NCPA - National Center for Policy Analysis


February 28, 2008

Last year, along with Democratic co-sponsors Sherrod Brown and Dick Durbin, Sen. Barack Obama laid out a plan for favoring "patriotic" companies.  Unfortunately, if elected to the presidency, he'd bring the program to the White House, says the Wall Street Journal.

The legislation takes four pages to define "patriotic" companies as those that:

  • Pay at least 60 percent of each employee's health care premiums and have a position of neutrality in employee union organizing drives.
  • Maintain or increase the number of full-time workers in the United States relative to the number of full-time workers outside of the United States.
  • Pay a salary to each employee not less than an amount equal to the federal poverty level and provide a pension plan.

In other words, a "patriotic employer" is one which fulfills the fondest Big Labor agenda, regardless of the competitive implications, says the Journal.  The proposal ignores the marketplace reality that businesses hire a work force they can afford to pay and still make money.  Coercing companies into raising wages and benefits above market rates may only lead to fewer workers getting hired in the first place.

Put another way, U.S. companies would suddenly have to pay a higher tax rate than their Chinese, Japanese and European competitors, says the Journal.  According to research by Peter Merrill, an international tax expert at PricewaterhouseCoopers, this change would "raise the cost of capital of U.S. multinationals and cause them to lose market share to foreign rivals."  Apparently Obama believes that by making U.S. companies less profitable and less competitive world-wide, they will somehow be able to create more jobs in America.

Source: Editorial, "Obama's 'Patriot' Act," Wall Street Journal, February 27, 2008.

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