A Washington Post editorial discusses a proposed Maryland statute that would force Wal-Mart to spend more on health insurance for it's workers. The editorial suggests the state legislature is likely to pass the bill. One of the concerns voiced by the editorial is that the statute would force only this one employer, Wal-Mart, to increase spending. This seems a valid concern.
Whether only one employer is forced to increase specific employee benefits, or all employers are so coerced, what might economics tell us about the consequences of such a law? The state legislators who support the proposed bill are likely to tell us they seek to make things better for the state's workers by helping them to be better able to obtain health insurance. Do we expect their goals to be achieved? Are there likely to be unintended consequences that should lead the lawmakers to doubt the wisdom on the proposed statute?
Doesn't it seem that forcing employers to pay more for employee benefits is very much like imposing a minimum wage? After all, the statute would seem to be increasing what an employer has to pay to hire another hour of labor. If this makes sense, then wouldn't we predict that the results of making this proposal a law would be that Wal-Mart would want to reduce the amount of labor employed? And, wouldn't Wal-Mart hiring less labor mean that while some workers might be better able to afford health insurance, there would be other workers who were less able to afford health insurance? Would you predict other inintended consequences? What might happen in the long run? Would Wal-Mart want to decrease payments to other types of employee benefits? Could there be an impact on the ability of Wal-Mart employees to be successful in their efforts to unionize?
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