Megan McArdle explains the basic economics behind the decision:
…Wal-Mart is in favor of this because it raises the barriers to entry in the retail market, and hammers Wal-Mart’s competition.
… even in liberal academic literature, it is a commonplace that regulations disproportionately benefit several types of firms:
b) Market leaders
c) Firms with the most employees
Regulation has a very high fixed cost for compliance; the larger the firm, the more dollars/employees over which to amortize the fixed cost. Meanwhile, market leaders have disproportionate bargaining power, and tend to get better rates from suppliers than smaller competitors. Finally, a high fixed cost means either that it’s harder to initially enter the market, or (if there are exemptions for the smallest firms) harder to grow.
On the other side, there is regulatory capture. Wal-Mart is always going to have a seat at the table when employer mandates are discussed, because Wal-Mart is the nation’s largest private employer. Target and Macy’s probably won’t have a seat at the table. So Wal-Mart can influence the rules in ways that benefit Wal-Mart at the expense of the competition. This is partly because the regulators often cycle into jobs at the firms they regulate, but also simply because the regulator’s attention is finite, so being consistently at the table allows you to shape their views over time. Again, this isn’t some kind of crazy right-wing analysis; regulatory capture was first diagnosed by a Marxist historian named Gabriel Kolko.
All of which is to say, Bootleggers and Baptists should be required reading in all schools. When you find strange bedfellows in politics, don’t look for a surprising outbreak of spontaneous virtue: looking for the hidden conspiracy.
The full article can be found here.