Regulation Shmregulation
How would you react if NSU’s administration passed a regulation that forbids people who were less than 6 feet tall from teaching Economics 211?
Let’s see, there are two people who teach Economics 211 – one of them, Dr. Coats, is a just pinch under 6 feet, so it would appear that this regulation would be directed only at preventing Dr. Coats from teaching Econ 211. Certainly it would be hard to argue that being tall is an important factor in teaching Econ 211.
Does it sound ridiculous that there would be this type of regulation? Gosh I hope so.
Would you see something like this in the real world? Gosh I hope not.
And yet, perhaps you should read this article from the USAToday.
My guess is that if it sticks around, it will be successfully challenged in court as being illegal.
–CT
December 6th, 2006 at 5:15 pm
I think I am more disturbed that you get your new from USA Today.
December 6th, 2006 at 7:32 pm
It’s an Associated Press Story. The USAToday is one of the many, many outlets that printed the story.
–CT
December 6th, 2006 at 11:11 pm
Great article that unfortunetly I had not read until browsing upon your blog entry. In economical response to the article the follow seems to immediatly come upon me. First, hasn’t Wal-Mart infringed its will on enough small business owners throughout America. Second, wouldn’t the current laws set in place protect the revenues of the smaller businesses in the immediate area? Futhermore, I have a few concerns with the legislatures arguements as to why they insist on upholding this phrohibition. With it’s interest of continual growth it is clear that Wal-Mart indeed would like to construct a Super Center in the San Diego area. I believe it is blantly obvious that the council is targeting Wal-Mart with the implementation of this ban. Wouldn’t this act alone be illegal? Lastly, my rebutal to the banning would be carried as follows. I would argue that along with the construction of a new Super Wal-Mart in the proposed area the community would experience a rise in consumer traffic. Now wouldn’t this be an advantage to the local businesses??
Jacob Econ 255 2M
December 30th, 2006 at 9:32 am
The San Diego council makes some valid points about the role the type of store they are against. Even if walmart is the only store of that kind, the damage to society is the same.
January 1st, 2007 at 10:59 pm
Let me note, and this so often gets lost in this conversation, that I am pro-competition, not pro-big business or pro-small business.
I am, first and foremost, a consumer. I like low prices and I like having options – both of what I consume and where I purchase it.
I realize that prices are not the only thing of an importance, but they are important. If I can buy a box of raisin bran at Store A or Store B and store A has lower prices, I will likely go to Store A. If Store B is closer, has attractive employees, has attractive shopping conditions, is more convenient, or perhaps even is owned and operated by an old friend, I may shop at Store B. In shopping at Store B, I realize that I am paying for these amenities in the form of higher prices. In some cases, I am happy to do so.
My biggest pet peeve here is that as soon as the dreaded Wal-Mart appears in the conversation, people often get emotional and stop using the other parts of their brains.
Tom’s comment was that city council pointed out some important items on the “damage” done by Wal-Mart. I think a (not so) brief rebuttal is in order.
Suppose I proposed the following three rules…which are slight bastardizations of what the San Diego City Council is suggesting…only that my rules are written to clearly apply to all new businesses…
1. No new business is allowed to open if there is a chance they will put competitors out of business.
2. No new business is allowed to open unless they pay their workers at least $17 an hour in wages and benefits.
3. No new business is allowed to open that will generate traffic congestion.
I think considering these rules on their merits (if they applied to *all* new businesses) allows us to see through what is behind these rules.
Start with the first one. The concern is that Wal-Mart should not be allowed to open because they may put other establishments out of business. Before everyone starts screaming “mom and popâ€, I suggest you turn this on its head. Suppose for an instant it was possible that hundreds of mom and pop groceries were about to open – and if they did, perhaps all the Wal-Marts in town might go out of business. Would anyone on the city council be supportive of a law that prevented from all these mom and pops from opening because it put Wal-Mart out of business? I doubt it. If you agree, this shows that this rule is not about competition with *existing* businesses, it is clearly about the protection of *small* businesses.
The second one sounds so good on the face, but does not stand up to scrutiny. Would a law written that applied to *all* new businesses, requiring them to meet a specified wage be a popular one? I doubt it. What does it mean to pay workers poorly – poorly relative to what? To doctors? To college graduates? To unskilled and inexperienced workers? Are officials worried that low skilled workers will flock to San Diego because of the new Wal-Mart (remember Wal-Mart workers are paid “poorlyâ€)? Even if you accept the premise that Wal-Mart pays their workers poorly, so what?
Is it for the city council to say what this cutoff wage is? What should it be? Should it be different for unskilled workers? For gymnastics assistants? Think of your favorite new small business. How many pay their workers above $17/hour? How about changing the law that requires all businesses (new and already is business) to pay their workers $17/hour? We are now dangerously close to a minimum wage discussion. Workers are not coerced into working at Wal-Mart. Presumably, they work there because it is better than the next best alternative.
The third rule is somewhat defendable. However, if the citizens of San Diego are concerned with traffic congestion, shouldn’t the city ban *all* retailers above a certain size? Can they foresee a traffic congestion problem before Wal-Mart has chosen a site? Have they given large retailers an opportunity to address the traffic congestion? Or is it once again, a regulation that would favor *small* businesses? How would a Wal-Mart’s traffic congestion compare to a shopping mall’s traffic congestion? Personally, I think this is clever, as mom and pop will not be causing congestion.
It sure looks like the complaining above is all about protecting *small* businesses. So after all that, the million-dollar question, a question I would love to hear a satisfactory answer to is…
Why should the city of San Diego be in favor of *small* business over *large* business?
The answer I so often here is that consumers *say* they like small businesses and they *say* they want to shop at small business, and thus the city is helping their consumers. I do not buy this for one second. And before you say job growth, be careful, because mom and pop are still mom and pop – we do not want them to be growing and causing traffic congestion, now do we.
If people really want to shop at “mom and pop”, and are willing to do so despite higher prices, mom and pop will not go out of business. The appearance of Wal-Mart does not cause consumers not to have the *option* to continue to shop at mom and pop. If the majority of people would be willing to forgo shopping at Wal-Mart, Wal-Mart would not be profitable. And yet, Wal-Mart is full of shoppers and mom and pop go out of business. What does that tell you? It tells me that, when it comes to their wallets, not very many consumers prefer to choose the option to shop at mom and pop in the face of lower prices at large retailers. In short, if people were so happy to shop and mom and pop, the ban wouldn’t be necessary.
So unless the San Diego city council knows more about where I want to shop then I do, and unless the San Diego city council knows more about where workers want to work they do, then something is seriously wrong with the San Diego City’s council’s suggestion.
Could it be there is a very vocal group of people who stand to benefit if Wal-Mart is prevented from opening?
I believe the consumer is sovereign, not the San Diego City Concil.
–CT
January 27th, 2007 at 5:47 am
One should never be surprised at what happens in the Socialist State of California. It seems that a state built from capitalism so powerful that we even named the migration wave of original settlers a “rush” has forgotten that capitalism.
Even with the left coast bent one wonders if this sort of social engineering by economic discrimination will stand up to legal challenge, but more importantly one wonders what is the message of this City Council’s rules?
On the more general basis of the Wal-Mart issue one has to have mixed feelings about the firm and it’s business practices. Maybe not mixed, maybe a realization that behind the Smile Faces and token community donations that the Wal-Mart business model is quite predatory.
I do not patronize Wal-Mart as a practice, and where possible avoid Chinese Goods with doubtful workforce providence.
Just as I would not drive a stake in my yard and chain workers to it, expecting them to work as incarcerated labor (slave in plain speak) or for parking meter moneys, I prefer to avoid the risk by doing the same by Proxy through purchases as Wal-Mart. I will pay more before risking being a slave owner distanced by a retailer as my slave-master proxy.
They also do not patronize my employer’s professional building services, preferring to hiring their services from out of town. This pattern repeats from store construction through store operations, and has repeated with every store they have opened in the region. They prefer to buy their building services in an aggregated fashion from non-local vendors. It is their prerogative to do so. With other “big box retailers” offering the same goods in the same price range there are open options, and when these retailers are your customer, you become theirs as a courtesy.
The Wal-Mart purchasing program is one to walk away from as a vendor. Empty plants after a vendor has been crush in the “Wal-Mart Buying Cycle” are common.
Wal-Mart tells a vendor they must expand, that they need to ramp up to meet Wal-Mart’s needs, then they get into the vendor’s books and start playing God about achieved profit. They claim any profit gains by demanding price decreases. If a vendor balks, the economic warfare starts. The game usually ends up by Wal-Mart sourcing the product overseas and reducing orders to the vendor to a fraction, or dropping them in total.
There are more Wal-Mart games, but these few give an idea of their business model & its issues.
For Wal-Mart to be dealt with by economic mischief by a City Council and then complaining about it, is for the pot to call the kettle black.
On occasion society has non-economic goals of fair play that can be encouraged only by economic means, in this case by discriminatory zoning regulations.
The final issue with allowing or disallowing “Big Box Retailers” (BBR) in general is whether this type of retail outlet fits the community plans. BBR use a lot of space, expect their customers to be mobile, preferably by car, and have no local flavor.
For the most part the stores are cookie cutter images, located in retail zones that are seldom mixed use areas, require transport to & from these retail areas, and usually leave a gutted small shop retail zone in their wake.
These are the “higher use” issues city planers are expected to address.
Interesting issue, community socialism, a retailer who engages in corporate warfare while expecting corporate welfare and community individualism all at play… interesting.