Friday, January 20, 2006

Hunter Defends Wal-Mart Bill, Says He'd Like to Lower 10,000 Employee Threshold to Include Other Companies

State Senator Jon Hunter, D-Monongalia and the main sponsor of SB 147 (the Wal-Mart Bill), defended the bill this morning during an appearance on Talkline with Hoppy Kercheval. Hunter, one of the Senate's more liberal members, says he had no idea this bill was a pet project of labor unions and that he got the idea for the bill through media reports of the Maryland law. Hunter also said--confirming the worst fears of opponents of the bill--that he would like to lower the trigger threshold of 10,000 employees to force smaller businesses to spend at least 8% of their payrolls on employee health care.

The Wal-Mart Bill is all about a union vendetta against the company because its employees refuse to unionize and Wal-Mart's low-cost pricing strategy is hurting the business of unionized grocery stores that have higher costs of doing business. The unions--primarily the United Food & Commercial Workers--really want to unionize Wal-Mart to capture contributions to fund the union health care & pension funds that are paid by unionized workers at most large grocery stores that have not resisted unionization.

The Wal-Mart Bill requires only a certain level of spending on employer-provided health care relative to payroll. It does not relate to specific levels of benefits. It does not consider Wal-Mart's large number of part-time employees who get their health insurance through other family members. Indeed, the bill does not consider any possibility that Wal-Mart already provides good health insurance options for its employees and that it pays so little relative to its payroll because it has applied to its purchasing of group health insurance the same tactics it has employed to purchasing its merchandise and that save consumers billions of dollars per year at the checkout line. Indeed, I think if the unions were pressed with this possibility, they would argue that if it's true, Wal-Mart is unfairly using its size to get an unfair deal on employee health insurance and is shifting its costs onto those with less purchasing power, and should thus pay more just to be socially responsible.

Today, the union vendetta targets only Wal-Mart. However, do not doubt that if this law is implemented in Maryland, the employee threshold will be reduced and the required level of spending on employee health benefits will be increased. Aside from uniform minimum wage and overtime laws, government should not otherwise regulate the amount or form of employee compensation in any private business. Given the looming crisis with retirement income security, are we going to next require--beginning only with very large employers, of course--employers to generously contribute to employees' defined contribution plans such as 401(k)'s and IRA's, if not mandate defined benefit pension plans?

Regardless of what happens with the Wal-Mart Bill, I believe the unions are orienting all their efforts toward unionizing the company and using legislation to create more favorable conditions for their efforts. My suspicion is the unions are really hoping Wal-Mart will comply with the bill by reducing its part-time payrolls and increasing its full-time payrolls, thus increasing the proportion of Wal-Mart's workforce for whom working at Wal-Mart is their career and thus might be more likely to unionize than a retirees or students working there part-time and do not receive health insurance from Wal-Mart because they are already covered otherwise. I also believe that even if this does not happen, the unions are hoping to reduce Wal-Mart's cost advantages over its unionized competitors and thus reduce the potential for a materialization of the unions' fears of a deunionization of grocery stores that would deprive them of membership and--most importantly--money.

Wednesday, January 18, 2006

State Central Planning Fails Again: $220 Million "Economic Development Grants" Yield Less than 1,000 Jobs

this is an audio post - click to play

The Ruling Party still doesn't get it. Fifteen years after the collapse of the Soviet Union, West Virginia's ruling elites continue to bet the future of our state on the ability of government to centrally plan the economy.

Four years ago--in what was then viewed as a blatant taxpayer giveaway designed to minimize the first round of GOP gains in the Legislature as our campaign to eventually take control began--the Legislature approved the issue of over $200 million in revenue bonds backed by the video poker machines for "economic development grants." These grants were touted as the latest great idea to stimulate our state's anemic economy.

Today, the Charleston Daily Mail reports that just over half of the grants have actually been spent and less than 1,000 new jobs have been created. $134.4 million of state money has produced 884 permanent, full-time jobs--almost half of which are at the Fort Henry Industrial Park in Wheeling, home of Cabela's. Temporary construction jobs created by the grants generated less than one-fifth of the total payrolls predicted by labor unions that supported the grant program.

One has to ask whether these continuing follies by the Legislature and the Ruling Party are the result of economic illiteracy or simple narcissism and illusions of self-grandeur. Is the majority party really so economically illiterate they believe endless government cash infusions into the economy will eventually spark meaningful economic growth or are they so egotistic they could not bear the loss of seeming self-importance should they ever decide to implement the Ronald Reagan model of lower taxes, less regulation, and less government interference in the economy that has made the United States as a whole the world's greatest economy over the last 25 years? I could believe either.

Real, sustained economic growth will come to West Virginia when our public policy shifts to a model of lower taxes, less regulation, less lawsuit abuse, and an efficient government that acknowledges its limited role in the economy and focuses on its core responsibilities to the people. A good first start toward this end would include completely abolishing the food tax and either completely abolishing or implementing a quick scheduled repeal of the business franchise tax during the current legislative session. Step 2 would be for West Virginians to elect a Republican majority to both houses of the Legislature this November.

Pirate DVD & CD Studio Discovered in State Capitol Basement

This story comes from the Truth is Stranger than Fiction Department. Click here to view the full story in today's Charleston Gazette. Simply amazing!

Tuesday, January 17, 2006

Will West Virginia's Neighbors Finally Join the 70 mph Club?

It's been over a decade since Congress repealed the National Maximum Speed Limit and almost 9 years since West Virginia raised its rural interstate speed limit from 65 to 70, yet we remain an island surrounded by states that have yet to follow suit.

Maximum Daytime Car Speed Limits on Rural Interstates, 2005

Green=80 mph Yellow=75 mph Blue=70 mph Red=65 mph Black=60 mph

Recent events in Kentucky and Virginia--yes, Virginia!--give hope the Bluegrass State and Old Dominion might finally return to the speed limits in effect before 1974. In Kentucky, Gov. Ernie Fletcher has endorsed legislation to copy West Virginia's speed limits of 70 on interstates and 65 on other 4-lane highways. In Virginia, Senate Bill 53, which would raise the speed limit to 70 on I-85 (for now) just passed the Senate Transportation Committee on a 13-1 vote.

UPDATE: Jan. 18: The Virginia Senate passed SB 53 today on a 36-3 vote. The dissenters were senators Creigh Deeds, D-Bath, Linda Puller, D-Fairfax, and Mary Margaret Whipple, D-Arlington. The seat of former Senator Bill Mims, R-Loudon, now a Deputy Attorney General, is vacant.