Liberals Should Know Better

Arnold Kling writes:

Although the motivation of the liberals was to raise the well-being of Wal-Mart workers, it is far from clear that this will be the consequence. Low-skilled workers cannot receive more in compensation than the value of their labor. If Wal-Mart is forced to increase the share of compensation that comes in the form of health benefits, then it will have to decrease take-home pay. If it cannot decrease take-home pay, then it will have to reduce its reliance on low-skilled labor or cut back on operations altogether.

...The law requires Wal-Mart to spend 8 percent of its payroll on health care, whether or not this is enough to keep its workers from needing to rely on Medicaid. If Wal-Mart came up with a way to provide outstanding health care to its workers for 6 percent of its payroll, it would be in violation of the law unless it found a way to waste the other 2 percent on unnecessary health care. Conversely, if Wal-Mart offers a really lousy health plan, it would be in compliance with the law as long as it spent 8 percent.

Then he addresses liberals directly:

Liberals see the market as an arena in which evil corporations inflict their greed on innocent victims. I wish you would see that motives matter less than consequences. I wish you could see that greed is at work when laws are passed that regulate markets, because regulations always produce winners and losers. I wish you could see that those winners and losers are often not who you think they are. I wish you could see that competitive behavior and free choice are forces that operate in the market as a check against greed. Finally, I wish you could see that greed is most difficult to restrain when it is exercised through the medium of government.