Wednesday, October 26, 2005

Walmart Shines Image While Slicing Benefits

"Our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance."
-- Walmart vice president M. Susan Chambers
Walmart Watch has received from an anonymous source and publicly released a Memo to the Board from company vice president M. Susan Chambers in which she outlines strategies for making more cuts in company employee benefit costs while trying to counter critics who say Walmart exploits its labor force.

As New York Times reporters in Bentonville, Arkansas, and New York summarize, "The theme throughout the memo was how to slow the increase in benefit costs without giving more ammunition to critics who contend that Wal-Mart's wages and benefits are dragging down those of other American workers."

Among the strategies the memo to the board suggests are --
  • Somehow discouraging more senior workers from staying with the company because, Ms. Chambers wrote, "the cost of an associate with seven years of tenure is almost 55 percent more than the cost of an associate with one year of tenure, yet there is no difference in his or her productivity;"

  • Charging employees a higher deductible;

  • Requiring employees to pay more for spouses' health insurance;

  • Cutting 401(k) contributions to 3 percent of wages from 4 percent;

  • Cutting company paid life insurance policies to a maximum of $12,000 rather than a benefit equal to the employee's annual salary;

  • Incorporating physical activity in all jobs;

  • Promoting health savings accounts, to which employees would contribute pre-tax dollars;

  • "Dissuading unhealthy people from coming to work at Wal-Mart;"

  • Encouraging small clinics to locate inside Walmart stores; and

  • Offering "limited funding" for new employees to buy private health insurance after 30 the first days, so Walamrt could make the 'powerful' public claim it "offers associates access to health insurance after they've worked with us for just 30 days."

According to the Times, Walmart employees "earn on average around $17,500 a year" ... Currently, "less than 45 percent of its workers receive company health insurance" ... and the new benefits policy being proposed could cost employees "out-of-pocket expenses of $2,500 a year or more."

In an interview with the Times, Ms. Chambers admitted that "46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid."


There is no better reason than an accident of history that health insurance for most Americans is tied to their employment. Far better, and cheaper, coverage could be offered through a national single-payer health insurance plan proposed two years ago by a panel of eminent physicians and health care professionals.

Wouldn't it make more sense -- and be better for the company's image -- if Walmart took the lead in urging Congress at long last to adopt that meaningful reform of our health care system?


California Health Insurance said...

It is unfortunate to hear that wal-mart has been cutting benefits. I hope this problem is solved and all the employees can have full health insurance.

Blue Cross of California said...

I hope walmart can work to provide benefits for there employees. They deserve decent benefits.