits, and the Medicaid-freeloaders at Wal-Mart. Public subsidies for working Americans should not be allowed to result in competition-altering wage and benefit pressures on unionized companies.

You can support the Fair Share Health Care bill by sending an e-mail to Maryland delegates and state senators via Maryland for Health Care.

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UPDATE, 1/9: Wake-Up Wal-Mart provides links to Maryland legislators:

UPDATE, 1/12: Washington Post: Md. Senate Overrides Veto on ‘Wal-Mart Bill’. YAY!

The Washington Post’s “unalloyed joys of globalization” cheerleader Sebastian Mallaby gives it the old college try with “Progressive Wal-Mart. Really.” but swings and misses early:

There’s a comic side to the anti-Wal-Mart campaign brewing in Maryland and across the country. Only by summoning up the most naive view of corporate behavior can the critics be shocked — shocked! — by the giant retailer’s machinations. Wal-Mart is plotting to contain health costs!

But what Mallaby calls “containing health costs” is Wal-Mart’s campaign to avoid paying its fair share of its workers’ health care costs — instead of fobbing off that expense on the rest of us.

More substantively, Mallaby claims to refute that Wal-Mart is bad for poor Americans by citing studies that Wal-Mart’s low prices dwarf the economic costs of wage suppression — for which he cites Wal-Mart critic and UC Berkeley economist Arindrajit Dube’s estimate of $4.7 billion. Citing a New York University economist — supposedly inoculated from criticism as an ex-advisor of John Kerry — Mallaby asserts that food discounts alone “boosts the welfare of American shoppers by at least $50 billion a year,” and goes for broke claiming that the “savings are possibly five times as much if you count all of Wal-Mart’s products.” Who knows? The savings are possibly 100 times as much, or 1.09 times as much.

Max Sawicky points out that Mallaby has quietly changed the subject with the $50 billion figure to the aggregate price benefits — to poor, rich, and in-between alike. Mallaby later at least acknowledges those silly federal programs for the needy are “better targeted.” And Mallaby himself also acknowledges — well downstream of the original use of the figure — that the $4.7 billion in lost wages are data cherry-picking too: the figure focuses entirely on Wal-Mart, not on its suppliers.

There are similarly disingenuous arguments to come on the issue of Wal-Mart’s parasitism of the public health care system, such as it is:

Moreover, it’s ironic that Wal-Mart’s enemies, who are mainly progressives, should even raise this issue. In the 1990s progressives argued loudly for the reform that allowed poor Americans to keep Medicaid benefits even if they had a job. Now that this policy is helping workers at Wal-Mart, progressives shouldn’t blame the company. Besides, many progressives favor a national health system. In other words, they attack Wal-Mart for having 5 percent of its workers receive health care courtesy of taxpayers when the policy that they support would increase that share to 100 percent.

Of course “progressives” want poor people to have means-tested Medicaid benefits, whether they’re employed or not. That doesn’t mean they want people to be poor the way Wal-Mart’s unionbusting, timeshaving practices guarantee they will be. And it especially doesn’t mean they are compelled to welcome the nation’s largest employer gaming the system to give itself an advantage over “chump” companies that go ahead and pay for more decent health care.

The “national health care” argument, meanwhile, has been made by better (and less disingenuous) critics than Mallaby. To the honest proponents I say, fine, this may all be moot someday when there’s a national health care system in this country. And to Mallaby I say, we can surely count on your vigorous help with that, right? I didn’t think so.

Mallaby’s piece eventually boils down to a profession of his faith, and an appeal to the reader’s avarice:

But globalization and business innovation are nonetheless the engines of progress; and if that sounds too abstract, think of the $200 billion-plus that Wal-Mart consumers gain annually. If critics prevent the firm from opening new branches, they will prevent ordinary families from sharing in those gains. Poor Americans will be chief among the casualties.

Mallaby may have indeed shed some big, wet, crocodile tears at this point. But the rest of his argument makes it clear poor Americans rank somewhere between last and dead last on his list of concerns. The fundamental weakness of the price vs. wage tradeoff is that it’s so easy to see where it leads — both in China and in Wal-Mart-Land: to a kind of new sharecropping, wage slave, company store economic system where workers are too poor to afford anything but lowest prices, and too beaten down to be able to turn down any but the lowest wages and ‘benefits.’ As publius (”Legal Fiction”) pointed out a few weeks ago:

My point, though, is that citing lower prices alone is never sufficient to win the debate. As I said, it’s relevant, but never dispositive. That’s because there is a limit to what we will accept (morally) in exchange for low prices. So, whenever you hear that a practice lowers prices, there is always a necessary follow-up question – At what cost?

For instance, let’s say that China (or Wal-Mart) used slave labor to make its clothes. The clothes would certainly be cheap, but we wouldn’t accept them because the low cost was a direct result of morally reprehensible slavery. In this case, low prices would not justify the practice.

Slavery is of course an extreme example. In reality, questionable employment practices exist along a spectrum. While we can all agree on rejecting low prices caused by slavery, surely that is not the only place to draw the line. For instance, what about low prices caused by child labor? By 7-day, 14-hour workweeks? By practices that release mercury into the ocean? And so on.

Mallaby’s dubious assignment of Casablanca’s “Captain Reynaud” role (“shocked — shocked!”) to Wal-Mart critics seeks to accomplish the dual goal of making critics seem hypocritical and Wal-Mart a comparatively honest, if perhaps rough hewn (“not saints”) practitioner of real world global capitalism.

Let me return the favor: in this little set piece, Mallaby — who, as a guaranteed winner, can afford to be relaxed about the globalization sweepstakes — seems closer to Peter Lorre’s Ugarte, the “gambler” who has, ahem, come into the only pair of tickets out of town. You remember: the one who asks Bogart, “You despise me, don’t you?” To which Bogart replies, “if I gave you any thought I probably would.”

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UPDATE, 12/1: Yglesias disappoints on the subject, Sirota spanks him for it. An earlier Yglesias post shows he’s not altogether off in right field: he seems to wish the debate were about unionizing Wal-Mart per se, which he supports, not about Wal-Mart paying welfare/Medicaid-worthy wages, which he somehow doesn’t see as the flip side of the same point.

Keeping up with the Walton empire is at least a part time job these days. Below are links to a few Wal-Mart posts of mine, followed by miniposts about recent relevant news items.

Time shaving: a shameful pattern of corporate theft, April 4, 2004 — Excerpt from an interview released in mid-October with Weldon Nicholson, a 17-year Wal-Mart veteran and General Manager for a Sam’s Club outlet, in “Wal-Mart: The High Cost of Low Price”:

I’ve seen managers go in when someone worked 41, 42 hours, and change it to 40 hours. I never directly authorized anybody to do that, but I turned my back whenever I saw someone do that.. and that’s just as bad.

If i was a devil’s advocate, I’d say, nobody made you do those things, no one told you to do those things. Well if that’s true then why have I worked with all these people all these years and they all think like me, and feel like me, and feel the same pressures, and are doing the same things?

People are transferring from other states and I’d catch them shaving payroll. Now, you think that was an isolated incident…it might be, if it was one of your managers doing it. But if you have eight and they are all talking about doing it, all coming from different district managers, different states, different stores. How would they all know about it, and know how to do it?

I’m not the only one who did it. I’ve seen every manager except for one general manager do it.

You can watch the interview, or simply buy the movie.

If you can’t guard the henhouse, join the foxes, February 18, 2005 — Steve Greenhouse of the New York Times reports (”Labor Dept. Is Rebuked Over Pact With Wal-Mart“, 11/2/05):

The Labor Department’s inspector general strongly criticized department officials yesterday for ’serious breakdowns’ in procedures involving an agreement promising Wal-Mart Stores 15 days’ notice before labor investigators would inspect its stores for child labor violations.

The report by the inspector general faulted department officials for making ’significant concessions’ to Wal-Mart, the nation’s largest retailer, without obtaining anything in return. The report also criticized department officials for letting Wal-Mart lawyers write substantial parts of the settlement and for leaving the department’s own legal division out of the settlement process.

I first read about this news via Gary Farber, who points out (with regret) that for all the talk of rebuke, the inspector found nothing illegal about the agreement. Wal-Mart made the same point (with satisfaction).

The 2/18 “newsrack” post noted a dispute between Congressman Miller and the Department of Labor’s (DOL) Victoria Lipnic about whether the agreement was limited to child labor inspections. While the DOL’s Employment Standards Administration (ESA) continues to dispute the finding, the Inspector General’s office (OIG) considered their view and rejected it: “We continue to maintain that the plain language of the advance notification clause applies to any potential violation, not just child labor violations.” So ESA got rolled, and no wonder: “Lack of a formal process for developing agreements with employers resulted in Wal-Mart attorneys authoring key provisions of the Wal-Mart agreement.”

The OIG is not rescinding the agreement, but believes it has instituted oversight mechanisms that will prevent such poor agreements in the future. Let’s hope that includes firing the people at ESA who were responsible for this one.

Wal-Mart union-busts Canadian outlet, February 14, 2005 — New York Times, 9/20/05: Quebec panel rejects Wal-Mart store closing:

The labor relations board in Quebec has rejected Wal-Mart Canada’s assertion that it closed a unionized store in that province for economic reasons, saying there was evidence the store might reopen.

In a decision released late last week, the board said had not found the closing of the store in Jonquière, Quebec, in April to be “real, genuine and definitive” under the province’s law. The decision means the company could be fined and compensation ordered for about 190 former employees.