CONSUMERS "PAYING THE PRICE" for ITEM PRICING LAW REPEAL

Nine-Month Study findings are Clear

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The findings are clear: Consumers are “paying the price” for the repeal of the Item Pricing Law.  Sign our online petition to tell Attorney General Bill Schuette to do his job and protect Michigan consumers.

Our investigation has found that not only did Shopping Reform and Modernization Act (SMRA) not lower grocery prices; Michigan prices have stayed consistently higher and grew at a faster rate than the national average.

Section I - Executive Summary

A. Purpose

From day one of the current legislative session, one of the Michigan legislature’s top priorities was to pass the Shopping Reform and Modernization Act (SRMA).  This was evidenced by the quick passage of the bill into law, despite calls from many legislatures to slow down and ask for more public input.  Michigan Citizen Action (MCA) expressed opposition to the bill, not just on its merits, but in principle, because it seemed the needs of workers and consumers were being ignored during a time where they were unfairly burdened by the struggling economy and tough job market.  MCA was against the primary purpose of the SRMA—repealing the Item Pricing Law (IPL) requiring retailers to individually price most products—and was concerned that the SRMA was damaging to consumers.

The SRMA was passed on the platform that it would not have an adverse affect on employment, and that it would save consumers money and improve the shopping experience for all.  Soon after the bill was passed, MCA began an investigation to find out whether the claims and promised of the bill’s supporters would become a reality.  Unfortunately, what we found is that none of promises came true, and that the well-being of consumers and workers were sacrificed to help line the pockets of big business.

B. Major Findings

  1. Repealing IPL did not save consumers any money, despite the claim it would save consumers $2.2 billion dollars in hidden taxes. In fact, Michigan prices stayed consistently higher, and grew at a faster rate, than the national average.  There was no price “correction” that would indicate any savings for consumers.

  2. If retailers kept their promise, and workers did not experience cuts in hours, that would possibly explain why prices of goods did not go down; however, retailers broke their promise, and workers in the retail sector suffered devastating wage reductions.  Moreover, the usual “wage boom” that workers enjoyed at the end of each year was completely eliminated—an insult to injury, considering that corporate executives still enjoy their bonus checks.

  3. The $100,000 appropriation was included in the bill for the sole purpose of ensuring that voters could not repeal the SRMA by public referendum.  The Attorney General only spent about $6,000 of the entire appropriation implementing the “Consumer Education Program.”  There is little doubt the bill sponsors were aware that consumers were generally opposed to the SRMA, so they made sure repeal of the law by referendum was not an option.

C.  Leadership Must Protect Michigan Consumers

If legislators will not pass consumer-friendly legislation, and retailers refuse to pass savings on to consumers and employees, the Attorney General and Department of Agriculture and Rural Development must step up.  Currently, the AG and DARD have failed to fully enforce consumer protections.  First, DARD and AG need to better educate consumers on what strategies and tools consumers need to protect themselves.  Second, AG and DARD must take affirmative action to hold retailers accountable and protect consumers.  These things must be done to restore trust in Michigan’s leaders.

Next Section - Full Report: The Investigation

Full Report Online

Executive Summary | Part II | Part III