NCPA - National Center for Policy Analysis


April 18, 2005

Wal-Mart's aggressive pursuit of its low-cost, low-price business strategy makes the company game for prosecutors, legislators and union organizers aiming to protect their turf. But, says USA Today, some of the company's antagonists have come up with a new tactic that reaches too far: Using the law to impose business costs on Wal-Mart to protect competitors.

  • Encouraged by Wal-Mart's top grocery competitor and its union, the Maryland Legislature passed a bill last month requiring companies with more than 10,000 employees to spend at least 8 percent of their payroll on health care or contribute to the state Medicaid program.
  • Wal-Mart is the only company affected; Maryland's governor plans to veto the bill, but the legislature may override.
  • Essentially, the legislation punishes Wal-Mart for its success; the tactic also invites wider abuse; for instance, favoring businesses that make large campaign contributions.

More effective tools are available to address the issues Wal-Mart provokes, says USA Today:

  • Zoning laws are the most common; many communities have used them to ban "big box" retailers such as Wal-Mart in order to maintain a community's character.
  • When presented on the ballot as referenda, voters' choices vary; they turned down new stores or expansion plans in Inglewood, Calif., and Hudson, Ohio, while approving plans for a new store in Belfast, Maine, and expansion in Bennington, Vt.

If legislators think workers deserve more pay or benefits, they can pass new minimum wage laws, make union organizing easier or mandate benefits for all employers. Singling out one company solely to help competitors is a mistake. Rather than demand special protection, Wal-Mart's competitors need to figure out how to exploit its weaknesses or imitate its success, says USA Today.

Source: Editorial, "Wal-Mart foes go one too far; Laws that penalize only retailing behemoth are unfair, invite abuse," USA Today, April 18, 2005.


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