There's nothing I'd like more than to ride to the defense of legislation requiring employers to provide a minimal level of health insurance for all employees. But the "get Wal-Mart" bill just approved by the Maryland legislature is a metaphor for much that is wrong about public policymaking in this country.
The legislation, if it survives a veto by the governor, would have virtually no effect in reducing the number of Marylanders without health insurance. Nor would it reduce the $400 million in "free care" for the uninsured, whose cost is borne by taxpayers and responsible companies that purchase health insurance.
Despite the widespread belief that Wal-Mart offers no health benefits, the company says it is, at most, one percentage point away from the bill's requirement that the largest employers spend at least 8 percent of their payrolls on health insurance. About 80 percent of Wal-Mart's hourly employees are eligible for coverage and about half choose to take it -- not ideal, but fairly typical for the retail trade.
In truth, this was a purely symbolic effort driven by the desire of Democratic politicians to demonstrate solidarity with union workers who see Wal-Mart as a threat to wages and benefits that have risen to uncompetitive levels. We know this because Wal-Mart is the only company affected by the bill. Various provisions ensure that the legislation would never affect the likes of Northrop Grumman or Johns Hopkins University.
We also know it because the legislation was crafted to have no effect on the roughly 450,000 private-sector workers in the state -- better than one in five -- that work at companies with fewer than 10,000 employees and have no company health coverage.
If, as a society, we decide that everyone ought to have health coverage within the context of an employer-based system, it is a mystery to me why anyone thinks small businesses should be exempted. There is no evidence that they are less profitable than big businesses, or that their employees are healthier or less deserving of coverage. And if, as boosters claim, small businesses are creating all the new jobs, it hardly makes sense to exempt them.
In fact, small businesses are not creating all the new jobs. What is true is that while small businesses, taken as a whole, create more jobs than they destroy each year, big businesses, taken as a group, are downsizing. One reason for that is that big companies have found it cheaper to outsource various functions to smaller firms. In many instances, the smaller companies can do the work for less because they scrimp on health benefits.
That's why any serious attempt to "level the playing field" has to apply to all firms, regardless of size. It's all well and good for Democratic gubernatorial hopefuls Doug Duncan and Martin O'Malley to burnish their labor bona fides by working the phones for passage of the "fair share" bill. But I find it more revealing that neither is willing to take on the small-business lobby and extend the provision to companies of all sizes.
Of course, the only reason the Maryland legislature got involved in this issue in the first place is because the federal government has done bupkes about falling health coverage and rising health costs. Any state that imposes a serious employer mandate (Maryland's is not) would soon find itself at a competitive disadvantage in attracting and retaining jobs. This is a national problem requiring a national solution.
I also doubt that local politicians would be so eager to join efforts to contain and punish the country's largest employer if the National Labor Relations Board hadn't effectively abolished the right of Americans to join labor unions. Wal-Mart is hardly the only company to thumb its nose at the Wagner Act, but it is one of the biggest and most brazen in its anti-union techniques. If faced with a credible threat that employees might unionize, Wal-Mart would have no choice but to offer better wages and health benefits. And unions could spend their time organizing workers and negotiating contracts rather than having to resort to political retribution in the form of restrictive zoning ordinances and punitive employment laws.
Steven Pearlstein can be reached at pearlsteins@washpost.com.
