Labor's War on Wal-Mart Costly to the Poor

Discussion in 'Politics' started by carpro, Jan 26, 2006.

  1. carpro

    carpro
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    http://www.opinionjournal.com/cc/?id=110007871

    Hard Line State
    Big Labor's war on Wal-Mart claims casualties among poor Marylanders.

    BY STEVE H. HANKE AND STEPHEN J.K. WALTERS

    EXCERPT

    Unfortunately, in Somerset, the new law looks more like a body blow than a "swipe." The rural county is Maryland's poorest, with per capita personal income 46% below the state average and a poverty rate 130% above it. Somerset's enduring problem is weak labor demand that greatly limits its 25,250 residents' economic opportunities.
    There are just 0.8 jobs per household in Somerset, barely half the 1.5 figure that applies to the rest of the state. Somerset's top 10 list of employers features sectors like food services (average annual compensation per employee: $9,637), poultry and egg production ($14,320) and seafood preparation and packaging ($19,190).

    It is hard to exaggerate how much the planned distribution center might have meant to Somerset's economy. Using an input-output model, we forecast the "ripple effects" of the new income and spending that could have emanated from Wal-Mart's facility as follows:

    • The center's 800 employees would have created an additional 282 jobs among "upstream" suppliers and "downstream" retailers and service establishments; all told, the center would have boosted county employment by 14% and private-sector employment by 20%.

    • Total annual employee compensation in Somerset would have risen by $46.5 million, or 19%.

    • Annual output (or "gross county product") would have risen by $128.3 million, or 19%.

    • State and local tax receipts would have increased by $19.2 million annually; this would include $8.5 million in property taxes, $5.6 million in sales taxes, and $1.4 million in personal income taxes.

    Those losses, though dramatic, probably understate the full extent of the damage in this case. They do not include forgone employment and income from construction of the facility and related infrastructure improvements. What is more, Wal-Mart's tentative plans for a second distribution center in Garrett County, in mountainous western Maryland, also appear dead. Garrett, with a poverty rate that is 70% above the state's, is only slightly better off than Somerset.
     
  2. elijah_lives

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    Excellent article in today's Wall Street Journal. This misguided attempt by labor unions and vote-buying politicians has cost Maryland hundreds of jobs, with more in the pipeline. Would you want to plant a business in such a nasty environment? Not me. I used to live in Indian Head, MD (EOD School), and deliberately moved to and commuted from Virginia, rather than support the State of Maryland.

    Those counties are out in the cold, now.
     
  3. OldRegular

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    Sadly these poor people will probably blame it all on President Bush. Perhaps the Bush Bashers on this Forum will also do so.
     
  4. StraightAndNarrow

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    Actually, I blame it on the unions. There was a time in the U.S. when unions served a useful purpose. This was back when there really were management abuses and laborers had to work in unsafe conditions. Now, unions are an anachurism. They strangle companies and make the U.S. unconpetitive in the world. Union employees regularly get better treatment than low level management people for benefits, layoffs, and pensions.

    I think most unions should be busted with the exception of unions representing hazardous jobs like coal mining.
     
  5. KenH

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    This situation in Maryland is a good example of why federalism is so important.
     
  6. carpro

    carpro
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    How so?

    I think I understand, but please tell me what you are referring to in particular.
     
  7. KenH

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    Just because one State passes a law that may be harmful to it at least the harm is restricted to that State.
     
  8. carpro

    carpro
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    OK

    That's what I thought you meant. Unfortunately there are 33 other states with similar bills in the works. :(
     
  9. elijah_lives

    elijah_lives
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    Including businesses down to 1,000 employees.
     

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