Wisconsin shoppers are learning a hard lesson this Black Friday. They are paying more, according to one lawmaker who hopes to change that.
The state’s minimum markup law actually makes it illegal for stores to sell TVs, gaming systems, clothes, shoes, appliances and just about everything else for the lowest price.
“Some Black Friday deals are valid in Illinois or Iowa but not in Wisconsin. This is bad for Wisconsin consumers and bad for Wisconsin retailers,” Sen. Duey Stroebel, R-Cedarburg, said. “A family in Kenosha or Marinette should not have to drive across state lines to get the lowest price on Black Friday. Government should not dictate pricing on consumer goods, the free market can set prices for these goods that both retailers are happy to accept and consumers are happy to pay.”
Minimum markup in Wisconsin dates back to the Great Depression. It requires stores to sell most everything at a 9 percent markup. Beer and gasoline get a 3 percent markup.
“The goal was to set a price floor to prevent bigger businesses from selling items at a loss in an effort to drive out smaller competition. Once the competition was out of business, the theory goes, the bigger businesses could then raise the prices,” Will Flanders, research director at the Wisconsin Institute for Law and Liberty, said. “The minimum markup law remains in place because many small businesses and special interests believe the law protects them. For example, existing gas stations like it because it prevents other startups from coming and offering lower prices. It guarantees a certain level of profit or margin on sales.”
It is, ironically, the bigger stores that suffer the most under minimum markup, according to Stroebel. He asserts it’s the shoppers at the bigger stores that suffer the most under minimum markup.
“Wisconsin’s minimum markup law increases costs for items,” Sen. Stroebel said. “That’s especially clear when some Black Friday sale prices aren’t valid in Wisconsin because of our minimum markup law. Wisconsinites should be able to get the same deals on Black Friday as our neighbors in Illinois.”
“The minimum markup law is a ‘lose-lose’ for Wisconsin,” Flanders added. “It raises prices for consumers without helping the small businesses it is designed to protect. It is high time that this Depression-era measure come off the books.”
There is an effort to end minimum markup. But it has gone nowhere over the past few years.
“Unfortunately, a full minimum markup repeal remains a heavy lift,” Flanders said. “But there are reasons to be optimistic. Gov. Evers supported a repeal on gasoline. And a bipartisan group of lawmakers supported a repeal of the law’s application to prescription drugs. Perhaps by simply eroding the law, we can finally put it in the dustbin.”
Stroebel has a proposal to end minimum markup. He said he hopes to get his plan a hearing in the spring.
Benjamin Yount reports on Illinois and Wisconsin statewide issues for The Center Square. Reposted with permission.
