Retailers Forced to Pay Benefits by New Law

Discussion
Sep 28, 2005
George Anderson

By George Anderson

Suffolk County on New York’s Long Island has passed a bill that intends to make large employers that sell groceries, primarily non-union businesses, pay a greater share of their
employees health benefits.

The bill known as the Fair Share for Health Care Act applies to retailers such as Wal-Mart, Target and BJ’s Wholesale that meet size and revenue standards. It requires employers
to contribute at three dollars for each hour an employee works. Companies would not be allowed to make any corresponding deductions from a worker’s paycheck.

The bill had broad bi-partisan with one holdout. Allan Binder, a Republican, called the Fair Share for Health Care Act “the worst bill I’ve seen in my 16 years as a legislator.
It’s anti-taxpayer, anti-consumer, anti-business, anti-growth, and anti-Suffolk County.”

Paul J. Tonna, a Republican colleague of Mr. Binder, disagreed. “Wal-Mart has profited off the public sector to the tune of billions of dollars,” he told The New York Times.

Moderator’s Comment: How will the Fair Share for Health Care Act impact the competitive position of retailers (unionized and non-union) in Suffolk County?

George Anderson – Moderator

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10 Comments on "Retailers Forced to Pay Benefits by New Law"


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David Livingston
Guest
15 years 5 months ago
I think this $3 per hour tax is nonsense. First of all, many Wal-Mart employees simply are not going to enroll in a company insurance plan unless it is totally free and the company does all the paper work. Why should a company be taxed because its employees refuse the insurance? Employees who are offered employer paid insurance like at Wal-Mart typically do not qualify for state health programs. If they are on a state program, its because they are a part-timer or have no seniority. Even union shops don’t offer insurance on day one of employment to part-timers. Many of these employees don’t understand the concept of insurance and what it means. How will the tax work? Will they have to pay it on employees for whom they already contribute towards their health insurance? Will they have to pay it even if an employee is covered by another family member? Will they have to pay it if an employee is just a part-timer? What about employees who refuse to enroll in health insurance? What… Read more »
M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
15 years 5 months ago

Mark Lilien definitely hit the nail on the head with his comments. This move by Suffolk County is a positive step toward ameliorating the public-service costs incurred by large, non-union employers providing substandard healthcare benefits. But, only a step.

Don Van Zandt
Guest
Don Van Zandt
15 years 5 months ago

Folks –

Before everyone pontificates on how WM, Target and BJ’s have been “feeding from the public trough” on health expenses, I’d like you all to tell me if that analysis ignored how much prices have been lowered by their entry into the market. I’d like everyone to then add up what those retailers ALREADY pay for employee healthcare, plus the savings from lower pricing on food and general merchandise items that employees pay.

Then I’d like you to factor in the potential rise in purchasing power and/or discretionary income created by those lower prices to non employees and have you provide empirical evidence supporting this law.

It has a lot of “feel good” for the union and union shops, but it will have the effect of raising prices and lowering living standards for more than just their employees. These chains are not raping the consumer and don’t have bottomless pockets. Costs will be passed on one way or another. Just remember TANSTAAFL (There ain’t no such thing as a free lunch).

Perry Cheatham
Guest
Perry Cheatham
15 years 5 months ago
Throughout this great debate on ‘how bad’ WM’s health insurance really is, I have yet to see a WM employee complain. I wonder why this is? It is the unions who are beating the drum, not the employees of the company. Now, it is being legislated? I think it is ridiculous. There is always going to be a certain segment of the population that is going to take advantage of government subsidies, no matter what is offered to them. I work for a company that does provide affordable health insurance, yet we still have employees who are subsidized through the government because no matter how you slice it, it is going to be less expensive for them (FREE). I truly believe that until you have a coalition of current WM employees who start banging the drum that the company needs to provide better health insurance you will never convince me it is true that they do not do their part. When government starts legislating what benefits, how many benefits and how much company’s must contribute… Read more »
David Livingston
Guest
15 years 5 months ago

Depending on how this turns out, employees are going to have to shape up or ship out. None of these companies is going to put up with an extra $3 per hour for casual employees. Most of these companies already offer health insurance to full time workers at pay at least $3 per hour towards their coverage. Where it hurts is having the $3 per hour tax on employees who are part-time or simply choose not to have insurance for what ever reason. In the end, I’m sure Wal-Mart, Target, and such will find enough loopholes to make this law meaningless.

Mark Lilien
Guest
15 years 5 months ago

This is the beginning of a great solution to a terrible problem. It isn’t perfect, but perfection is the enemy of progress, since perfection is never achievable. If it discourages food retailers from opening new stores in Suffolk County, it will strengthen the remaining retailers. Since all food retailers will have to pay for some health benefits, no one is disadvantaged, unless they are near the Nassau County border. This is the best solution for Suffolk County taxpayers, who’ve been paying for the working poor’s medical care, and it helps to level the competitive playing field. A few weeks ago, RT reported that WM wanted the competitive playing field leveled, so I’m sure WM is happy. My guess is that businesses who claim they can’t afford it (1) would go out of business anyway, or (2) are economic ignoramuses. There are business people who claim they can’t afford the minimum wage. Should Suffolk County allow them to pay people $1 an hour?

Michael Justice
Guest
Michael Justice
15 years 5 months ago

If local government are willing negotiate benefits for employees, then those employees may as well decertify the unions they belong to and save dues.

Anna Murray
Guest
Anna Murray
15 years 5 months ago
The health care debate: every time I read an article on it, I just want to put my head in my hands. It seems every thinking person views our healthcare system as broken. The Suffolk County effort is just one (desperate?) attempt at un-breaking it. What is it? –Drug companies and over-priced drugs? (Is it research or marketing?) –Doctors ordering every test but the kitchen sink? –The insured covering the uninsured? –Fraud, greed, bureaucracy? What I want is the BEST minds in government, business and medicine to tell us — Why is it that our system is broken? Which factors, exactly, are breaking it and what can we do about it? Then I want our leaders to mobilize public support for a plan. But there is no motivation for such an effort. Many people have suggested that — aside from the fact that it is a polarizing topic — Congress and the President won’t deal with the issue because they don’t FEEL it. They have the best possible, most-easily-accessible health care in the world. So,… Read more »
Jerry Higgins
Guest
15 years 5 months ago

What in the WORLD is the government doing dictating to businesses what benefits they are REQUIRED to pay? It would seem as though competitive hiring and retention pressures between the various companies should take care of that issue.

George Anderson
Guest
George Anderson
15 years 5 months ago

This is a bad law, but it isn’t as if it is going to cripple Wal-Mart. The truth is that the company could easily do this itself and one wonders why a company that has proven its generosity over and over again doesn’t see the goodwill and business to be gained by shutting down its detractors by taking care of its associates better.

Wal-Mart has 1,800 employees working in its Long Island stores. At least a portion of those (percentage unknown) will now have a somewhat higher standard of living (assuming Wal-Mart doesn’t start laying off people to balance its costs) that they will be able to spend in their employer’s stores.

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