Why Wal-Mart Supports an Employer Mandate

wal-mart-logoA couple of years ago, I shared a cab to the airport with a Wal-Mart lobbyist, who told me that Wal-Mart supports an “employer mandate.”  An employer mandate is a legal requirement that employers provide a government-defined package of health benefits to their workers.  Only Hawaii and Massachusetts have enacted such a law.

I couldn’t believe what I was hearing.  Wal-Mart is a capitalist success story.  At the time of our conversation, this lobbyist was helping Wal-Mart fight off employer-mandate legislation in dozens of states.  Those measures were specifically designed to hurt Wal-Mart, and were underwritten by the unions and union shops that were losing jobs and business to Wal-Mart.

But it all became clear when the lobbyist explained the reason for Wal-Mart’s position: “Target’s health-benefits costs are lower.”

I have no idea what Target’s or Wal-Mart’s health-benefits costs are.  Let’s say that Target spends $5,000 per worker on health benefits and Wal-Mart spends $10,000.  An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart.  But it would cripple one of Wal-Mart’s chief competitors.

So yesterday’s news that Wal-Mart is publicly endorsing a “sensible and equitable” employer mandate – i.e., a mandate that hurts Target but not Wal-Mart – didn’t come as a surprise to me.  It merely confirmed what I learned in a cab on the way to the airport: Wal-Mart has gone native.  That great symbol of the benefits of free-market competition now joins its erstwhile enemies among the legions of rent-seeking weasels who would rather run to government for protection than earn their keep by making people’s lives better.

In 2007, Wal-Mart officially joined the Church of Universal Coverage when it entered one of those countless strange-bedfellows coalitions with the Service Employees International Union.  At the time, I criticized Wal-Mart for “self-congratulatory puffery” and “jump[ing] on the big-government bandwagon.”  I also criticized then-CEO Lee Scott for spouting economic nonsense.  (I later learned that Scott was not amused.)

This is so much worse than that.