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Sunday, January 22, 2006

Wal-Mart: The High Cost of Low Price

"Now the Lorbeckis, like small-business owners across the nation, struggle each year with double-digit increases in health insurance premiums for their full-time workers. Spending thousands of dollars each month to insure their employees is the right thing to do, Patti Lorbecki said. So it irks her to see a big company such as Wal-Mart fall short in doing the same, forcing some of its employees and their families to get health care through government programs."

"I certainly want to pay for our employees' health care benefits, but I'll be darned if I have to pay for Wal-Mart's, too," said Lorbecki. "Why should small-business people have to foot the bill for someone who is making millions and millions in profit?" she asked." [JSOnline]

There's been much ado made in the news these past few weeks about Wal-Mart and it's health insurance/benefits offerings for it's employees. I'll be upfront, I have not shopped at Wal-Mart in a very long time, and I refuse to do so in the future. I believe that Wal-Mart embodies all that is going wrong with big business in America today. From what I understand, the "average" Wal-Mart employee makes approximately $10/hour, or under $21,000/year. They purport that 86% of their employees have insurance...but that includes insurance obtained by spouses and those on Medicare and Medicaid.

Many media outlets keep spreading the false claims that "Wal-Mart employees are only slightly more likely to collect Medicaid than the average among the nation's large retailers." Maryland just took a big step forward by passing a bill requiring large firms like Wal-Mart to pay their fair share, or 8% of their payroll on employee health insurance, or they must pay the difference into Maryland's health care program for the poor. [MediaMatters]

Here's the Wal-Mart Benefits Memo: My favorite paragraph:
"Wal-Mart’s healthcare benefit is one of the most pressing reputation issues we face because well-funded, well-organized critics, as well as state government officials, are carefully scrutinizing Wal-Mart’s offering. Moreover, our offering is vulnerable to at least some of their criticisms, especially with regard to the affordability of coverage and Associates’ reliance on Medicaid."

So, what do we do about it? Will State laws or increased regulation force them to pay more for their employees wages and well-being? No. I believe the only answer is to convince others to stop shopping there...hit them where it hurts, and force them to listen to what these "well-organized critics" are actually saying about employee benefits.


Michael J. Cheaney said...

As a small business owner in Wisconsin, I am opposed to the Wal-Mart Bill, not because I am Pro-Business (which obviously I am), but because Maryland took a HUGE HUGE step in the WRONG direction, by mandating that businesses pay a certain amount into Health Insurance.
The problem That I have with the bill is that one day(Mark my words)
I will be mandated to offer health Insurance. Whether my business can afford it or not. It is a nice benefit to offer, but IT SHOULD NOT BE A REQUIRED BENEFIT.
As I said earlier, today it is 10000 employees and within 10 years or so EVERY Company will be required to offer it.

Benny B said...

I can understand your point, and to further that, I can agree with you that mandating that the employer pay a certain, set % of the payroll to benefits might not be the best way to guarantee benefits for all of their employees. I think this is a perfect example of where a nationwide healthcare network would be ideal. Everyone deserves health insurance, and it shouldn't have to be offered by the employer. But then by whom? Republicans decry "giveaways" to the poor and uninsured when Dems push social programs, so what is ok then? I think it's time for the world's richest nation to step into the new century and really offer a comprehensive healthcare plan. We are the richest nation in the world, and we have over 46 million that don't have health insurance?