Tuesday, April 12, 2005

So What Is The *Right* Solution?


In the vein of many bloggers, the Washington Post recently took Maryland to task for passing a tax - which was in essense a tax on Walmart - to coerce the retail giant to offer more insurance benefits to its workers. The Post's assessment? "Right problem, wrong solution. In acknowledging the problem, the Post writes:
Wal-Mart, an unlovable colossus, has more than 15,300 full- and part-time employees at its 52 stores in Maryland, many of them paid a good deal less than $10 an hour. Partly as a result of those modest wages, about half the workers opt out of a company health plan that requires them to contribute premiums and deductibles, reducing their take-home pay. When they get sick or hurt, the cost is borne by emergency rooms or by the state's taxpayers (including Wal-Mart's own unionized competitor, Giant Food Inc. ) in the form of Medicaid.
And sure, if the Post were a blogger, it might be reasonable for it to stop there. But the Post is supposedly something more significant than a weblog, and thus it seems that it should have offered both a better analysis, and possibly even its thoughts on what might constitute the right solution.

Many people look at "big box" retailers like Walmart and recognize that they receive enormous indirect subsidies from the state, including road expansions to help ferry the massive customer traffic they require to support their floor space and inventory. Such retailers also often get tax incentives and subsidies for locating their stores in certain areas. But that's peripheral to the health care issue. The Walmart employees at issue do not receive sufficient wages to purchase meaningful health care coverage for themselves and their families, apart from any group plan offered by Walmart. If Walmart fails to offer health care coverage, or makes the worker's contribution unaffordable, it follows that the workers will be without coverage. It also follows that an uninsured worker making $8-$10 per hour will have great difficulty paying a significant medical bill. Thus, the question becomes, who should pay the bill?

The State of Maryland has, through this legislation, suggested that it is more fair for the employer to pay the bill - whether through payments to the state which help offset the cost of providing that care, or through greater health care coverage for its employees - than it is for other taxpayers, or for businesses which already do provide reasonable health care coverage to their employees. The Post disagrees, but has no further answer.

The Post's rationale - that if you force a Walmart-type retailer to make adequate health insurance available to its employees, you will encourage it to set up shop elsewhere - also applies to any other means of paying for the uninsured health care. A general business tax, affecting those businesses which already do provide adequate health care, would be a disincentive to locating in the state and would also place an unfair burden on responsible businesses. Continuing to ask the people of Maryland to subsidize the health care of Walmart's workers seems unfair, and higher sales or income taxes can also serve as a disincentive to businesses considering locating within a particular state. What's left - deficit spending?

Yes, the Maryland bill is ungainly, and focuses unduly on Walmart as opposed to the many other employers in the state which also fail to provide sufficient medical coverage to their employees. But it would be nice if the Post would propose something more in the way of a possible solution, or even a possible step forward, instead of its declaration of "wrong solution".

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