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Maryland Malfeasance

Maryland has now passed legislation (overriding Governor Ehrlich’s veto) requiring large employers to spend at least 8% of their payroll costs on health care or pay money into the state’s coffers.  Only Wal-Mart will be affected by this requirement.

You can spend a semester on why this legislation is likely to hurt poor people and low-skilled workers.  This unsigned Washington Post editorial gets it right:

The Maryland bill is a legislative mugging masquerading as an act of
benevolent social engineering. It is true that skyrocketing health care
costs and the growing ranks of uninsured workers represent a burden on
the state’s health system that other corporations in effect help
subsidize. But Wal-Mart employees, like the employees of other large
retailers that employ many low-wage workers, are only slightly more
likely to collect Medicaid benefits than the national average. And
unlovable as it may be, Wal-Mart serves low- and middle-income people,
both by creating entry-level and part-time jobs for people who might
otherwise be unemployed and by saving its moderate-income customers a
staggering amount of money.

The legislation has prompted
imitators in 30 states. Where it passes, no one should be surprised by
unintended consequences. Wal-Mart and other targeted firms may shift
jobs or planned facilities elsewhere. Many low-wage younger workers may
still opt out of health coverage even if offered a more generous plan.
In trying to address the national problems of health care and uninsured
workers, lawmakers in Maryland and other states could inflict on
themselves a new set of problems while failing to solve the underlying


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