George McGovern is my personal hero. Besides being a former Senator, presidential candidate and anti-war icon, he is also a really good historian. That’s why I’m saddened to report that he has a Los Angeles Times op-ed in which he gets the Wal-Mart health care issue all wrong:

The current frenzy over Wal-Mart is instructive. Its size is unprecedented. Yet for all its billions in profit, it still amounts to less than four cents on the dollar. Raise the cost of employing people, and the company will eliminate jobs. Its business model only works on low prices, which require low labor costs. Whether that is fair or not is a debate for another time. It is instructive, however, that consumers continue to enjoy these low prices and that thousands of applicants continue to apply for those jobs.

Maryland recently passed a law aimed at requiring Wal-Mart to spend more on health insurance. This is an extremely flawed path to healthcare reform. We need universal coverage, not piecemeal legislation designed to punish companies because they operate differently than their competitors.

My original answer to such concerns was that the perfect should not be the enemy of the good. That answer still holds. But now that the Maryland law is a few months old, there is more reason to support it. For one thing, Wal-Mart CEO Lee Scott has not only promised that the company won’t pull out Maryland, he’s written:

We will build more stores, create more jobs, offer even more affordable health care, generate more tax revenue, do more business with suppliers and give more money to local charities.

[emphasis added]

In other words, despite Wal-Mart’s whining, it’s business as usual in Maryland for the Bentonville Death Star. [I know. I don't trust him either, but for company with a business plan predicated on stretching labor out among part-timers, cutting those jobs to create full-time workers would actually be an improvement.]

More importantly, the same day McGovern’s article came out, we got news that Wal-Mart’s biggest competitor is joining it in the race to the bottom. Here’s the Wall Street Journal (behind the subscription wall):

Target Corp. has changed its health-care plan so that employees are responsible for more of the costs and it is considering entirely eliminating its traditional health insurance….

Under its new plans, Target annually will contribute $400 for individual workers and $800 for families. Monthly premiums will drop to as little as $20 for individuals. But deductibles will be much higher than Target’s traditional plan: as high as $5,000.

The other alternative is the health-reimbursement account, which is similar to health-savings accounts, except the employer funds them and they aren’t portable. The premiums paid by the workers are higher than the health-savings accounts, but the deductibles are lower.

If it sounds familiar, it should. Wal-Mart just did essentially the same thing back in February. It’s bad enough that most discount chains are non-union, but the bigger Wal-Mart grows the more likely it is that they’re all going to end up being as bad employers as Wal-Mart too.

Instead of worrying about the people who Wal-Mart might not hire why not protect the decent jobs in the retail and grocery industries that exist now? I say Fair Share Healthcare everywhere. The sooner the better.

This entry was posted on Tuesday, May 23rd, 2006 at 1026 by Jonathan Rees and is filed under Walmart. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.