Maryland Voters Want Wal-Mart to Pay More for Healthcare
By George Anderson
The results of a new study released by Zogby International shows that two-thirds of Maryland residents want the state’s lawmakers to overturn Gov. Robert Ehrlich’s veto of the so-called Wal-Mart bill.
The proposed legislation would require all companies with 10,000 or more employees to set aside at least eight percent of payroll to cover healthcare benefits. Wal-Mart is the only company currently operating in Maryland that the bill would apply to.
A spokesperson for Wal-Mart said the poll commissioned by a group opposed to Wal-Mart’s business practices, Wake Up Wal-Mart, is slanted.
Nate Hurst told Bloomberg News, “This piece of legislation is neither fair nor a health-care bill. It’s just the latest tactic by organized labor to try and slow down our growth.”
“The feedback we are receiving from people across the state is that they think this legislation is a bad idea,” said Mr. Hurst. “More and more small businesses are coming forward and realizing the dangerous precedent this bill sets.”
Groups opposed to Wal-Mart are hoping to put pressure on Maryland lawmakers to override Gov. Ehrlich’s veto by pointing to one of the Zogby findings. According to the study, 74 percent said lawmaker’s vote on this issue will have either “a great deal” or “some” influence on how they vote in statewide elections next year.
Thirty-one other states, according to Bloomberg, are considering similar legislation to that proposed in Maryland.
In a separate announcement, Wal-Mart said yesterday that it created over 125,000 new jobs in the U.S. in 2005 and that the average hourly wage it pays to full-time associates in its store rose from $9.68 to $10.11 during the same time frame.
Lawrence Jackson, executive vice president for the People Division for Wal-Mart Stores, Inc., said in a released statement, “When we open a store, we often receive thousands of applications for just a few hundred jobs. That’s because working men and women know that our jobs pay competitive wages, and offer quality benefits, including affordable health insurance, and career growth opportunities.”
Wal-Mart maintains that every associate is eligible for health benefits for as little as $11 a month. The waiting period for associates to join, said the company, is in line with the policies of its competitors.
Moderator’s Comment: What will happen if the Maryland legislature overrides Gov. Robert Erhlich’s veto of the Wal-Mart bill? –
George Anderson – Moderator
I don’t think this bill was designed to provide people with health insurance but rather punish Wal-Mart since they are the only employer with more than 10,000 employees. This is just “feel good” politics because in some areas of the country picking on Wal-Mart is the cool thing to do. Wal-Mart already provides health insurance to employees that is comparable to other retailers. I don’t think an employer should be required to supply employees with personal services such as health insurance. Next, the government will mandate Wal-Mart give every employee a company car. Health insurance is a perk which is designed to attract and keep employees. People are free to choose who they want to work for. If they don’t like Wal-Mart’s benefit package, they should pick another employer to work for. Eventually the politicians will extort enough campaign contributions from Wal-Mart and the bill will be overturned. Health insurance should not be tied to company size, sales or profits. We could just tax everyone 8% and move to universal health care. But then low paid workers wouldn’t pull their weight and high income workers would feel they are paying in too much. My guess is our same old broken system will continue.
This excellent piece of legislation is helping to set a constructive precedent: that the largest profitable business in the world helps pay for its employees’ health care on a no-excuses basis. If the largest profitable company in the world can’t help pay for health care, who can? As time goes on, and the world does not come to an end because of this, perhaps the legislature will pass future laws reducing the minimum number of employees from 10,000, and making the percentage of payroll more realistic, since 8% is too low.
Demanding a perfect solution is the enemy of problem solving. Generally solutions come in steps, and this first step is constructive. Yes, it doesn’t solve the problems of financial waste, malpractice, medical care for the unemployed, the nursing shortage, poorly-run nursing homes, safe medical waste disposal, or poor nutrition. It’s a great first step and it hurts not one Maryland voter.
If you want this legislation calling for 8% of payroll, just do it across the board. Don’t do it as a vindictive, feel-good bill targeted to hurt Wal-Mart. What’s next, a bill requiring that businesses owned by Poles or people with red hair should pay a 2% surtax? I truly underestimated the number of ways people could dream up to go after Wal-Mart.
This is a great platform to step out and try to remedy a health issue problem. This is not the end all but maybe it is something that works thru a process. I think it would go a long way for Wal-Mart’s image to step forward and partner with Maryland to test this in good faith. It might be better than being forced to do it and accruing more bad publicity.
I believe this is yet another symptom of the much greater problem we have with our health care system in the United States.
In reports that I have read regarding health care benefit costs in other sources, the 8% is close to the norm and actually lower than what many employers offer. When Wal-Mart claims they are in line with the industry, it is necessary to define what industry they are talking about. When you look at retail as a whole, with dollar stores, discount retailers and the like, they are in line. When they entered the grocery arena, they are far below what many were receiving. I believe that this is where much of the disagreement comes from.
Wal-Mart has been good for the grocery industry by providing much needed competition that benefits consumers. They achieved much of their lead position by leading through innovation and being an early adopter of good practices. It seems that this would be a great opportunity to show that the PR they are releasing about treating their employees as good or better than the industry would be well served by stepping up and putting their money where their mouth is. After all, why is it OK to fund marketing and buy political favor but not OK to address the root problem?
Wal-Mart should innovate their way out of this one instead of fighting it if they really want to win consumer loyalty. They have both the resources and influence to make a change in the health care system if they really wanted to. Stories like this suggest that they are not really interested in the consumer but the bottom line. That has been the fall of many a giant; maybe this is the beginning of their decline.
If Governor Erhlich’s veto is overturned, Wal-Mart may be be the last 10,000-employee employer ever in Maryland. Meanwhile, Wal-Mart will lose interest in expanding further in Maryland.
It has become politically fashionable and media-fulfilling to bash Wal-Mart today. Perhaps Wal-Mart deserves it, perhaps not, but if governmental entities such as the State of Maryland move to put new requirements and new demands upon a company just because it is large company, it restrains expansion and creates a condition similar to the “church and state” situation.
It would be of interest (and relevance) to understand who commissioned the research behind this Zogby poll. No matter your view on the issue, it should be understood that political issue research is open to interpretation based on the wording of a question. While Zogby is a reputable firm, questions are sometimes shaped to further the interests of the sponsor.
Incenting – even requiring – large employers to fund health coverage seems reasonable and wise. Setting a specific minimum spending percentage – even for Wal-Mart – does not.
Setting a minimum standard will mainly ensure that most of the nation gets the minimum – lowering the bar for average people. Barring the complete national overhaul that our system desperately needs, health benefits should remain a way in which employers can compete to attract the best workers.
The Maryland bill may have succeeded in making a political point, but it seems unlikely to help anyone in need of health coverage. If our politicians were serious about reforming health care they’d advocate creation of a national risk pool, guaranteed eligibility for all citizens, and mandatory employer contribution.
Wal-Mart could certainly find innovative ways of finding loopholes to get out of having more than 10,000 employees. They could set up separate corporations within the group of Maryland stores such as making their pharmacies, tire and lube departments separate companies. I used to work for a grocery wholesaler and my paycheck was not from the company I thought I was working for. Wal-Mart is smart and they will mostly likely find a way to stay one step ahead of the law.
In RetailWire’s first discussion today, there is a list of at least 25 companies that were voted the top 100 companies to work for. Wal-Mart employees could just vote with their feet and move their employment services to one of the companies listed. But we know it’s not that easy. The Wegmans of the world will be hiring the smart, good looking people and Wal-Mart will be hiring the rest. Wegmans doesn’t mind providing health insurance to their workers because most of them are “keepers.” But Wal-Mart has built their business model on hiring less than ordinary people. And not just Wal-Mart but other low-end retailers as well. All of them but Wal-Mart have less than 10,000 employees in Maryland. Therefore, this bill is not about healthcare but rather making it easier on everybody but Wal-Mart to compete.
We have an old saying in the old country – “they would say that”. It applies to both Wal-Mart and the people who conducted the poll. Just like that other old saying about “lies, damned lies and statistics”, I’d say. It often makes me wonder just what people think they will accomplish with bickering like this. It costs money, wastes time and nobody gets anywhere. I can understand that neither side wants to throw up their hands and let the other side win but this is not the way to solve the dispute.
The real people involved, those who work for big companies and decide that they can’t afford to spend what they earn on healthcare insurance, are no better off. This is yet another dyke plugging exercise which ignores the real causes of the problem along with countless possible solutions we and many others have been discussing fruitlessly for a long long time. It would make far more sense to turn collective energies e.g. big companies, unions, government to addressing the underlying issues and resolving them rather than continue to squabble. Some people are unlikely to ever earn enough (or believe they earn enough) to pay for healthcare. This isn’t their real problem. Their real problem is that healthcare costs so much and they have to make tough decisions about what they feel they can afford.
While I can see Mark’s point about needing baby steps and it being better to do something than nothing, we also have to take into account the relative degree of truth in David’s as usual disparaging remarks about the people who choose (his term, not mine) to work for Wal-Mart. Finding a way to look after people who cannot or will not look after themselves, for whatever reason, is pretty important. Not easy and not cheap but important. Those who say that what you term a socialised system means that people who earn more will pay more as a reason not to do it may not be acknowledging the fact that the same thing applies when those same people shop and pay higher prices that are used to cover employers’ contributions. Whichever way you look at it, those who earn more will pay the costs for those earn less. It’s about time this was more widely admitted and a more sensible distribution of wealth agreed.
Wal-Mart should stop buying from any supplier located in Maryland, and should also lay off enough employees so that they have exactly 9,999 employees in Maryland.
I’m not sure the idea floated about making it multiple companies would fly – Sam’s Club is already a different “company” than Wal-Mart…
It is not the principle of requiring companies to spend money on healthcare that bugs me most about this (although that kind of paternalistic approach to government does rub me the wrong way), its the fact that they chose an arbitrary cutoff, and one which affects only one company. They should require it of ALL companies in Maryland, or none at all. Going after only the number one employer is reprehensible.