The City Council is poised today to pass a law blocking New Yorkers from purchasing low-cost goods. One purpose of the council’s action is to protect fat-cat grocery store chains from competition. It’s time to take a step back and ask how we got here. How, in other words, can well-intentioned, intelligent people like the City Council members and advocates of this legislation take a problem like that of low-wage workers without health insurance and decide that the solution is a form of government interference in business decisions unprecedented in America?

The interference is a mandate that any grocery store of 10,000 square feet or more spend about $2.75 an hour on health care for each employee. It exists in no other city in the country. And like so many other sources of trouble in the economy, the story begins with earlier interference – federal wage controls imposed during World War II. Health benefits weren’t subject to the wage controls, so businesses offered them to employees as an alternative way of competing for labor.

Today, of course, there are no federal wage controls other than the minimum wage and the artificial restriction on labor supply that exists in the form of restrictions on immigration – a restriction, by the way, that’s not minor and that hurts all Americans. But the linkage of health insurance and employment lingers on as a relic of the last century, an oddity increasingly out of place in an economy in which workers frequently change jobs or are self-employed as independent contractors.

Solutions to the problem of uninsured low-wage workers have emerged already. There’s a government program, Medicaid, that pays for health care for the poor. Medicare covers Americans older than 65, including many still in the workforce. Some “uninsured” low wage workers, while not covered by their own employers, are covered by the insurance of a parent or spouse. Insurance is available for purchase by individuals over the Internet. And uninsured patients can receive care by showing up at any hospital emergency room.

More could be done to make insurance less expensive. Tort reform, which would trim the cost of malpractice insurance and with it the cost of health care. Laws allowing interstate sales of health insurance would make it possible for New Yorkers to buy low-cost catastrophic health insurance from a state where the legislature hasn’t caved in to lobbyists demanding that all policies sold cover every bruise and bunion.

But piling a new government mandate on businesses is a solution noteworthy for its clumsiness. It’d be like trying to solve the problem of hunger among low-wage workers by mandating that every company in New York with more than 35 employees open a cafeteria and serve workers breakfast, lunch, and dinner. Or trying to solve the problem of affordable housing in New York by ordering businesses to build dormitories for their employees or face punitive fines.

While some companies do compete for executives or other workers by providing housing allowances or subsidized cafeterias, others don’t. Employees can decide where to work and whether to take a job. Customers can make their own decisions on where to shop, including whether to shop elsewhere if they don’t like an employer’s policies. The burdens rise enormously when the government makes these costs mandatory.

The legislation the Council is scheduled to pass today is billed as the “Health Care Security Act,” but it might as well be called the Higher Priced Groceries and Minority Unemployment Act. The companies that open in New York despite the mandate will pass the higher health care costs on to customers in the form of higher-priced groceries, a cost, that, like a sales tax, winds up taking a proportionately greater toll on the poor. Some companies will take a look at the bill and decide that opening in New York City isn’t worth the hassle, leaving fewer new jobs for New York’s unemployed minorities.

The measure before the council will cover stores such as Whole Foods, Sam’s Club, and Garden of Eden but is aimed also at Wal-Mart, which earned its status as America’s largest retailer on the basis of its everyday low prices. As it happens, Wal-Mart says it insures more than 948,000 people, making it one of the largest purchasers of health insurance in the country. Plenty of New Yorkers, including poor ones, would like to shop at a Wal-Mart if one opened in New York, but as it is they have to travel to New Jersey or Long Island. For those who would prefer to avoid Wal-Mart, no one is forcing anyone to shop there.

If this bill isn’t really about what’s best for lower wage workers, it’s reasonable to ask what is motivating it. The executive director of New York Jobs With Justice, Adrianne Shropshire, told us yesterday that her organization, one of the fomenters of the legislation, is funded by labor unions. The unions that represent some grocery workers – and health care workers, for that matter – want to make it harder for non-union grocery stores to open in New York and get those that already exist here to spend more money on health care.

Passing a law is easier than winning a union organizing election. These unions are powerful political forces – the United Food and Commercial Workers District Council of New York alone has spent more than $43,000 this year on lobbyists at the Parkside Group, a firm whose staff includes William Driscoll, a former chief of staff to the Democratic Party boss of Queens, Thomas Manton.

Their campaign represents a radical attack on the capitalist economy. Among the member organizations of New York Jobs With Justice is the “Black Radical Congress,” which, as its name suggests, is unapologetic in its extremism. A board member of the national Jobs for Justice group, which operates independently of the New York City group but pursues similar campaigns, is Paul Booth, a former leader of Students for a Democratic Society, the hard-left 1960s protest group.

If there is a bright side to this story, it is that Mayor Bloomberg has been heroically resisting this campaign. He vetoed the legislation when it passed the first time, and the council today would be overriding his veto. His veto message said the legislation violated federal law governing employee benefits, and we hope his city law department works with the Bush administration and some employers who are affected to challenge the law in federal court.

This is an area where the businessman mayor grasps what his opponent Fernando Ferrer, who supports this anti-New York legislation, does not – the importance of allowing private employees and employers and customers to do business with each other free from government interference. “We have to make this city open to everybody,” Mr. Bloomberg said on February 10.”There’s always two sides. Some people like big stores, some people don’t like big stores, but that’s in the end what the marketplace should determine.”