Stop Hurting Wal-Mart Employees
A Denver Post editorial complains, “Wal-Mart pays less than 1 percent of its $265 billion annual sales for health care.” But Wal-Mart’s profits in 2004 were just 3.6 percent of its sales, so 1 percent of sales amounts to 28 percent of earnings. Others complain 5 percent of Wal-Mart employees are on Medicaid, but that is comparable to other large retailers and the national average of 4 percent.
Seattle Times columnist Bruce Ramsey notes Washington state’s Medicaid plan “enrolls children from families of four with incomes up to $48,000 a year.” No private plan can compete with a tax-financed scheme that directly costs users nothing and pays all medical bills.
The lobbying effort behind these bills comes from competing grocery chains such as Giant, Safeway and Kroger, and from labor unions that carry their baggage. When Kentucky legislators discovered their Wal-Mart bill also would apply to Kroger, they quickly exempted Kroger by making the bill apply only to firms employing more than 25,000.
Legislators who take orders (and favors) from Wal-Mart’s rivals hope their meddling will raise Wal-Mart’s labor costs and thus render the company less competitive. But this is a delusion. The whole burden will be borne by workers and those forced into less-desirable work (or none).
Maryland’s mandate does not compel Wal-Mart to spend a dollar more on employee compensation. All it demands is that Wal-Mart pays no more than 92 percent of compensation as wages (or nonhealth benefits). Compelling Wal-Mart employees to accept a larger fraction of their pay in health insurance rather than cash is a particularly bad deal for housewives and students, usually covered under Dad’s family plan. It is also a bad deal for seniors covered by Medicare.
Read the whole thing.
This war on Wal-Mart never ceases to baffle me. All the company does is make money for its investors, provide jobs for those who want them and bring down prices on products through stiff competition with other stores.
What’s is so wrong about that?
