Monday, January 16, 2006

Maryland Can't Do Math

Democrats are not educated.

Relevant excerpt:

"The bill will require private companies with more than 10,000 employees in Maryland to spend at least 8 percent of their payroll on employee health benefits or make a contribution to the state's insurance program for the poor. Wal-Mart, which employs about 17,000 Marylanders, is the only known company of such size that does not meet that spending requirement."

The average hourly salary of a Wal-Mart full-time non-manager employee (of whom this deal is mostly built to target) is $9.68 per hour. Assume for a moment that all 17,000 employees are hourly rate employees - something which is probably not entirely an unwarrented assumption, as the vast majority of full time Wal-Mart employees within the state are going to be non-corporate staff. Right now, the bill requires that Wal-Mart spend 8% of $342,284,800, or $27,382,784, per year on health benefits, or they can donate to the state's poverty insurance.

Not to go all Republican, but I'm pretty sure they do donate to the state's poverty insurance - it's called paying taxes. If you institute a program like means-tested state-sponsored medical insurance, it seems sketchy to then legislate that companies who pay low wages be required to fund it. It's a common way for democrats to appear as if they care about redistributive taxation while not actually taking money away from the upper-class.

The effect of this bill is not going to be, as Democrats seem to be suggesting, more health care for the poor. It's going to be less actual healthcare for the poor employees of large corporations; instead of having the state insurance program, Wal-Mart will just effect hourly-rate pay cuts to fund their bad, HMO driven, state mandated health care. Moreover, since Wal-Mart will likely cut pay rates directly across the board, the $1610.75 per employee ends up just mandating that they spend what would otherwise be their wages on health care. This actually sounds like a very Republican thing to do - make the poor pay for their own health care, as they're removed from the tax-funded pool.

The other problem is, in many cases, this is going to be redundant. A significant portion of workers at Wal-Mart are not primary breadwinners for their household. Some of them are high school kids who have summer jobs, spouses, retired people who are elligible for other public healthcare benefits. By tying it to payroll expenses in general, you aren't even targetting the demographic that needs insurance. And by focusing on expenditures rather than effects, there's no particular incentive for Wal-Mart to make an efficient system. The whole bill is silly.

cranked out at 9:15 AM | |