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Walmart raising cost of its ‘always low prices’
by sticking taxpayers with health care bills

screwWalmart, the nation’s largest retailer, is at it again, transferring the cost of necessities for its always low-wage workers onto taxpayers.

A Huffington Post report says Walmart plans to start cutting the hours of some unspecified number of its 1.2 million U.S. employees to less than 30 per week, starting in January.

Walmart isn’t going to reduce work hours of people struggling to get by on already low incomes just to give them more time with their families. This move is all about shifting the health care cost of those workers to taxpayers — a backdoor form of corporate welfare.

An Obamacare provision excuses employers from providing health care benefits to workers regularly on the job less than 30 hours a week. At the same time, the American Affordable Care Act is making more Medicaid money available to states, in a good-faith effort to ensure more low-income and no-income Americans have access to health care.

By reducing work hours of its employees, Walmart clearly intends to shift their health care costs to Medicaid, a program intended for the poorest Americans, including those unable to work at all.

This isn’t a new maneuver for Walmart. A 2011 New York Times story details how the retail giant instituted cuts in eligibility while limiting coverage and drastically raising premiums prices and deductibles.

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Citing rising costs, Wal-Mart, the nation’s largest private employer, told its employees this week that all future part-time employees who work less than 24 hours a week on average will no longer qualify for any of the company’s health insurance plans.

In addition, any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan, although children can still be covered.

This is a big shift from just a few years ago when Wal-Mart expanded coverage for employees and their families after facing criticism because so many of its 1.4 million workers could not afford or did not qualify for coverage — rendering many of them eligible for Medicaid.

. . .In Wal-Mart’s 2012 health offerings, premiums will increase for some plans by more than 40 percent, although many of their workers pay relatively low premiums in comparison to more generous plans offered by other employers. But many Wal-Mart employees complain that their low premiums are accompanied by high deductibles that sometimes exceed 20 percent of their annual pay.

. . . Barbara Collins, a sales associate at the Wal-Mart in Placerville, Calif., said that the premiums for the H.M.O. plan for herself and her 5-year-old son would rise to $18 every two weeks from $10. Her big concern, she said, was that her deductible would jump to $5,000 a year, from $1,000 — a daunting amount considering she earns $19,000 a year. “I don’t know how I’ll be able to afford it if I go to a doctor or to physical therapy,” she said.

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The story notes Walmart also cut by half the $1,000 it had been putting into employee health care savings accounts, alternative plans that help some employees with costs not covered by inurance. The company had encouraged use of the health savings program, which is cheaper for it than health insurance.

Last July, Sen. Bernie Sanders, I-Vt., tweeted that the Walton family has more wealth — $102.7 billion in 2010 — than the bottom 40 percent of American families. Politifact checked that out and judged the statement to be true. Here’s what that looks like per the six Walton heirs to make the Forbes 400 list (all amounts in billions):

Christy Walton, $25.3; Jim Walton, $23.7; Alice Walton, $23.3; S. Robson Walton, $23.1; Ann Walton Kroenke, $3.9 billion; and Nancy Walton Laurie, $3.4 billion.

From Wikipedia’s Walmart entry: “For the fiscal year ending January 31, 2011, Wal-Mart reported a net income of $15.4 billion on $422 billion of revenue with a 24.7% gross profit margin.”

Walmart CEO Michael Duke’s 2011 total compensation was $18.7 million, according to Marketwatch.

Our bottom-line impression: Walmart can well afford to provide high-quality, affordable health insurance to all its employees, without cutting the payroll or workers’ hours. And after doing that, the Walton clan would still have more wealth than needed to live in splendor for 100 lifetimes each. The company’s CEO and executives would be in no danger of impoverishment either.

There’s only one way to describe Walmart’s treatment of workers and shifting of costs to taxpayers: raw greed.

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10 Comments

  1. Octopus says:

    The company leverages every cost saving measure and tax dodge possible – shifting the burden to people who can least afford it. Always without conscience. And devoid of corporate responsibility. On the procurement side, Walmart is the biggest bully on the block – coercing razor-thin margins from vendors.

    There is a reason why I have been boycotting Walmart … for more than a decade. I simply refuse to spend even a penny in any Walton-owned enterprise. This is Pottersville on steroids. Merry Xmas, everyone.

  2. Tom Harper says:

    Why do you want to redistribute the hard-earned wealth of successful Americans 🙂

    It’s ironic how so many millions of conservatives are unable to connect the dots: They love Wal-Mart as a shining example of free enterprise, and at the same time they hate “needy” people (who are often Wal-Mart employees) who have to use Medicaid and food stamps.

  3. S.W. Anderson says:

    Octopus, good for you. I think I have my better half onboard with that response, after telling her about this latest outrage.

    Tom, yes, and so many conservatives live in states where their preferred approach has so many people stuck in perpetual working-poor status, so that large numbers need Medicaid and food stamps just to get by. Connect dots? Nah, they’d rather turn on Fox for red meat and constant reassurance.

  4. Octopus says:

    SWA, let me elaborate on this comment: On the procurement side, Walmart is the biggest bully on the block – coercing razor-thin margins from vendors.

    Think about the implications: In forcing suppliers to also cut costs to the bone, this mega-penurious-damned-the-consequences assault on retailing crushes competition, drives smaller operators out of business, and drives manufacturing overseas to cheap labor markets. Thus, the Walmart mentality metastasizes cancer-like throughout the entire U.S. economy.

  5. Shaw Kenawe says:

    Wal-Mart is eveything I detest about big corporations. They have no loyalty to their employees and use them like cattle. Ugh.

    I hate their stores–the one time I went into one to see why people flocked to them, I felt claustrophobic and overwhelmed by the seemingly unendless rows of ugly garish STUFF. That was over ten years ago in Florida. I haven’t been in one since, nor will I ever set foot in one again. It was horrible.

    How they treat their employees is no different from how overlords treated the underclasses in the bad old Dickensian days.

    Republican values, indeed.

  6. S.W. Anderson says:

    Octopus, I wrote about that very angle a long time ago. It’s not just Walmart, though. Wall Street outfits, including hedge and mutual funds, are responsible for pushing lots of manufacturers and other businesses to send production overseas, buy more foreign-made goods and components, bring in foreign workers, etc. They demand ever more cost cutting, holding out the promise of ever-higher stock prices. And, guess where many CEO’s and executives get the bulk of their income? Stocks and stock options, of course. That means more money for them, especially when the money they make selling their stock and exercising their stock options leaves them paying the low, low capital gains tax rate, not the higher but already low for them income tax rate.

    All of this has resulted in massive job destruction and a prolonged, severe employers’ market for workers. With too many willing workers chasing too few jobs for a long time, the inevitable result is declining wages, deteriorating and disappearing benefits and the term “job security” becoming an oxymoron.

    Shaw, you’re quite right. I understand how you and Octopus feel about Walmart, and share the feeling. But something should be remembered when boycotting. As mediocre and exploitative as most Walmart jobs are, for a whole lot of Americans those jobs are lifelines. Having those jobs will never get most “associates” anywhere near the American dream, but not having them would leave many even worse off, with little chance for something as good or better.

    Walmart needs to change its approach, or to be compelled to change it. But the big-picture reality is that we need heavy-duty reforms and large-scale changes in our economy and economic system. We need reforms and other changes that make it possible for the 99 percent to do better, and the 1 percent to pursue greater wealth by means other than making themselves better off doing things that leave others worse off.

  7. Demeur says:

    I know how their healthcare scheme works having worked for a similar outfit many years ago. You can afford to “have” the insurance. You just can’t afford to use it.

    I’m hearing that Jan Brewer of Az is refusing to institute Obamacare. That should be an interesting fight. As I understand if a state doesn’t have a plan the feds will make one for them.

  8. Jolly Roger says:

    And yet, not a one of those welfare-hating wingers has a word to say about this. Odd, that is.

  9. T. Paine says:

    Mr. Anderson, I don’t know why you are suprised by this. I, and nearly every informed person on the right told you that this would happen. Nearly every corporation is going to pass the cost of Obamacare onto their employees or customers, or shift health insurance coverage to tax-payer Medicaid. While I don’t like Wal Mart either, the same will be true for nearly every other corporation or even qualifying Mom & Pop business.

    Further, this is precisely what that mendacious and incompetent ass Harry Reid, Princess Pelosi, and our Dear Leader wanted. They KNEW people would be shifted off of private insurances to Medicaid etc. in large numbers. This is happening all according to their design. This was part of the incrementalism that Obama admitted to in eventually creating a single-payer system. Private insurance will become too costly for people and their employers. Public state exchanges will flourish accordingly. Welcome to your just rewards! Ain’t progressivism wonderful?

  10. S.W. Anderson says:

    Demeur, that part about being able to have health insurance but not able to afford using it rings true for the kind of policy offered to Walmart associates. Always low wages and high copays and dediuctibles keep too many from getting the regular, preventive and follow-up care that ultimately help make medical care less expensive.

    J.R., that’s because so many of them look on health care as a business, like any other. If you want and can afford a yacht, fine, buy one. If you can’t, don’t. If you can afford a knee operation and need one, fine, get one. Othwerwise, don’t. I think most of us on the left think of needed medical care as something that should be available to all in a decent, civilized society.

    Paine, where did I express surprise? Are businesses going to pass on increases in health care costs? Of course. What you and the rest of the ill-informed right fail to understand because your favorite “news” and commentary sources choose to ignore or twist it, is that the Affordable Care Act is designed from the ground up to reduce medical care costs where possible, reduce the cost of obtaining insurance, and thereby, at the least, significantly slow the inevitable rise in health care costs.

    Some businesses will pass all of any cost increase along, whether it’s the cost of health care, taxes or a shortage of widgets. Others will pass part of the cost on, while still others will absorb the cost. I can understand a small mom & pop business having to cut back an employee’s hours, or do something. Walmart is a completely different matter, with its 24.7 profit margin and $422 billion in revenues. For Walmart, there is no excuse; it’s just greed.

    As for incrementalism leading to a single-payer system, bring it on. Everything else is a Band-aid.

    You’re saying as we head toward single payer, more people will use exchanges to buy insurance, so that with the larger pool of insureds costs will become so great no one will be able to afford insurance.

    No, Paine, you’ve got it backwards. Talk to an insurance agent. Any insurance agent will do. As companies compete for customers in exchanges where people can compare benefits and prices side by side, insurance prices go down. As the pool of insured people increases, the price of insuring each person goes down. The more insured people there are, the less it costs hospitals, clinics and doctors to provide their services.

    For heaven’s sake, man, quit watching Fox and listening to Limbaugh, or whoever your favorite Kool-aid dispenser is. You’re so misled and confused, you seem to really believe everyone on the left wants a horrible, completely unworkable and unaffordable health care system because . . . ? I can’t even guess. Because ACORN put us up to it? You tell me why we would want that.