Giant, UFCW Lobby for ‘Wal-Mart’ Health Bill

Discussion
Apr 07, 2005
George Anderson

By George Anderson


Call them strange bedfellows, but Ahold’s Giant Food chain and the union that represents its workers, the United Food and Commercial Workers (UFCW), are on the same side in supporting legislation in the Maryland General Assembly that would require companies with more than 10,000 employees to spend at least eight percent of their payroll on health benefits or pay the equivalent amount directly into the state’s health program for the poor.


Nate Hurst, a government relations manager for Wal-Mart, questioned Giant’s motives. “Is this bill really tackling health care for the state of Maryland or trying to get at one of Giant’s competitors,” he asked?


Giant Vice President Barry Scher told The Washington Post, “We believe there should be a level playing field for every employer in the state. When that does not happen, we all shoulder the cost of the uninsured.”


Mr. Scher estimates healthcare spending represents about 20 percent of Giant’s payroll costs. Mr. Hurst said seven to eight percent of the retailer’s payroll costs go to healthcare.


If the proposed bill became law, said Mr. Hurst, Wal-Mart would “have to rethink its future growth in a state that is willing to pass such a bad business bill. This type of legislation, where lawmakers single out one employer, does not create a favorable environment.”


Moderator’s Comment: Should large employers be required to spend a certain percentage of payroll on employee healthcare costs or pay an equivalent amount
into state programs designed to assist the poor and/or uninsured?


We can understand Wal-Mart fighting any bill that it believes singles it out to reduce its competitiveness. What we’re having a little trouble getting our
brain around is why, if the company is spending eight percent of its payroll on healthcare, does it need to fight a bill that would require it to spend eight percent of its payroll.


George Anderson – Moderator

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16 Comments on "Giant, UFCW Lobby for ‘Wal-Mart’ Health Bill"


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Ron Margulis
Guest
15 years 10 months ago

The question is whether we as a country want a laissez faire economy or not. I truly believe the market will address this situation by the end of the decade, and governments should not intervene to force companies to fund the uninsured beyond the heap of taxes they already pay.

Also, George, the argument Wal-Mart makes in combating the 8% figure, even though they already spend that amount, is that there is a slippery slope once legislation of this type is passed. At that point, what’s to prevent the number from increasing to 10% or higher in the future?

Ben Ball
Guest
15 years 10 months ago

Here! Here! Ron. That slippery slope of feel good legislation, popular with the masses because it “sticks it to the big guy” is what we have to fear. And politicians are all too willing to pander — and no matter which side of any issue you favor, that’s a bad thing. We need to hold ourselves to a standard of fairness that treats all equally. Now, about that progressive income tax thing…

Franklin Benson
Guest
Franklin Benson
15 years 10 months ago

If they are going to impose this sort of employer health spending requirement, it should be on all employers, regardless of size. This strongly reminds me of the issue where Montana wanted Wal-Mart to have a higher minimum wage than the rest of its employers.

Well, if Maryland persists, perhaps Wal-Mart will have no choice but to stop buying product from any supplier located in Maryland.

That’ll make ’em think twice.

Don Van Zandt
Guest
Don Van Zandt
15 years 10 months ago
Whatever happened to market forces? If workers think Wal-Mart is giving them “the shaft” relative to health care, there are several choices, including working elsewhere or certifying a union to try and bargain for more. If Ahold (or any other company) thinks that they should pay less in benefits to be market competitive, they have the right to make that decision. (Or maybe we could get a law passed forcing big companies to raise their prices?) What makes the 8% idea even more moronic is the magic number of 10,000 employees! If I have 9,999, then I don’t have to have any coverage at all?! Every small business in the state should band together and push for a minimum of 25% paid in for healthcare from the “big boys.” Then they can run all of the large chains out of the state and go back to “Mom & Pop” businesses who can’t subsidize health care for workers because they are too small. Gee, let’s make every company pay 8% and we’ll have socialized medicine available… Read more »
David Livingston
Guest
15 years 10 months ago
It would be anti-American to require large companies to spend a certain percentage of payroll on employee healthcare costs or pay an equivalent amount into state programs designed to assist the poor and/or uninsured. It might sound like a wash for Wal-Mart at 8% today, but how long will it be before some idiots want Wal-Mart to start paying for health insurance for its subcontractor employees as well? This type of legislation is not designed to help anyone, but only to hurt Wal-Mart and benefit weak inefficient companies like Ahold. Just because Ahold cut a bad deal with their union, why should Wal-Mart be punished? I don’t know how much extra that would cost Wal-Mart, but it is nothing more than another form of taxation. Wal-Mart practically gives away its health insurance now at only $155 a month. What do they have to do – give it away for free? Or pay people to enroll? My family health insurance premiums and a health savings account come to about $13,000 a year. It sickens me that… Read more »
Jonathan Levy
Guest
Jonathan Levy
15 years 10 months ago
“Bills of attainder, ex post facto laws, and laws impairing the obligations of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. … The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and less-informed part of the community.” – James Madison, Federalist Number 44, 1788. Legislation that punishes one person or group without trial is unconstitutional. Wal-Mart is going to have to show that the law was written to target them and not with the intention to promote health care benefits among all the huge employers in the state. Of course, the best argument will be that Wal-Mart is the only company in the state the conforms to the specifics under the new law. I don’t know how many people Wal-Mart hires in Maryland, but… Read more »
James Tenser
Guest
15 years 10 months ago
Fascinating and creative gambit by Giant and the Union. Seems to me, however, that setting a fixed minimum percentage for health care spending is untenable on its face. For one, it is clearly aimed at Wal-Mart only, and love ’em or hate ’em, we’re not supposed to operate that way in this country. For another, it removes one form of incentive for employers and plan operators to hold the line on costs. Now, I’d like to see a more intelligent economic analysis that shows whether Wal-Mart (or any other large employer) is contributing its fair share toward health care of its employees. The formula should balance what a company pays in versus the actual costs incurred on employees’ behalf. Certainly, the States should not be making up the difference. If any company is in fact shown to be a “free-rider” on health care costs, then the rules should be changed to close that loophole. Maybe that would lead to a more useful standard that can be fairly applied. My idea would be to prevent exploitation… Read more »
John Rand
Guest
John Rand
15 years 10 months ago
This is always one of those debates that are fascinating, because it isn’t about what it purports to be at all… it’s a bill that is clearly being labeled as targeted at WMT, and it most assuredly is. But the real debate ought to be about health care, and it most assuredly is not. Health care is neither laissez faire nor socialized in this country – instead it’s an insane patchwork of isolated programs that favor executives at the top and poor people at the bottom. If you have the money to pay for what you want, it hardly matters. If you have no money, someone else pays and you don’t know how or why. If you are middle class, you pay for the hospitals and doctors and drug companies twice: once in taxes and once in premiums, and maybe a third time in deductibles and “non allowed” costs. The provider companies, both insurance and health care, somehow all seem to make a ton of profit and an awful lot of families squeak by with… Read more »
Edward Herrera
Guest
Edward Herrera
15 years 10 months ago

“Capitalism needs to function like a game of tug-of-war. Two opposing sides need to continually struggle for dominance, but at no time can either side be permitted to walk away with the rope.” – Pete Holiday

More laws; fewer freedoms. Companies work hard to be leaner but Americans like living fat.
What is Maryland’s motivaton to try this case? This case is a symptomatic solution, not a root cause cure. 8% or 20%… who will foot this bill? Wal-Mart will never foot this bill; the consumer will. This is not the answer.

The fork in the road is in front of governmental regulation and this case is begging to be tested.
Could Maryland versus Wal-Mart be the battle that ushers in the future of American economics?

Gene Hoffman
Guest
Gene Hoffman
15 years 10 months ago

What strange bedfellows, Ahold’s Giant Foods and the union, make. Giant Foods let itself get put into a health cost bind in the Maryland/DC area. Then in comes the 800, no the 8,000 pound gorilla, Wal-Mart, to operate inside and outside the Beltway. Apparently desperate, Giant Foods joins up with the very union that put them in the vise to jointly resort, via bald politics, to sock it to a more astute and resolute company, Wal-Mart. Hang tough, Wal-Mart. As for the Maryland legislature, I borrow the phrasing of Dr. Phil, “What are you thinking?”

Mark Burr
Guest
15 years 10 months ago

What surprises me daily in the continued rant against the notorious bad guys is the tremendous amount of displaced energy. No wonder the guys in Bentonville seem to be laughing their fool heads off.

Wal-Mart does what Wal-Mart does because they can – it’s really pretty simple. Legislation, damnation by the press and labor unions, and the cries of the distraught competitors won’t change it. What will change it is when Wal-Mart can’t do what they do because it no longer works. That day will only come when other retailers pay more attention to their work than to Wal-Mart. You don’t see WMT spending any excess energy on anything but what will benefit them and their customers. Right or wrong, impact to community, impact to country, business, competitors, is meaningless. Until countless better mousetraps are made, and a lot less whining and a lot more work is done, WMT will continue to do what WMT does.

Don Van Zandt
Guest
Don Van Zandt
15 years 10 months ago
I don’t normally contribute frequently to these Discussions, much less twice on one topic, but I am appalled by the “dead heat” in the quick poll being run about this legislation. Half of the respondents think this blatantly unconstitutional, anticompetitive, punitive, and (possibly) politically motivated (I’ll offer up on blind faith only suspicions that there might be ongoing multiple contributions from Ahold and the union) attack on Wal-Mart is a good idea!!!!? (Try telling me with a straight face this is not directed solely at Wal-Mart.) This is without doubt one of the most bald faced examples of cronyism I think I’ve ever seen (defined as “let’s help the boys that live here and can’t afford/figure out how to run their business efficiently to make money”.) Are we truly buying the rubbish that this is about cutting health care costs for the state? I hope that every single legislator that votes for it gets run out of town on a rail. Kinda makes me ashamed to talk about free markets and democracy in America.
Rick Moss
Guest
15 years 10 months ago

DVZ… I certainly won’t attempt to take the opposing point of view on this particular legislation, but I do want to point out that the Poll asks for an opinion on the broader issue. Many poll-takers may be assuming that the laws could (theoretically) be written to be more even-handed. They may feel that the government should intervene in some way to force big business to “carry more of the load.” So, divorced from this singularly anti-Wal-Mart situation, perhaps they see potential in the idea.

Now don’t shoot the messenger…I’m just tryin’ to ‘splain.

Don Van Zandt
Guest
Don Van Zandt
15 years 10 months ago

Rick

OK maybe I had a SMALL rant going on. I appreciate your measured response. I still will go on record by saying TANSTAAFL (There ain’t no such thing as a free lunch). We can talk about legislating health care costs onto employers, but we are all ultimately going to pay that bill in higher prices. That is no different than raising taxes on every American who ever purchases a product. The end result is the same with more paperwork to get there.

Until people take personal responsibility for their own health and well being in this country (living and eating responsibly, and enrolling in insurance programs offered by companies) we will continue to have a debate about the system. My only request is that we address that issue head on and not let people become convinced by political hacks that it has anything to do with “irresponsible big business.”

Edward Cuttle
Guest
Edward Cuttle
15 years 10 months ago

When one commentator described this as a moronic bill, it might have been the understatement of the year. Should the morons in MD pass this, they can kiss economic expansion good-bye as companies will look elsewhere to locate or expand. A free market place is in fact free and no one is forced to work for Wal-Mart or anyone else for that matter.

Wal-Mart does not need to apologize for the healthcare it offers, as the employees pay very little for it compared with many other companies, and the coverage is decent.

Edward Cuttle
Guest
Edward Cuttle
15 years 7 months ago

What a dynamic duo — the union and a non-competitive grocery chain pandering to the state for a legislative bailout. Percentages can be very misleading. A comparison of the benefits provided and not just the % of payroll applied needs to be factored in. I would suspect WM has greater buying power then Ahold’s Giant Foods and may provide comparable benefits for a smaller % of payroll. Oh well, Wal-Mart could leave MD tomorrow and never miss a beat.

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