It’s hard to run a grocery store especially when others do it better than you do. So what’s an ailing chain to do? There’s trying harder, but wouldn’t it be nicer not to have to? It’s so much easier to try and handicap your competitors—you know, threaten to break their knees with baseball bats, set fire to their stores, intimidate their customers. Alas, these techniques are illegal, so the safest strategy is get politicians to handicap your competitors. This seems to be the strategy being pursued by Giant Foods in Maryland.
I blogged previously about how Giant has used the Montgomery County Council to make it harder for competitors to do business in Montgomery County, just outside of Washington, DC. I guess that isn’t enough. Now Giant and its friends have decided to legally handicap Wal-Mart throught the state of Maryland. The Washington Post (rr) reports on legislation coming up for a vote in the Maryland General Assembly:
Although the legislation before the General Assembly does not name
Wal-Mart, it appears to be the only company affected by it. The bill
would require organizations with more than 10,000 employees to spend at
least 8 percent of their payroll on health benefits — or put the money
directly into the state’s health program for the poor.
In addition to Giant, the coalition backing the Maryland bill includes
the United Food and Commercial Workers Local 400, which represents
Giant’s Washington area workers. Both Giant and Local 400 have cited
increasing competition from Wal-Mart and other nonunion retailers as
the impetus for proposed benefit cuts.
Giant Vice President Barry F. Scher said that health
care costs now account for 20 percent of Giant’s payroll expenses. By
comparison, Wal-Mart spends between 7 and 8 percent, Hurst said.
Which raises the question: how does Wal-Mart manage to attact any employees? There are thousands and thousands of jobs in Maryland outside of Wal-Mart. Given how poorly Wal-Mart allegedly treats its workers, how does the company ever manage to attact employees and keep them?
Scher said Giant is not singling out Wal-Mart. "We
believe there should be a level playing field for every employer in the
state," he said. "When that does not happen, we all shoulder the cost
of the uninsured."
C. James Lowthers, president of Local 400, said the debate "is about what’s right for the country."
That’s a comfort isn’t it? Glad to know it’s not about self-interest, Mr. Lowthers.
Ironically, if this bill passes it will hurt workers by lowering the demand for their services. It will hurt consumers who will end up paying higher prices for groceries. It will help Giant and its unions.
Maryland Senate President Thomas V. Mike Miller Jr. (D-Calvert) said lobbying on the issue from labor groups was "very light."
Oh, right. They don’t really care. It’s not that important. Nooooo.
"It’s an issue that’s been around for a while, and all
of us recognize that Wal-Mart doesn’t do right by its employees,"
Great insight, Senate President Miller. Thank you for insulting the employees who choose to work at Wal-Mart for reasons you cannot decipher. Thank you for making it harder to operate a business and hire employees in our state. Thank you for making people’s lives harder by making food more expensive. And most of all, thank you for encouraging other businesses to turn to you rather than trying harder as a way of staying in business.
Here is Senate President Miller’s homepage. Feel free to let him know (politely) via phone or email what you think of his views. The PR office for Giant is
301-341-4710. If you are a customer, you might let them know (politely) what you think of their political strategy. If you live in Maryland, you can find your State Senator here.
UPDATE: According to this story in yesterday’s Washington Post, the bill has already been approved. Today’s Post story linked above says it’s nearing approval. HT to Arnold Kling at Econlog. Turns out it has been approved by the House and Senate but the two versions have not been reconciled and sent to the Gov.