Maryland Starting to Pay the Price for Their Anti-Wal-Mart Position

I reported a few days ago on the punitive anti-Wal-Mart legislation in Maryland and suggested that the appropriate response by the company would be a complete pull-out of the state. The company probably won't take that dramatic an approach, but they are already changing plans that would have added hundreds more jobs to the Maryland economy. From the Wall Street Journal:

In Big Labor's war against Wal-Mart, "collateral damage"--in the form of lost jobs and income for the poor--is starting to add up. Of course, since the unions and their legislative allies claim that their motive is to liberate people from exploitation by Wal-Mart, these unintended effects are often ignored.

Here in Maryland, however, that's getting hard to do. The consequences of our Legislature's override of Republican Gov. Robert Ehrlich's veto of their "Fair Share Health Care Act" on Jan. 12 will be tragic for some of the state's neediest residents. The law will force companies that employ over 10,000 to spend at least 8% of their payroll on health care or kick any shortfall into a special state fund. Wal-Mart would be the only employer in the state to be affected.

Almost surely, therefore, the company will pull the plug on plans to build a distribution center that would have employed 800 in Somerset County, on Maryland's picturesque Eastern Shore. As a Wal-Mart spokesman has put it, "you have to take a step back and call into question how business-friendly is a state like Maryland when they pass a bill that . . . takes a swipe at one company that provides 15,000 jobs."

Surely Somerset can withstand the loss of 800 jobs, or else the Maryland legislature wouldn't have been so idiotic in its anti-Wal-Mart stance. Well, maybe not:

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.

The Maryland situation is a classic example of what happens when legislators are more responsive to big union donations than they are to the needs of their own constituents. If you were to ask the Maryland legislature their reaction to the news that Wal-Mart may cancel their new distribution centers, they would undoubtedly be "shocked and amazed" that such a thing could happen. Why? Liberal politicians believe they can impose punishing taxes on business and the business will just pay them. It never occurs to the libs that the their business victims just might have some other ideas.

By the way, in other Wal-Mart news, the retail giant will be opening a new store tomorrow in Evergreen Park, IL, a suburb of Chicago. The store has 325 jobs, most of which are full time. They got 25,000 applications. I guess the word hasn't yet gotten out about how evil they are.

Wal-Mart also created 20,900 new jobs...in January. I'm sure they hope to continue that pace, but few if any will be in Maryland.

UPDATE: Helpful reader Bob points out an American Thinker article that reminds us the Hillary Clinton, darling of the left, served on the Board of Directors of Wal-Mart from 1986-1992. Her position, however, appeared to be much more windowdressing than important:

In 1986, when Hillary was first lady of Arkansas, she was put on the board of Wal-Mart. Officials at the time said she wasn’t filling a vacancy. In May 1992, as Hubby’s presidential campaign heated up, she resigned from the board of Wal-Mart. Company officials said at the time that they weren’t going to fill her vacancy.

Of course, Big Labor will forgive her for that unpardonable sin, but it's interesting nonetheless. Read the article - it's interesting.