‘Pay or Play’ legislation: Unions play; workers and taxpayers pay

Guest Columnist

As our Legislature heads toward the home stretch, union leaders are pressing their “pay or play” legislation requiring companies in Washington state with more than 5,000 employees to spend 9 percent of their payroll on employee health care benefits. It is organized labor’s latest salvo at Wal-Mart, a company whose employees have repeatedly rejected joining the union.

There are two interesting aspects to this effort. First, supporters are using confidential employer information mysteriously “leaked to the press” from state files. Even though the Department of Employment Security sent out a letter warning legislators that leaking the confidential information could violate state or federal law and carry a $5,000 penalty, somehow it seeped out.

Second, employer mandate bills like those being pushed by the AFL-CIO in Washington and 33 other states will do nothing to improve access to affordable health care, will result in job losses and will cost taxpayers millions in legal fees.

The Employment Policies Institute, a Washington, D.C., based nonprofit research organization, recently released a study showing that, if passed nationwide, employer mandates will cost 315,000 jobs.

In Maryland, lawmakers approved a union-backed measure that requires companies that employ more than 10,000 people to spend at least 8 percent of payroll on health care. Wal-Mart is the only company in the state affected.

The legislation effectively killed Wal-Mart’s plan to open a distribution center in Somerset County that would have employed 800 people. The rural county is Maryland’s poorest, with per capita income less than half the state average. According to The Wall Street Journal, the center’s “ripple effect” would have created an additional 282 jobs, boosting the county’s private-sector employment by 20 percent.

The Retail Industry Leaders Association recently filed suit in Baltimore’s federal district court asserting that Maryland’s “pay or play” law violates federal law.

Proposing legislation that is already embroiled in legal battles elsewhere and headed to the U.S. Supreme Court – litigation that would surely follow here – is neither a solution nor a responsible use of Washington taxpayers’ hard-earned money.

Every company in America is struggling to deal with the soaring cost of health care. What is forgotten is that every Wal-Mart associate in America – both full-time and part-time – can become eligible for health coverage for $23 per month, an approach that has helped 160,000 previously uninsured Americans get insurance.

That hardly sounds like a recalcitrant employer who should be punished because unions have failed in their organizing efforts. Using poorly aimed legislation to get even makes the situation worse, not better.

Don C. Brunell is president of the Association of Washington Business.