by Lance T. Izumi, Fellow in California Studies
Pacific Research Institute
September 21, 1999

Announcer lead: Time for Perspectives. Lance Izumi says that state legislation limiting store size will hurt consumers.

Are you one of the millions of Californians who trucks down to the local Costco or Sam's Club to stock up on groceries, disposable diapers, or clothes for the kids? If you are, then you're on the State Legislature's hit list. In a monstrous attempt to restrict consumer choice, the Democratic majority in the Legislature recently rammed through a bill that will outlaw future construction of large warehouse stores with grocery departments.

The bill, AB 84, was passed by the Democrats at the very end of the current legislative session, without any debate and without any notice to the public. The bill was backed by -- surprise, surprise -- a powerful coalition of labor unions and supermarket chains like Vons, Ralph's and Safeway. Since most large supermarket chains are unionized, the supermarkets fear that the lower prices offered by cost-efficient, non-union warehouse stores such as Costco will drive them out of business. So, like any entrenched interest feeling the heat of competition, they and their union allies decided to get government to wipe out their non-union competitors.

The sheer audacity of the bill has generated stinging criticisms from both conservatives and liberals. The conservative Wall Street Journal has assailed the bill, as has the liberal Sacramento Bee. The Bee condemned the legislation saying, "It sends the message to businesses across the state that if they can't prevail in the marketplace, the Legislature stocks the means to wipe out the competition with a single blow of public policy."

Gov. Gray Davis has not yet indicated his views on the bill. If he signs it, consumers will be the big losers. If a consumer decides to patronize a unionized supermarket out of a sense of labor solidarity, then he or she is free to do so. However, if a consumer decides to favor a non-union warehouse store because of the lower prices offered, then he or she should also have that freedom. It is this consumer sovereignty that forms the basis of our successful free enterprise system. Big business protectionists, labor unions, and their legislative allies should not be allowed to destroy it.

With a perspective, I'm Lance Izumi.