Wal-Mart and the Employer Mandate: Ezra Klein Misses the Point


In a post about Wal-Mart signing on to an employer mandate for health insurance, Washington Post blogger Ezra Klein says he was initially skeptical, but then read the joint letter between Wal-Mart, the Service Employees Union International, and the Center for American Progress, and pronounces himself convinced.

He notes, though, that Wal-Mart isn't doing this for altruistic reasons, and in doing so Klein comes perilously close to grasping the concept of rent seeking and regulatory capture. But then he whiffs.

This isn't, of course, a story of altruism. By being of use to the administration, Wal-Mart ensures that its concerns will be heard and heeded. By publicly associating itself with health reform, the company repairs some of the damage SEIU and others have done to its reputation in recent years. And, in a more macro sense, by throwing its weight behind strict cost controls, Wal-Mart makes it likelier that it gets the largest of all possible benefits: an eventual slowing in the double-time march of health-care costs.

Klein then again almost stumbles onto the point. But again he misses.

But health reform isn't supposed to be about altruism. And that's arguably the most important message of this letter. Reforming health reform [sic] isn't just some liberal president's agenda item. It's good business.

Supporting new regulations is usually good business if your company is big enough to absorb compliance costs that could slow down or cripple your competitors. Even better if can you sign on early and win over a few influential opinion makers, interest groups, and politicians so you'll have some pull over how the regulations are written.

Michael Moynihan on Wal-Mart's money connection to the Center for American Progress here. Peter Suderman wrote on Wal-Mart's support for the mandate here.