Tuesday, January 17, 2006

Making Wal-Mart Pay More Health Benefits

A New York Times article reports on a new Maryland law, called the "Fair Share Health Care Fund Act," aimed at Wal-Mart:

The Maryland legislature passed a law Thursday that would require Wal-Mart Stores to increase spending on employee health insurance, a measure that is expected to be a model for other states.

Under the Maryland law, employers with 10,000 or more workers in the state must spend at least 8 percent of their payrolls on health insurance, or else pay the difference into a state Medicaid fund.

What would you expect to be the result of this law?

What do you think will happen to the wages that Wal-Mart pays its workers?
What do you think will happen to the amount of workers that Wal-Mart hires?
Who gets the benefit from this law?

What information would you need in order to tell if this law is effective (helping low skilled workers) and what is your initial instinct?

It doesn't take much to go from our textbook examples to evaluating this policy.