Economics 101

As hereinbefore noted, Governor Corzine, in his inaugural address, lamented that we are creating (relatively) low wage service jobs instead of high paying jobs. Come now the Democrats to wage war against this disparity by adopting policies designed to ensure that we won’t be creating any service sector jobs, either.

Popularly known as the Walmart bills, one such iteration can be found as S-477 .The sponsors assert that large retailers, by paying "substandard wages and benefits" create "destructive competition", forcing other employers to cut prices, thereby producing an "adverse economic impact".

In simple terms, the Democrats seek to liberate the people from the tyranny of low prices.

This proposal represents the latest effort by Big Labor to obtain through legislation that which it failed to obtain at the bargaining table.

Supporters of the bill speak in terms of helping poor, exploited Walmart workers; nothing could be further from the truth. (Of the hundreds of E-mails I received on this subject, not a one came from a Walmart employee) Nothing would please Big Labor more than if Walmart ceased to exist. Some statistics demonstrate that a local Walmart reduces prices 8%. That’s SERIOUS money to Walmart shoppers. But it presents a huge threat to high cost competition.

Consider a personal anecdote: Yesterday, Chunky Soup at Walmart cost $1.50. It’s generally about $1 more at the local Acme. For the folks who clip (bond) coupons, $1 represents a piddling sum; they can afford to shop at Kings. For the masses who clip (grocery) coupons to save a few bucks, the $20 they save shopping at Walmart makes a HUGE difference.

To unionized workers, other folks willing – nay, EAGER – to work for less presents quite a difficulty. Most folks prefer to pay $1 less per pound for hamburger, using the money for their own families, rather than put it toward a highly paid unionized worker’s family. Such is the nature of competition; high cost providers ALWAYS face the possibility that someone might undersell them. This has Big Labor worried.

In my trips to Walmart, I have yet to witness a single worker shackled to a register, menaced by the bondsman’s whip. Given the choice between $10 (or so) per hour, and $0 per hour unemployed (or whatever the competition might be paying) they choose to work at Walmart. Not one of Walmart’s customers entered under duress. The employees work there – presumably – because they want to; the customers shop there because they get the best value for their dollar.

Can’t have that, says Big Labor. It’s not fair, they contend, that Walmart doesn’t (always) pay the same wages and offer the same benefits that union members won at the bargaining table with other employers. Instead of making their case to Walmart employees – who repeatedly reject union entreaties – they take it to sympathetic legislators.

Big Labor labors under no illusions about the results of this legislation; it cripples low cost competitors (depriving many Walmart employees of their jobs. The utter lack of concern about this possibility from the advocates of the proposal speaks volumes) and raise prices for everyone. That’s precisely what the unions want: their members would benefit at the expense of the buying public and (former) Walmart employees. Having priced themselves out of the free market, Big Labor seeks legislation to ensure that the market ceases to be free.

The complete absence of compassion for those who would lose their jobs, and for the mass of people who would pay dramatically higher prices, makes perfect sense for Big Labor. Unions serve their membership, not the public. If doing so costs non-union members a great deal of money, that’s a price that Big Labor is more than willing to make you pay. It’s certainly not evil; unions exist to fatten their members’ wallets.

But Legislators don’t. This demonstrates one of the central difficulties with an activist government. Monied interests ALWAYS have greater access to legislators, and greater interest in anti-freedom, rent-seeking, big government programs. Big Labor has a huge stake in killing off the free market and preventing competition. Its membership is focused and motivated. Its PACs are well funded, its lobbyists well attuned to the campaign cycle.

So, who speaks for the little guy? Who represents the Walmart employee, whose $10 per hour job pays better than anything else he’s ever had, or may ever get? Who speaks for the masses of Walmart customers? Not the Democrats, certainly. As between the little guy – the customers struggling to get by and the workers who apply for Walmart jobs in droves – and Big Labor, the Dems side with the money guys. They KNOW that if this bill passes, hundreds if not thousands of Walmart employees will lose their jobs. The KNOW that prices will go up substantially for the "little guys" who shop at Walmart.

And they simply don’t care.

In Maryland, where the Legislature foolishly adopted this proposal, Walmart put two distribution centers on indefinite hold, costing hundreds of permanent jobs and tens of millions in construction. In Chicago, where the City Council refused to permit a Walmart, the store simply relocated over the City line, so that the jobs and tax revenues go to a neighbor. Some 25,000 people applied for roughly 350 jobs.

That particular precedent should give us pause. The Delaware makes for a poor rampart. Indeed, the only folks who would receive a concrete, long term benefit from this sort of economic kamikaze mission live (or sell real estate) in Pennsylvania, to which an ever expanding segment of the NJ population will flee to shop, work, and – perhaps – live, escaping muddle-headed policies adopted by a pandering Legislature.

And Governor Corzine’s problems will be solved: no jobs of any kind will be created – save, perhaps, those in favored industries onto which he would lavish taxpayer subsidies.

Errata. At the bottom of the Governor’s website is a small blurb proclaiming, "It’s tax season!" This portent of things to come even before the Governor’s budget address!