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Wal-Mart: Lower prices, rising public healthcare costs?

A Healthy Choice

A movement builds to take on Wal-Mart

BY Hans Johnson

Until last year, Wal-Mart, the global retail chain known for undercutting local competitors by curbing wages and benefits, enjoyed so much clout that it placed its sprawling warehouse stores practically at will. But grassroots challenges to the healthcare practices of America’s largest employer have stalled its expansion bids, exposing a bullying streak beneath its homey veneer of red, white and blue.

The skirmishes feature charges that Wal-Mart racks up huge profits while covering health care for just 45 percent of its workers and freeloading on taxpayers, who are stuck with the tab for the uninsured and their family members. The conflict pits a wide alliance of interfaith, labor and community groups against a retail chain whose profits topped $9 billion in 2003, with 3,200 outlets and 1.2 million employees in the United States alone.

In defending the very premise of the New Deal and reasserting the notion of a social contract, the campaign to rein in Wal-Mart could define the next decade of progressive organizing, policy and politics.

“The platform that Wal-Mart keeps advocating is bringing in jobs to low-income communities,” says Rev. Michael Pfleger of St. Sabina’s Catholic Church in Chicago. “But low-wage jobs, often without health care, keep families in poverty and keep people in shackles.”

Pfleger marshaled a diverse coalition of ministers, small business owners and union activists that in May headed off Wal-Mart’s drive to change zoning laws and open a mega-market on his city’s South Side. A Wal-Mart spokesman even had to refute charges that the company’s wage and health policies are exploitative. “We are not the evil empire,” he told USA Today. A majority of the aldermen were poised to block the proposal, and the bid was withdrawn.

At Wal-Mart, full-time workers have to endure six months—and part-timers, two years—before applying for health coverage through the company. Wal-Mart told the New York Times in November that about 77 percent of its employees are eligible for health coverage through the company plan. But since Wal-Mart saddles its staff with 33 percent premiums, the coverage often costs more than $200 a month per worker to maintain—a steep price for workers making between $8 and $10 per hour. As a result, just 58 percent of those eligible, less than half of all workers, or about 537,000 people, actually have the insurance.

This compares with the complete coverage that became common for workers and their dependents after World War II. The rise of collectively bargained union contracts in the era of Franklin Roosevelt and Harry Truman gave rise to the notion of a so-called social contract. It stipulated that a worker receive livable wages and health benefits in return for loyal hard work.

Not all companies have torn up the social contract. Costco, a competitor in the large-scale retail business, provides insurance to more than 19 out of every 20 of its workers and pays more than 90 percent of the premium.

When Wal-Mart bows out on covering the healthcare costs of staff members, the public often picks up the tab. More than 10,000 Georgia children whose parents work at Wal-Mart are on a state health program, thus neatly passing on the $10 million yearly expense to state residents. And in California, taxpayers are footing the bill for about $32 million in healthcare costs from Wal-Mart workers that the employer would typically cover.

Such revelations are the latest black eye in a string of high-profile setbacks. In August, community activists along with union members involved in the Metropolitan Washington Council of the AFL-CIO discouraged Wal-Mart from plunking down a mammoth store in the city’s northeast quadrant. Facing rising community hostility and the threat of bad publicity, Wal-Mart backed down.

The triumphs in Chicago and Washington follow an April victory near Los Angeles. By a two-to-one margin, voters in Inglewood rejected the retailer’s bid to circumvent a zoning board and approve a superstore widely seen as disruptive to local businesses, traffic patterns, and the quality of life.

Wal-Mart has fought back, joining with California Gov. Arnold Schwarzenegger in attacking a state ballot measure that would have mandated either corporate coverage for workers or payments into a state plan. Opposed by half a million Wal-Mart dollars, Proposition 72 very narrowly failed on November 2.

Local coalitions and policy-makers remain keen to put some checks on the retail giant. “Wal-Mart executives chose to remove the responsibility from themselves,” Mike Kreidler, former congressman and current state insurance commissioner for Washington state told the New York Times. He is working with state lawmakers to pass a measure similar to the California proposition.

Having succeeded in moving the debate about Wal-Mart beyond the public’s almost religious fixation on low prices and into the realm of healthcare, activists are adhering to theologian Reinhold Niebuhr’s encouragement “to be wiser than our creed.” Niebuhr, a mentor of Martin Luther King Jr., understood the danger of Americans being seduced into undermining their own way of life. Faced with a grave threat to healthcare, labor and community leaders are reasserting King’s vision of a beloved community and rising to the occasion to create it.

Hans Johnson, a contributing editor of In These Times, is president of Progressive Victory, based in Los Angeles and Washington, D.C. He is a columnist and commentator on labor, religion and trends in state and national politics.

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