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Maryland legislators voted yesterday to override a gubernatorial veto and require large employers – specifically Wal-Mart – to spend an amount equal to at least eight percent of their payroll on health care benefits, or pay a penalty to the state’s health insurance program.

The law emerged from concerns that there were a significant number of Wal-Mart employees who did not have health insurance and were requiring on public assistance to medical coverage, taking Wal-Mart off the hook while victimizing state taxpayers.

There are, in fact, only four companies in Maryland that are large enough (having more than 10,000 employees) to be affected by the law – Northrop-Grumman, Johns Hopkins University, Giant Food, and Wal-Mart. Only Wal-Mart is expected to fall beneath the eight percent threshold, according to numerous published reports. It is unclear how much it would cost Wal-Mart to come into compliance.

The vote yesterday came after months of heated debate about the issue and much lobbying by Wal-Mart to defeat the measure and by union organizers to keep it intact. The Wall Street Journal reports that six other states have defeated similar bills, and another six states have such laws under consideration. The Maryland success is expected to embolden union organizers to try and push for such laws in as many as 30 other states.

Wal-Mart reportedly is considering its next options, including a lawsuit to try and have the law declared unconstitutional.

Wal-Mart released the following statement in response to the vote:

"We believe that everyone should have access to affordable health insurance. This legislation does nothing to accomplish that goal.

"There are 786,000 uninsured people in the state of Maryland and less than one-half of one percent work for Wal-Mart. Clearly, the legislators who voted for this bill have let down hundreds of thousands of Marylanders in need.

"More than three-fourths of Wal-Mart associates have health insurance. And every Wal-Mart associate in Maryland -- both full time and part-time -- can become eligible for health coverage that costs as little as $23 per month.

"This vote was never about health care. This was about partisan politics in the Maryland gubernatorial race. In allowing a bad bill to become a bad law, the General Assembly took a giant step backward and placed the special interests of Washington, D.C. union leaders ahead of the well being of the people they serve. And that's wrong.

"The American people know that catering to the special interests does nothing to help the 46 million uninsured individuals in this country. Now is the time for legislators across the country to work together to find real solutions to the health care challenges facing every state, every business and every working family.

"It's time for Washington, D.C. union leaders to stop their attacks, and let working families decide where to shop and work."
KC's View:
We have to admit that we were amused by a New York Times story that quoted Frank D. Boston III, the chief lobbyist for Wal-Mart on the health care bill, as saying about the unions: "They have a power we can't match, and we worked this bill extremely hard."

It must be news to the unions that they are so powerful, considering that Wal-Mart has largely stymied their efforts at almost every turn. What goes around comes around.

Hard to know at this point whether this is just a skirmish in a long war, or the kind of turning point that people will be studying many years hence. We suspect it is the former, since Wal-Mart cannot let this law stand without spending a lot of money and political capital on trying to get it reversed somehow, some way.

Short of that, it is hard to know what Wal-Mart’s next steps could be. Close all its stores in Maryland in protest? Or close just enough stores – or cut back on staffing - to the point where it actually has only 9,999 employees in Maryland?

Whatever Wal-Mart does, it will be forceful. And creative. And the battle will rage on.