Economics

Following up on my note yesterday about Walmart: Rep. Anthony Weiner, Sen. Ted Kennedy, and Sen. Jon Corzine recently introduced the Health Care Accountability Act in Congress, which would require states to disclose the names of large employers whose workers are on Medicaid as a result of the companies refusal to provide insurance benefits. The purpose of this, of course, is to make public the names of companies inflicting costs onto already stretched state budgets. This Federal legislative effort comes on top of the local effort in Maryland to force companies to provide health care insurance — which failed because the Governor, Republican Robert Erlich, caved in to intense lobbying from Walmart and vetoed the bill. Most recently was the leaked memo from Walmart describing how the company planned to cull ill or potentially costly employees from its payrolls so as to reduce health care expense. Clearly up until now Wal-Mart shows no sign of accepting that its behaviour is anti-social. So we need to push back.

As a society we have three ways to respond to ‘Walmarting’ — allow me to coin the phrase. One is to accept that companies can do anything they want, and we all just have to live with the consequences, however nasty they are. Second, we can oppose the company’s actions and try to get them to change [Walmart Watch and Wake Up Walmart are two organizations dedicated to this]. Or, third, we can accept that big companies will always be rapacious and use things like cutting benefits as a way to shore up profits, but realize that we can legislate to get a national health care system so that unethical behaviour by companies doesn’t mean that our fellow citizens have to suffer. Of course we’d all like to think that Walmart and others had some ethics, or social awareness, but they don’t. So I for one will use ‘Walmarting’ as a rallying cry for national health care, which taxes on Walmart profits will help pay for. I can see some neat justice in that.

In case you hadn’t noticed Walmart is now the subject of a class action suit in Missouri where it is accused of systematically forcing its workers to work ‘off the clock’ and of deducting breaks from worker’s time worked. Times must be hard when the nation’s largest employer has to rob its workers like this. I generally don’t like to pick on individual companies, but Walmart will always be an exception: its policies are brutally anti-worker. A substantial number of its employees are so poorly compensated that they cannot support their families even though they are full time workers. [The two most common jobs at Walmart — ‘Sales Associates’ and ‘Cashiers’ earn between approximately $12,000 and $14,000 per year. The national Poverty Line, as determined by the Federal Government, is $15,260 for a family of three]. Its lack of health care benefits is legendary, so bad is its health care plan that many of its employees have to use public assistance to care for their children’s basic needs. That means that you and I are picking up the tab while Walmart reports growing profits and pays its shareholders dividends.

That is the point of my criticism: we are subsidizing Walmart so that they can turn around and offer low prices. Those low prices are only possible because Walmart has taken a page from Scrooge’s book. If it paid a decent wage and gave decent benefits its prices would have to go up. This is a problem for consumers: we like low prices, but do we all realize that some of our taxes are used to offset their underpayment of wages? When we add the tax subsidy and the prices together to get the true economic cost of the products sold by Walmart they don’t look so cheap! Moreover, if Walmart’s competition starts to play the same game, and who could blame them for trying to survive, everyone starts to lose. Wages are bid down, benefits are slashed and the social cost of welfare rises. Walmart thinks it is being smart dumping part of its costs onto the taxpayer, so far it’s been successful. But no wonder its image is awful amongst labor groups: Walmart is relentlessly anti-worker. We should be relentlessly anti-Walmart until it changes.