Retail Leaders Tout Legislative Wins
Sandy Kennedy, writing on the Retail Industry Leaders Association’s Retail Checkout blog, said retailers had a banner year when it came to chalking up legislative victories.
Durbin Amendment Protected
Tops on Ms. Kennedy’s list was the industry’s defense of the Durbin Amendment. The debit card swipe fee legislation, originally passed in 2010, faced intense opposition from banking institutions that sought to have it overturned or, at the very least, weakened substantially. According to Ms. Kennedy, in the end the industry achieved "a win that will save merchants and consumers money and bring competition to a market where there previously was none."
Next on the agenda is to have Congress passing legislation that would bring similar reforms to credit cards.
Progress Made on Amazon Tax
Efforts made on the state and federal level to require that Amazon and other retailers collect sales tax are paying off as federal legislators are considering a law that would cover all 50 states. The legislation, surprisingly to some, has the backing of Amazon.
Congress Approves Trade Pacts
Trade agreements with Colombia, Panama and South Korea that had been stalled have now been approved, giving American companies greater access to these foreign markets. According to Ms. Kennedy, "the greatest benefit of this year’s activity on the trade front is that it clears the way for additional job-creating trade agreements, most importantly the Trans-Pacific Partnership (TPP)."
The RILA is optimistic about the potential of the TPP to create investment opportunities and "well-paying U.S. jobs." President Obama has signaled his support for the TPP.
House Passes Workforce Democracy and Fairness Act
Retailers are opposed to a National Labor Relations Board (NLRB) decision they believe would enable unions to "gerrymander workplaces" and establish "micro-unions." It would also allow unions to push through labor votes in as few as 10 days after notice was given. The Republican-majority House passed the Workforce Democracy and Fairness Act to overturn the NLRB’s decision. The industry’s attention will turn to lobbying the Senate in 2012.
Health Care Reform
Implementation of the Affordable Care Act is clearly a major concern for retailers, and industry groups such as the RILA’s Flexibility in Health Care (EFHC) Coalition have worked to create rules that are more beneficial to employers. According to Ms. Kennedy, two areas of success include agencies adopting "RILA-proposed solutions are the development of an affordability test safe harbor for employers and the definition of full-time employees."
Looking ahead to 2012, RILA expects to weigh in on a variety of topics including what constitutes a full-time worker, automatic enrollment and tax penalties for employers that don’t comply with mandates.
Discussion Questions
Discussion Question: What do you see as the most important legislative accomplishment for retailers in 2011? What area do you think will require the greatest attention in 2012?
Sandy Kennedy is right; this has been a terrific year for retail lobbying.
I do think that retail has taken the wrong position on unions, though; if wages were higher for retail workers, retail companies wouldn’t experience 300% turnover each year, and customers wouldn’t complain so much about sales associates who know less than they do….
While I agree that the industry needs to turn its attention to limiting swipe fees on credit cards, there still remains work to be done on the existing law. A number of merchants selling low-price goods are complaining that their processing costs have actually gone up since the law was enacted. A recent piece on The Wall Street Journal looked at the problem it is causing smaller retailers.
We will pay for the swipe fees, one way or another. There is no consumer victory here. Smoke and mirrors.
I buy stuff from Amazon.com and appreciate the absence of taxes. Here in CA, however, we need the revenue. Good move for my state.
The trade agreements with Colombia, Panama, and South Korea were stalled, which is a nice way of saying that they lay on this President’s desk for 34 months before being sent to Congress for approval, evidently because the AFL-CIO disapproved of them. Then, when they were sent to Capitol Hill, they were accompanied by a requirement that Congress also approve a long-term expansion of an assistance program for workers displaced by foreign competition. As was reported, “Linking the two, as the White House has done, perpetuates the myth that international trade is a zero-sum game and that free trade causes job losses.” How does this help retailers?
When unions of all types give individual members the ability to choose where their dues are spent for political contributions, that will be progress for retailers among other types of businesses. Fortunately, the Employee Free Choice Act, better known as the Card Check bill, lost steam and support because, among other reasons, it limits secret ballot voting in unions. This is good for retailers.
Implementation of the Affordable Care Act is frightening retailers the more they know about it. Polls indicate that a majority of citizens now oppose the Act, and the Supremes will review it for legality next year. Fingers crossed.
The most important, and likely the most impactful, legislative accomplishment is the defense of the Durbin bill. That eliminates a cost unfair to both merchant and consumer. Debit card swipe fees are burdensome for shopper and retailers alike, but for merchants they work against building a business, worsen the cost structure, and represent an all around drain. The capping them is a plus, and defending the bill against the banks and credit card companies is a victory for retailers and consumers.
Be careful what you wish for with the internet sales tax issue. Those B&Ms that also sell online will easily meet the $500K threshold and would be required to collect/remit tax for all 45 States. Look for push back as well from AK, MT, DE, NH and OR as they do not have a sales tax law.
Did you know that for the sales taxes retail collects, the merchant account gets a percentage of those funds too? That money does not belong to you or the MA, but rather the state DOR! This is yet another out-of-pocket expense both B&M and online retailers endure.
We anticipate a number of continued issues to dominate the retail lobby in 2012. First, the fight to level the playing field on sales tax collection still needs to be resolved at the federal level. Bipartisan momentum in both chambers of Congress gives us confidence that a comprehensive federal solution can be reached and that the end is near for Amazon’s unfair advantage. Brick and mortar retailers have been collecting sales tax on online purchases from the beginning; it’s time for their online-only competitors to do the same. Second, implementation of health care reform is still in its early stages. While RILA supports repeal of the bill, we’re not sticking our head in the sand either; there’s just too much at stake. We will continue to engage with agencies to ensure the industry’s perspective is considered as the implementation rules are written. Third, the industry will continue to defend debit swipe fee reform from challenges from the financial industry. But more importantly, retailers hope to expand the reforms to credit cards.
One issue I suggest everyone keep their eye on in the New Year is trade. With the Colombia, Panama and South Korea FTAs complete, an opportunity exists to move a trade agreement with huge benefits to the retail industry. A well-constructed Trans Pacific Partnership is a priority for the retail industry and one that could present retailers with considerable opportunities.