Paying or Playing

Matthew Holt explains why San Francisco's initiative to get employers to cover their employees will fail:

Half those employed in city businesses don’t live in San Francisco and many of those who live in the city work outside it. On top of that, many of the employees who do not get insurance at their businesses get it elsewhere as part of the employment package of a family member. . . But of course this isn’t really about the hard done-by small business that won’t be able to afford it. Real small businesses aren’t even covered by Ammiano's legislation, (and that’s a problem in and of itself). This is instead about the big businesses that employ lots of low-wage workers—in other words, fast food chains and Walmart.

That gets us to the next problem with state-wide solutions. They, too, are ineffective. Let’s face it, no one is locating in San Francisco for low labor costs, and restaurants here can pass on the extra costs to their customers — sorry, your $27 entree will now be $28.50.

It's a good discussion of the issue, and pertinent to some of my posts here at HP, mostly this one on states forcing employers to spend a portion of their income on health insurance. One key problem with state-wide initiatives is that they can cause some cost and spending shifting to surrounding states, whereas a nation-wide reform can't be absorbed in that way. Go read the rest of the column for more.