Michigan’s Item Pricing Law

While I was cruising one of Detroit’s online newspapers, I came across an interesting article that brought to light the subject of item pricing.

For those of you who don’t know, the state of Michigan has a law that requires retail stores to have a physical sticker price on almost all items for sale (exceptions for pets, plants, some food items, etc.)  This means having extra workers performing the task of attaching prices to every can of soup, each DVD, every pack of pencils, etc.  You get the picture.

The main purpose of this law is to protect consumers from unethical business practices (mainly the bait-and-switch tactic) performed by some shady retail store owners.  By having an attached price to each item, the consumers are able to do the math ahead of time, add in the sales tax, and know exactly how much they should be paying upon checkout at the cash register.  If the price charged at the register is higher than the price marked on the item, then the customer is entitled to a cash bonus.

The problem though for businesses is that the process of attaching the price stickers and changing prices can be an extremely time consuming process, costing the company time, money and manpower.  The extra cost of dealing with this business law is ultimately passed down to the consumer through slightly higher prices.

In the article, the estimated $2.2 billion in extra costs to accommodate for the law can be taken with a grain of salt.  A study commissioned by the state’s retailers about extra business costs is going to be biased toward the cause.  You’re not going to come out and publish the results of a study if it doesn’t go along with your agenda.

It’s no secret that the state of Michigan is suffering from high unemployment.

Repealing the item pricing law will add to the number of layoffs taking place throughout the cities.  When the larger stores no longer need workers to go around and physically attach prices to individual items (as opposed to changing a sign on a shelf), the stores will cut back on the number of workers needed to effectively run the store.  Some of the workers will be reassigned to other tasks while others will be another statistic in the weekly layoff report.

But repealing the law is one step in the right direction to making the state more business friendly.  In theory, when you cut back on the rules and legislation it takes to run a retail store, and lower the tax rate for businesses, then in an ideal situation this will inspire everyone from small business owners to large corporations to open new stores throughout the cities and state, offering new employment opportunities for the unemployed and ultimately increasing government revenue.

So for the future of the state, it’s best if anti-business laws like this are repealed.

But would repealing this law really help the people looking for work in the Detroit metro area?

I honestly don’t know.  The extent of my formal business training is limited to a single economics class in high school.  I picked up the rest of it on the streets.

As a former Detroit resident and still semi-frequent visitor to the Wolverine State, I do know that Detroit is a special case and probably not what most people would refer to as an ideal city when it comes to employment and economic prosperity.

In the old days, people speaking of the Big Three would be referring to the car manufacturers:  General Motors, Ford and Chrysler.  These days it’s more like the Big Two — unions and crime.  Both of which are major enemies for large and small business owners.  One can rob you blind through expensive demands and the threat of going on strike, while the other can rob you just as well between petty street thugs and common criminals all the way up the ladder of government corruption.  And Detroit in particular is filled to the brim with both unions and criminals.

In the long run, it’s best for the state to repeal anti-business legislation, lower taxes, and to take a stand against labor unions.  That is, if the state actually wants to attract new businesses and keep its remaining residents from fleeing to other lands.

At least the Detroiters are used to looking ahead to a better future.  As the Lions’ fans commonly say, “There’s always next season.”

Now is the time to start making the tough decisions so that there will be economic prosperity next season.