Taxpayers Pay for Wal-Mart Employee’s Health Care so Wal-Mart Doesn’t Have To

090316-walmart-hmed-217p_hmedium.jpgAs the nation engages in vigorous health insurance debate, there is, perhaps no greater example of why we need a public option than the example of Wal-Mart’s health insurance offerings. Employees of the conglomerate are no longer treated in the manner in which Sam Walton wished them to be treated – fairly, with honest compensation for honest work. Instead, Wal-Mart’s benefit system is an intricate spider-web of rules and caveats designed to discourage employees from partaking of the private system and encourage them to use the public system of welfare and Medicaid.

If costing America 200,000 jobs between 2001 and 2006 by importing cheap, lead infested product from china wasn’t enough, Wal-Mart, at the very least, makes it more difficult by far than the average company for its workers to obtain, use, and pay for health insurance.

To put the impact that the cost of health care has on the average Wal-Mart employee in perspective, one must look at the average pay and average hours of the employees. A cashier at Wal-Mart makes $8.44 an hour and works an average of 29 hours a week. This equates to about $12,700 annually. To be fair, a department manager makes, on average, $11.99 an hour  and, as it’s safe to assume they average 40 hours a week, and make $25,000 a year.

Now we know what the average Wal-Mart employee makes – lets take a look at the menu of health insurance they have available to them. First- keep in mind that only 43% of Wal-Mart employees have health insurance . We’ve established that the average cashier at Wal-Mart makes $12,700 a year. If they opt for the cheapest individual health insurance plan, they’ll spend $3,049.00 or if they have a family, the best policy with the least amount of possible cash out of pocket will cost them $7,917.00 annually, leaving them about $4,500 a year to live on.

Obviously, this is not sustainable. Wal-Mart employees do not buy this health insurance if they are the primary bread-winner. They simply can not. But they do still get sick.

This is where you and I come in. Last year, Wal-Mart posted $12.73 Billion dollars (that’s with a B, folks) in profit, yet in the twenty-four states that post such data, Wal-Mart topped the list in employees taking public health assistance, to the tune of $898 per person.

Now read closely- I fully endorse the right of American corporation to make big fat healthy Billion with a “B” dollar profits. Just don’t do it at my expense, ok? Wal-Mart’s use of taxpayer dollars to subsidize their profit isn’t ok with me. I have not set foot in a Wal-Mart since I was first made aware of numbers like this seven years ago and I will not until they return to the days of Sam Walton, who promised “Share your profits with your associates, and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations.” In seven years, the numbers haven’t changed. Memos have been released that verify that Wal-Mart does this intentionally; denying full-time workers adequate hours and encouraging high turn-over in order to ensure that workers don’t qualify for insurance anyway.

Health insurance reform will shift the burden off the taxpayer and back onto Wal-Mart and it’s employees.   Supporting a public option is crucial – but do not let the employer mandate go by the wayside in the process.


 

Comments

  1. cfreyja23 says

    It’s also unfortunate that employees usually reinvest their income by shopping at Walmart. In most areas, Walmart has the lowest prices, so its own employees can’t really afford to shop elsewhere. Your research is obviously more intensive than merely watching a documentary, but watch “The High Cost of Low Price” if you haven’t seen it already. A sad business.

    • Nici says

      WalMart also offers store associates a discount – to the tune of 25% – which only encourages the employees to shop there. (Source: schoolmates and an ex-brother in law who worked for WalMart.)

      No lie – the company has gotten only more ruthless and profit driven since Mr. Sam Walton first turned over the running of the company, and later passed away. There was so much potential for good there – all wasted.

  2. AntiSarah says

    Thanks for bringing this topic out into the light of day, Kelly. It’s disgraceful that WalMart treats its employees like gum on the bottom of its executives’ shoes–like they are nothing more than nuisances and have no worth to the corporation whatsoever.
    WalMart should be ashamed of itself. Sam Walton would be shocked and appalled at what his company has become.

  3. Shortstuff says

    I refuse to step foot inside of WalMart. The above is just ONE of the reasons why. The others involve the demise of mom-and-pop businesses in small towns after WalMart descends upon them.
    Sam Walton must be spinning in his grave. The employees are nothing more than slaves to the current owners and their merchandise (which used to be touted as “American made”) is now just cheap crap.

  4. artemusg says

    Wal-Mart should, of course, be ashamed. But the company stays in business because people continue to spend money in their stores, lots of money. Many of you know that my wife teaches graduate school courses in health care administration. Many of her students have written about the number of people using public health care resources who are Wal-Mart employees. One student documented that W-M employees consumed more public health care dollars in Florida than any other group of people.
    I’ve said before that Republicans are VERY good at finding and keeping voters who cannot understand what is in their own self interest. And it’s the same thing with lower income folks who continue to shop at Wal-Mart, unable to understand the consequences of supporting such a greedy corporation. Harnessing the power of our own economy to bring about change seems beyond their understanding, so we continue to plod along, rewarding rich people.

  5. AstrosGirlKel says

    artemus, You know all those folks that complain about illegals draining the health care system? They should complain about Wal-Mart employees. Here’s what Wal-Mart employees cost TEXAS ALONE in 2005 (this is an estimate):
    Texas
    2005 – Total # of Wal-Mart Employees in State: 151,994
    2005 – Estimated # of Wal-Mart Workers on Medicaid: 20,073
    2005 – Estimated # of Wal-Mart Dependents on State Health Programs: 4,947
    2005 – 2005 – Estimated Total Cost; Federal & State:$134,161,466
    This link has an interactive map, you can click each state and see what Wal-Mart costs them in taxpayer dollars.

  6. Voice says

    One of many reasons I haven’t set foot inside one of their stores in years either. Their policies, plus the god-awful smell of the cheap dyes from their lousy products made overseas are enough to make anyone sick to their stomach.

  7. SSTMelon says

    I abhore Walmart, and don’t shop there precisely because of those nagging little externalities they produce like exploited foreign workers, an undercompensated sales force, and toxic substances in the cheap plastic junk they sell.
    But, to be fair, the stats you’re citing are outdated. Walmart, realizing its PR was in the toilet particularly over its treatment of its workers, changed its health benefits policies and offerings so that now more than 50% of its workforce has Walmart-sponsored coverage. (http://www.nytimes.com/2008/01/23/business/23walmart.html). It’s also at least publicly backing an employer mandate in health reform efforts. (http://www.nytimes.com/2009/07/01/health/policy/01health.html).
    Walmart is hardly an ideal employer. And, like I said, I won’t be shopping there until it accounts for all the harmful externalities it produces (likely once the Sun goes cold). But Walmart has moved on, at least a little bit, from the truly awful policies it had just four or more years ago.

  8. stexcat says

    The big gimmick is making sure that their employees don’t work full time hours. This exempts the company form providing a benefits to the ostensibly part timers. This is not a rare or unusual thing in retail in this day and age. I know Penneys does it and theres probably a lot more. Walmart just has the highest visibility particularly in light of tsome of the lawsuits they have lost in recent years.

  9. AstrosGirlKel says

    SSTM- updated 2009-
    http://action.walmartwatch.com/page/-/Fact%20Sheets/2009%20health%20care%20fact%20sheet_040709.pdf
    A small improvement? Maybe – it’s hard to sift through the giant PR machine they have. Now – I’ll give them credit all day long on $4 prescriptions – with THAT program they saved the lives of many, I don’t doubt. Something should be said for that. But even if 50% of their employees are covered (by plans they still surely can’t afford), it’s well below the national average for companies of it’s size. Employees with a pre-existing condition still have to wait an addition year after the six month waiting period – making it 18 months (12 of paying premiums) before they can get coverage they need the most. I just don’t buy for a second that Wal-Mart has improved a darn thing except the least they possibly could to make a small PR splash.

  10. Delezzia says

    Sad gimmicks are right. Not only Wal-Mart but talk about crisis in HC – my husband is an EMT that worked for TX Children’s on FT basis. Laid off because it’s cheaper for them to use medics on PT basis from HFD because the city already pays for their benefits so the hosptial saves money by not paying for FT employees with HC, 401K, etc. Cutting corners everywhere.

  11. machine says

    AstrosGirlKel,
    That study that produced that $898/person figure has some other info that website you linked to didn’t mention. It concludes that WalMart is not unique in its propensity to increase state Medicaid spending; other low wage employers do it too, by creating the conditions that encourage employees to take advantage of Medicaid largesse.
    The author notes that Medicaid expenditures jumped after the Personal Responsibility and Work Opportunity Reconciliation Act was passed in 1996, allowing working poor eligibility for Medicaid. He quotes (and supports) another study that found that participation by low-wage workers in employer health plans dropped as participation in Medicare grew due to workers finding a relative wage increase by not having to pay health insurance premiums or co-pays with the Medicaid route. Workers were choosing Medicaid in an attempt to maximize the utility of income.
    Additionally, Hicks finds that as a low wage employer WalMart is no different from similar retail outlets like Target or Dollar General. He also points out that WalMart’s worker demographic is typically young, elderly or people seeking part-time work, and fall into a category of employee where lower compensation is typically the norm. To wit…

    … These findings support the rather unsurprising conclusion that Wal-Mart is a retail store that depends upon typical low skilled retail employees. Hence, they are likely to account for Medicaid use rates similar to other low skilled (hence low paid) workers in general. The surprise is the hullabaloo regarding publily sponsored health care adoption rates by the working poor.

    Hicks concludes that while WalMart employees do tend to increase state Medicaid expenditures, as an employer it is no different in that respect than other low wage employers.
    http://www.businessweek.com/pdfs/2005/michael_hicks.pdf

  12. SSTMelon says

    When you look at “employers of the same size”, you also have to consider what _type_ of employer they are. Here, you’re talking about big box discount stores, like Target and K-mart. While I don’t know anything about K-mart’s benefits program for its employees, I believe one of the two articles I cited in the earlier post mentioned that Target covers only about 40% of its employees (though apparently with a more generous plan that has fewer out-of-pocket costs).
    I think that, as a society, we really need to be paying more attention to externalities. How is it that we can buy meat for $2.99/lb? Why does this plastic toy cost only $4.99? What is it that _we’re_ not paying for…but someone else, somewhere else, is? When will we start caring? And how and when will these costs come back to bite all of us?

  13. AstrosGirlKel says

    SSTM wrote:
    I think that, as a society, we really need to be paying more attention to externalities. How is it that we can buy meat for $2.99/lb? Why does this plastic toy cost only $4.99? What is it that _we’re_ not paying for…but someone else, somewhere else, is? When will we start caring? And how and when will these costs come back to bite all of us?
    -
    Reposted because it should be said again.

  14. machine says

    You said “externalities”. Rrrrowwr! Pigovian pillow talk.
    The externalities you’re talking about are, I think, more or less localized to the region of production. Pollution in China, for example. Or depressed wages in Ecuadoran (sp?) coffee plantations. We haven’t really had to deal with the social costs of comparative advantage. Fair Trade makes you feel good at the expense of our providing a subsidy to the producer.

  15. FantasyLand says

    What? You all think this is something new? American tax payers subsidize way more than just corrupt ole Walmart. We subsidize nearly every industry in this country to deny us all health care. Not only do we fatten their wallets, we kill ourselves to do it.
    We are at war. Corporations have been waging war on us for decades. Guess what… they are winning. We sit back and suck up American Idol and Runway Project, oblivious of what they are doing.
    It amazes me that %20 of the country can control the other %80 of the country. Wasn’t America created to prevent just that thing from happening? Funny thing is we are not even talking about %20. More like %1 and the other %19 are brainwashed.
    “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. ”
    Adam Smith
    “What improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. ”
    Adam Smith
    You see Adam Smith got it. He understood that if you abused your power and exploited the poor that it tainted your soul and eventually drove you out of business. The irony is that most of these robber barons read Adam Smith, yet they ignore his warnings. They cherry pick what they want and interpret his words in exactly the way he warns about.
    Who cares about bi-partisanship. These monsters are killing us off slowly. Anyone with a brain understands that what we have isn’t working. Our health is too important to leave in the hands of privateers.
    They are lying when they say a government option will drive prices up. It will drive prices down, because they will be faced with real competition. We have to break the health insurance’s monopoly over our knee.
    “Monopoly…is a great enemy to good management.”
    Adam Smith

  16. FantasyLand says

    The “externalities” are monopolies. Here read this.
    “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”
    Adam Smith
    THIS IS WHAT IS HAPPENING… No great mystery. No complex conspiracy. Just industries getting together and controlling prices. From the prices of eggs to the price of houses, it is all a contrived system of exploitation.

  17. Bobo Amerigo says

    I couldn’t agree with you more.
    I’ve worked in companies large and small, government agencies, and attempted, with others, to get a high-tech start-up going. That’s my way of saying that I’m not inexperienced in corporate ways.
    From “creating” a corporate culture to incentive programs, I do believe that corporations want to keep this country’s workers in a serf-style relationship — use us, but don’t support us when we need it.
    It’s infuriating. And, I think, harmful to the nation’s overall economic activity.

  18. vikinghou says

    FantasyLand wrote:
    “Corporations have been waging war on us for decades. Guess what… they are winning. We sit back and suck up American Idol and Runway Project, oblivious of what they are doing.”
    You’re right. And should we be surprised when one-fifth of Americans believe the sun revolves around the earth?

  19. FantasyLand says

    HAHA.
    Big ball of fire in sky, come save us! Me no want to pay huge health care premiums so CEOs of corporations can afford to send their little ones to private school in Europe.

  20. Clearlakedoc says

    i dont think it was PR, SST. I suspect it may have something to do with Calif WM employees suing and recently winning a lawsuit over benefits and wages, etc. Its possible that workers from that state alone could be responsible for a 7% jump.

  21. Clearlakedoc says

    Kelly, excellent topic and post! i read an excellent article in Playboy (yes, i read the articles!)inre to Wal-Mart a few years ago. It all changed when Sam Walton died. Before, it was “American Made”, and executives in Bentonville, Ark. (company HQ)were NOT allowed to show excess ala big cars, big houses, big jewelry…Now, Sundays are SHOWTIME and its “Made in China”. The article also claimed for every WM job created, 9 were lost in the community in the form of small business employees. I believe it. Ive seen it happen before my very eyes here in Western Ks. The sub-30 hr weeks to avoid FT benefits was covered, as well as OT fraud. It seems WM requires a certain amount of stocking or straightening each shift. If you have a lot of customer assistances and you dont get your duties completed, you stay for free until done.
    Ive known a couple of people who either knew Sam pre-WM, or their daddy worked with him, and they said he was good guy with a dream (Superstore). The Evil Empire took over after he passed.

  22. Roger Brad says

    The employees of Wal-Martare are straightly cheated and torched by the company itself.Despite of providing a anonymous beneficiary health insurance system by the company to all its employees ,it is intricating a burden like a insect in the spider-web in the name of rules and caveats that bound them to opt for company welfare and Medicaid system than from private system.dr marlene

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