Oct. 27—Job seekers who aren’t in peak physical health better think twice about applying to Wal-Mart. An internal memo sent to Wal-Mart board of directors proposed the world’s largest retailer cut health care costs by discouraging unhealthy people from working at the corporate giant, which in 2004 made more than $10 billion in profits.
In the 27-page undated memorandum released this week, M. Susan Chambers, Wal-Mart’s executive vice president for benefits, expresses concern that workers with seven years’ seniority earn more than workers with one year’s seniority but are no more productive and proposes steps. Among the steps Chambers recommends: Redesigning employment at Wal-Mart “to attract a healthier, more productive workforce” by ensuring “all jobs to include some physical activity” to discourage unhealthy applicants, according to The New York Times and other media reports.
Chambers proposed employees pay more for their spouses’ health insurance and called for cutting 401(k) contributions to 3 percent of wages from 4 percent and cutting company-paid life insurance policies to $12,000 from the current level, equal to an employee’s annual earnings.
Wal-Mart Speeds Up Low-Road Trend to Eliminate Job-Based Health Coverage
Wal-Mart’s proposals further the low-road trend among U.S. employers who have been systematically decreasing and eliminating employer-based health coverage. An Economic Policy Institute (EPI) report released Oct. 20 shows that even as the U.S. population grew, the rate of health coverage, especially employer-provided coverage, declined from 63.6 percent to 59.8 percent between 2000 and 2004.
Even without Wal-Mart’s proposed cost-cutting measures, fewer than half of Wal-Mart workers have health coverage on the job, according to an October 2003 AFL-CIO report. Many full-time Wal-Mart employees—a majority of whom earn only $17,043 annually, well under the $18,850 federal poverty guideline for a family of four in 2004—are unable to afford the company’s health coverage.
And by Wal-Mart’s own admission, 46 percent of the children of Wal-Mart’s 1.33 million U.S. employees were uninsured or on Medicaid, Chambers revealed in her memo. In Georgia alone, more than 10,000 children of Wal-Mart employees were enrolled in the state’s public health insurance program for children, PeachCare, according to a 2002 state government examination.
As a result, many Wal-Mart workers and their families turn to emergency rooms and other public health services as their only health care option. In 12 of the 13 states where data has been released and analyzed, Wal-Mart workers rely on public health programs more than workers from any other company in those states.
Wal-Mart Forces Taxpayers to Foot the Corporation’s Bill
In fact, Wal-Mart has made it a policy to rely on taxpayer-funded services to shore up its low-wages and unaffordable health care. In her 2002 account of working at low-wage jobs, author Barbara Ehrenreich says when she applied for a job at Wal-Mart, she was given a list of public agencies to contact because it was presumed she wouldn’t be able to survive on Wal-Mart wages alone.
And in an April 2005 open house at Wal-Mart’s Bentonville, Ark., headquarters, CEO H. Lee Scott Jr. told reporters many of the company’s workers relied on public health programs such as Medicaid because “In some of our states the public program may actually be a better value with…low premiums.”
But under the Bush administration’s current budget proposals, the public safety net is under attack and could leave many children without health insurance coverage, according to new findings by EPI. To date, Medicaid and State Children’s Health Insurance Programs (SCHIP) have successfully filled the gap created by lack of employer health coverage. While employer-provided health insurance coverage for children fell 4.8 percentage points, Medicaid/SCHIP increased by 6 percentage points, between 2000 to 2004.
A congressional study estimated each Wal-Mart store costs taxpayers an average $108,000 a year for its Wal-Mart workers’ children who are enrolled in state children’s health insurance programs. In 2004, Wal-Mart made nearly $288 billion in revenue in 2004 and made a $10 billion net profit, according to Fortune magazine.
Holding Wal-Mart Accountable
At the state level, working families and health care activists are seeking legislative support for “Health Care Disclosure Acts” that will enable states to determine which corporate freeloaders are shifting their responsibility to provide health care coverage for their employees onto state taxpayers.
Health Care Disclosure Acts were introduced in 12 states during the 2005 legislative session, and another 27 state legislatures have, or plan to introduce, disclosure legislation.
Also in an effort to prevent large employers from shifting their costs to workers, taxpayers and other businesses, state activists recently have launched efforts for passage of Fair Share Health Care Fund Acts. Such legislation requires large corporations to spend the same percentage of their payroll to provide health care benefits for their employees as the average large employer in the state, or pay the difference into a state Fair Share Health Care Fund.
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