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  • There's A Very Good Reason Wal-Mart Supports an Employer Mandate

    Recent press reports, including a front-page story in the Wall Street Journal, have the news that Wal-Mart has signed a letter to President Obama endorsing the idea of an “employer mandate” – a requirement that employers offer health insurance to their employees.

    Why would Wal-Mart – the nation’s largest employer – endorse such an idea?

    Simple: It would cripple many of their competitors.

    Much ink has been spilled on the effect Wal-Mart has on small retailers. Wal-Mart’s large size enables them to extract low prices from manufacturers, and that – combined with efficient, computerized inventory operations enables them to undercut – and sometimes drive out of business – small “mom-and-pop” retailers.

    An employer mandate to provide health insurance would enhance Wal-Mart’s cost advantage. Wal-Mart has 1.4 million U.S. employees, and can negotiate a health insurance contract for them all at once. As a large multi-state employer, they can self-insure and provide coverage under federal ERISA regulations, which exempts them from costly compliance with most state health insurance regulations.

    Wal-Mart’s small competitors have neither of these advantages. Employers with less than 20 employees often pay more than twice as much per employee for the same coverage, and small employers must comply with sometimes-onerous state regulations.

    The employer mandate would impose much higher costs per employee on small retailers than it would on Wal-Mart. They would have to charge higher prices to compensate, which would put them at a substantial competitive disadvantage. Many of these small retailers would be forced out of business.

    Supporting the employer mandate is just another way large business can harness the forces of government to hobble their smaller competitors.

    (UPDATE: It is not just that the employer mandate gives Wal-Mart an advantage over small retailers. It turns out that Target has lower health benefits costs than Wal-Mart. An employer mandate could reduce or perhaps even erase Target’s cost advantage.)

    Posted in Obamacare [slideshow_deploy]

    44 Responses to There's A Very Good Reason Wal-Mart Supports an Employer Mandate

    1. Johnny Alamogordo says:

      WalMart has driven almost all of the small businesses from our town of 35,000 population. If Obama's socialist health care system is inacted we will truly be a one horse town with WalMart the horse

    2. Pingback: » Financial News Update - 07/01/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater

    3. Spiritof76 says:

      It is sad to see that there are no real capitalists anymore. They all want to collude with the government to gain market advantage using the taxpayers. That is why there is no John Galt.

      I have been a supporter of WalMart. I will certainly seek out Target or other stores to do my little shopping from now on.

    4. John D. Froelich, Up says:

      The entire idea of employer mandates, especilly for struggling companies, is a real job-killer.

    5. Pingback: Obama’s employee health-care mandate would help Wal-Mart crush their small business competitors | The Kansas Progress

    6. John, Greenwich says:

      This is a bit of a stretch. What Heritage and most conservatives don't understand is that there has been something of a sea change in the attitude of business to the provision of some sort of state sponsored and/or organized healthcare system. Btw I have run companies with up to 3000 employees so I know of what I speak. Over the past 25 years average premium growth has been around 8%, it dropped a bit in mid nineties with the HMO experiment but there have also been many years when it was in double digits. About 10-15 years ago as the burden became heavier companies started to shift more of it to their employees. They have over the last five years reached the limit of this process so that to take a typical example a healthy employee and family with a roughly $13,500 premium are paying probably $3000 to $4,500 of the cost. Faced with indefinite premium growth of at least 8% they realize something has to change. In a nutshell that's it. The Republican party and think tanks like Heritage are just not willing to recognize this reality and I have yet to see a remotely realistic plan come from those quarters. The Democrats at least have a plan. Instead of criticising Wal-Mart for facing a simple business reality Heritage needs to be putting forward proposals that work. I'll also make a somewhat broader philosophical comment if I may. It's this kind of obtuse, head in the sand attitude that is causing the Republican party to lose educated and upper middle class voters.

    7. wikwox,Delaware! says:

      There is Nothing, repeat, Nothing Socialist about Walmart. Walmart was essentially shamed into providing benefits a few years back and now looks to return the favor, nothing more. Walmart also go's out of it's way to keep employees on part-time status and thus not elligeble for benefits.Sound familiar? As for crushing the competition it's adapt or die, that capitalism, ain't it?

    8. Brad Raffensperger, says:

      If a political movement would stand up for the honest, hard-working tax paying American citizen and the small business owner, provide policies to support the American family, a movement who would resist military adventures and yet have a strong military defense, a movement that would truly hold the line on spending and hold the line on taxation, encourage business investment in American made machinery and new plants and whose underlying philosophy reflected the noble character and integrity of our founding fathers that movement would win in a landslide in 2010 House and Senate races and that movement would win in 2012.

      Right now we have crony capitalism and unionism. The big boys are taking care of themselves and the "little people" are getting the short end of the stick. The answer is not more government, is it less government. Any doubts… go get in line at the post office.

    9. Dave Chelsea, MI says:

      I think it is a far simpler and strategic reason -This position takes away one of the largest targets off Wal-mart's back and disarms Wal-Mart detractors from their argument that Wal-Mart is unfair to their employees. Remember, healthcare costs for companies that have a lower wage structure, is a far larger percentage of the total employee cost than for a company in the high tech industry or even the automobile manufacturing industry.

    10. coolfrank, NJ says:

      Walmart is of the consumers own creation. Don't complain if you shop there. If you want $7.00 dress shirts or $99.00 furniture thats up to you. However, US manufacturers cannot support a living wage plus benifits and meet competition from countries that don't.

    11. Vito D. DeGregorio says:

      So, explain how this is so beneficial to our company. The big corperation forces the smaller businesses out of business because they can't be competitive with the large corperations. Therefore the unemployment rolls increase, folks fall behind on their mortgages and lose their homes, businesses, etc. This is just another case of double-speak and big business and the unions meddling in small business to eliminate all competition. Who in their right minds would be stupid enough to fall for this idiocracy?

    12. Greg Mackey, Minneap says:

      WalMart is a parasitic organization that strips the bones off the community it resides in.

      Look at the public roads used to access a Walmart. They are usually dilapidated from a stream of heavy trucks moving in and out. Walmart usually negotiates tax advantages for itself that exempt contribution to local infrastructure. Their low-paid serfs have to foot the bill due to Walmart generosity in favoring the community with slave-wage jobs (with mandatory unpaid overtime).

      Look for Walmart to become a monopoly vendor. For as the economy crashes, big-box stores will be nationalized by Obama (and the federal reserve). Chinese poison food and poor-quality necessities will become a way of life.

      What happens when we are poisoned at Walmart and our universal health care does not acknowledge the disease?

      Die, I guess. Thanks, Barry and Ben.

    13. Barb Faulkner-Davis, says:

      To Spirit of 76: Good going! I agree, but I must tell you that you should let Walmart know how you feel and what that you intend to withhold your business- I did that yesterday, and actually got a reply from them. Of course, they probably don't care if just me, one small person, tells them that I won't patronize their stores…but, perhaps they would think differently if more folks did it! We all must fight to help our country survive; it seems almost hopeless, but I faxed all the Blue Dog Democrats last Thursday before the vote on Cap and Trade; a majority of them voted against the bill, and yesterday, I faxed all of them who voted for my opinions, a huge thank you, and wished them all a happy Fourth of July- The Blue Dogs are the conservative Democrats- they have a website, and these folks need to be contacted and supported; even if we are Republicans- they are more like us than some who voted for the bill and "call" themselves Republicans.

    14. MaryAnn, USA says:

      Government needs to get out of the health insurance business altogether. Concerning Wal-Mart, I will never shop there again.

    15. Bill Lynch, CT says:

      To all, and Mr. Greenwich in particular. Why is it that the US economy produces an excess of food, clothing, shelter, transportation, and almost every other necessity of life at lower, and lower prices, and higher and higher quality? But healthcare (and education) just goes up in price, which reduces the number of those that are covered, and with little improvement in quality? Answer: because healthcare and education operate in phony, make-believe markets in which the government plays a big role, and the consumer plays almost no role in selecting the service. If we really want lower prices, better qulaity, and expanded coverage, the answer is simple – get the government out of the market, and end employer paid insurance. Make people buy insurance (and education)the way they buy food or clothes or housing. Unleash the 2 greatest forces for prosperity – the American entrepreneur and the American shopper. But Obama really (and most Americans) really don't want expanded coverage, lower prices and higher quality. He (and they) really want more state power and collectivism.

    16. Jimmy, Belen, NM says:

      My first reaction was that Wal-Mart's employees are, for the most part, part-time employees, not subject to health insurance provisions… Why would Wal-Mart care what insurance costs?

      Wal-Mart is huge because they provide the goods we desire at the most reasonable price at one location. They also employ a large percentage of "unemployables", that is the older or less educated people. Wal-Mart is not a bad thing. I fear that targeting Wal-Mart will end up taking more dollars out of our pockets…

    17. Steve, Ohio says:

      John, Greenwich, You say you have run companies with as many as 3,000 employees. Following your comments, it is undertandable why you don;t run them any longer. Faced with the current prospects of single-payer or continuing with the same increases in premiums over time, is a false argument. I work in the insurance industry as a broker/consultant and I can tell you that the problems with rising healthcare premiums and costs are a direct result of already too much government intervention with coverage mandates. Heritage has it exactly right. Of course, running a businesses with 3,000 employees you should already know that.

      Large self-funded insurance programs do not have to comply with the state and federal mandates for coverage, which is why they can operate at less cost than the 20 employee business. You self-insuring under an ERISA plan will enable me to make "real" decisions about what will and will not be covered. Thus we don't have to offer for payment expensive and frankly wasteful coverage.

      If the governement got out of the way and allowed us to do healthcare the same way we do property insurance, we would be able to buy only the coverage that we need and desire. We would not have to pay for treatments or medications that we don't want to cover. Don't say you run companies with vast amounts of employees and then prove with your words that you were not capable of understanding the basics of one of the businesses largest expenses.

    18. Roy Reed, Las Vegas says:

      It's so UNFAIR ……….GOVERNMENT IS RUINING United States.

    19. Tim AZ says:

      Wal-Mart didn't create this legislation to mandate employer insurance coverage. Put the blame where it lies. The author of the bill and those who cosigned it. And those who will vote for it. Grow up and quit blaming everyone else for your short falls and lack of drive. Consider yourself lucky to have been born in a country where everyone has the opportunity to achieve as much as they desire. Or we can be equally miserable through socialism.

    20. Tim AZ says:

      Yet another hit piece on Wal-Mart using the tired old liberal strategy of class warfare. Pit the consumer against the corporation and then delicately suggest the consumer shop at another Corporation owned by the French. If you want to cry about health care mandates on employers then do so. Don't try to use employer health care mandates as a tool to feed ones own irrational hatred toward an American corporation. Wal-Mart not only provides jobs to over a million people. They also provide a better standard of living to lower income people. Are the Heritage Foundations principals in decline?

    21. Pacoofamerica, Michi says:

      This particular disparity just shows how ignorant our legislators really are. They have under 25 year old staff write legislation that they have no understanding of, and then their bosses (Congress)never even read the bill.

      It comes down to – Ready, Shoot, Aim!

      Paco

    22. iceman6060, Arizona says:

      Heritage Foundation just went down low on my list having published this story and the comments of people who agree with it. Conservatives, I don't think so.

    23. Kerri Toloczko says:

      Dead on guys. When asked this question yesterday on CBS, I only had half the answer – that they already cover their people and I expressed my befuddlement at this move. You are right on the money, and this is really helpful.

    24. Al, Arkansas says:

      E-mail Walmart and tell them what you think, let them know that it is Us (their customers) that keep them solvent and profitable, and that no company is immune to failure.

    25. Barb mn says:

      SHORT FALLS AND LACK OF DRIVE?

      Why did it take GOVERNMENT MANDATE for Wal-Mart to provide health care to their employees?

      As much as I loved WAL-MART, I will do without!

    26. John Clancy, MI says:

      The officials in Wash. need to listen to centers that have done careful studies in health care over the years, Heritage Foundation, Heartland Institute, etc. Answers, not perfect, to the problems of the greatest health care system in the world are ready. The MAIN problem is the present admin. It is myopically moving to gain more power over our lives through a single-payer approach which would result in rationing, higher costs, poorer care, as in countries where the government intrudes.

      We need to put patients first. We need to build a health system that puts the consumer first. This will happen if we have real debate, not "phony," staged, townhall infomercials. Let's not destroy health care that is the envy of the world by letting politicians push for power.

    27. Spiritof76 says:

      I felt like I had to respond to John of CT. Bill Lynch of CT. hit the nail on the head.

      The problem with the health care is it is a third-party payer system. Either the insurance companies supported by private employers or government pays for medical care of people.

      John asks for an alternative plan. You get rid of the insurance other than for catastrophic illness, much like homeowner's insurance for fire and flood. For all the rest, the consumer pays direct-get the government out of the way. The employer who now pays for the insurance should channel that pay into an employee health account from which the employee pays directly. Employer or the employee does not fill our endless papare work. We have got to commoditize helth care. Mr. Bill Lynch is exactly correct. The health care has to have the same model as a grocery store. In additon, get rid of the tril lawyers and make the loser pay. You will immediatley see renaissance in health care. Market will match the demand and the consumer will exercise prudence in seeking medical care since they have to pay out of pocket.

      I am a libertarian and support free choice. I firmly believe free people will solve their problems, no matter what they are-not the damn government or big business.

    28. Indiana Citizen says:

      This company requires all of it full time employees to select a health plan.In early fall WM has something called open enrollment in which all employees are required to pick a plan.They have improved the selection for the associates based on hom many they have in their family and so on and so forth.Rush talked about how Safeway has set a good course on health insurance in their company

    29. Pixie, OR says:

      My daughter worked fulltime for WalMart in Virginia Beach, Va for five years. She had generous health insurance, profit sharing, and worked overtime (which she got paid for). Each employee has a stake in the store. If the store see a profit over the year before, they receive a bonus – she received a check for $400 AFTER she had moved to another state and worked for a different company. WalMart is a good employer.

      Everyone bad mouths WalMart for putting mom and pop stores out of business. This has happened forever. I remember going with my mother to the butcher, the produce store, and then the grocery store. Then "super"markets were introduced that had all these things and more under one roof and put the butcher and produce man out of business.

      WalMart works hard to keep their prices low by having the latest technology and products. I have been shopping at WalMart for over 25 years (I haven't always lived in OR!) and will continue to do so.

    30. Lew Richards , Palm says:

      Walmart is NOT the Problem!! America has several HUGE problems that apply to EVERY IMPORTANT ISSUE:

      1-A Greedy and Crooked political agenda that are supported by our current President and his followers- regardless of party.

      2- Greedy and uneducated voters selling their votes to these political robots in hopes of getting SOMETHING for NOTHING .

      3- The acceptance of govertment actions causing our FREEDOMS being destroyed by a President who hates Capitallism and our U.S. Constitution.

      4- We must admit our HUGE MISTAKE on 11-4-2008 and correct this election of people who do not believe in AMERICA . Our CONSTITUTION outlines the proper way to cleanse our government by riding it of these "haters" of America. They reside in both major National Parties . Six months is too long to allow these forces of evil to spread their prorams like a deadly virus across our land. Expect NO HELP from our National Media , it will need to be a ground level action within our laws but effective if WE THE PEOPLE will Speak Out!!

    31. Normca says:

      Wal Mart has always done what it takes to fight their completion. And they are successful with it. They have hired the Mom & Pop employees after they were squeezed out of business. And that is capitalism at its best. I will continue to shop there. However as I get older and thinking of working part time, I would not want to work at Wal Mart. They know that the so called government option will be the only option and it is not good for anyone including Wal Mart employees. By the way, the employees are happy there as I ask every time I shop there [in a round about way]. Right now I pay over $700 each month for health insurance and while this is not pleasant, I can select my own doctors, have tests done and have had surgery when I needed it. The health insurance issue needs to be fought with everything we have as it is the final door way to government control of all of our lives. Lets not cloud the issue.

    32. Tim AZ says:

      You people can't have it both ways. You piss and moan when government takes over businesses like GM. And then turn around support government mandating that Wal-Mart provide health insurance. Explain the difference to us all. You and many others have been played like a fine instrument. You people are so easily cued to spew bile when a liberal uses the tired old strategy of dividing the classes you don't even require thought. I'm going to tell you all something. No one deserves anything but you certainly can earn things. No one born on this planet is entitled to anything from their fellow human beings. In all the history of planet earth fairness has never been a workable theory. The idea of fair is a tool devised by the left that allows individuals or groups to justify taking something from someone else instead of acquiring their own preconcieved needs through a moral and socially acceptable means known as self achievement. Don't allow the left to control you through responses to emotional triggers. Take the time and use reason to back your emotional responses to the left.

    33. Tim AZ says:

      Why did the government mandate that Wal-Mart provide health insurance to its employees. There are at least two reasons. One reason being that liberals dearly despise Wal-Mart because it is an example of the opportunities available to everyone born in the free society known as Amerca. They thought that forcing Wal-Mart to provide health insurance to their employees would be the death blow they needed to destroy this shining example of capitalism. Another reason would be that people have learned that a vote can give them access to their neighbors bank account with the least amount of effort. Allowing them to avoid serving a prison sentence.

    34. Barb -mn says:

      Target didn't need GOVERNMENT to DICTATE health benefits to their employees.

    35. Al, The Villages, Fl says:

      John, Greenwich may be right but I noticed in a video clip on Fox news several weeks ago that a CEO seemed eager to throw off the burden of health care to the government (or anyone else who cares to take it). All I have to say is you better be careful what you ask for. It still has to be paid for and guess who they will target?

      He is correct that a lot of discussion and cost figures are being batted about without any definition of what "it" is. Let's take steps to make insurance portable, available across state lines and let's do tort reform so that doctors do not need to prescribe CYA extra tests. We don't need (or want) a government run health care system.

    36. Carolyn Burneston says:

      I would love to be able to print your articles, which I read to my 94 year old grandfather who is blind, without all the comments. Can you make that an option?

    37. Scott-Green Bay says:

      Some moron at the top of this thread said he has run a business with over 3000 employees, and said the Republicans offer no alternative. this whole health care crisis was created by the insurance companies and the federal government. I have a solution, how about No insurance. You pay your bills yourself. Has anybody every thought that doctor and hospital costs would come down, doctor's and hospitals would have to compete for your business? The Insurance companies have to make a profit, they are ussually pretty hefty. Could you imgaine how much money you would save?

    38. Tim AZ says:

      If you want to spend your money at Target no one will stop you. But know this Target is owned by the french. If you want entitelments then move yourself to France that's where your money will be going. You are entitled to nothing you do not earn in a free society. If you want more go out and earn it. Don't use a politician to steal what you have not earned from the rest of us. I don't have health insurance. I simply understand that one day some how I will leave this body behind.

    39. Ross, Bradenton, Flo says:

      Up until the mid-90's, WalMart's theme presented to the American people was, "Buy American". This was to support the American manufactures and businesses. After the founder, Sam Walton died and none of his kids expressed no desire to take over the business, the theme turned to "By America". Everything in the mechantile side seems to be made in China. Maybe they need to put up signs to read "Buy Chinese".

      In the south, there is something a husband will never do, that is to stand between his wife and a WalMart store. I watched WalMart destroy almost all of the small "Mom and Pop" mechantile businesses in my hometown. They would drop prices so low, that the "Mom and Pop's" couldn't compete. Then once the majority were out of business, the prices went up. Huntsville, Alabama was only 20 miles away and it became more cost-effective for us to drive to Huntsville where WalMart prices were significantly lower because there were stronger competition.

      So when WalMart endorses any legislation sponsored by a Democrat congress bent on making our country another European-style socialist government, you can rest assured that WalMart wins and their competition and ultimately their customers lose.

    40. Lynn B. DeSpain says:

      Actually Walmart only takes advatage of Laws that exist or Laws that they can help create. This has been done in this Nation from the beginning. Most of our early billionaires never broke any laws, but there were a lot of laws created because of them!

      Most every employer wants to provide benefits to attract good employees and to keep them. The reason that it is hard to do so is the costs. The costs are high do to litigations.

      Federal Congress has never addressed this cause, mainly because they themselves are lawyers, those who profit most from these litigations.

      Caps on Medical suits are desperately needed in this Nation, from the family practitioner who pays 50% of their income to malpracice insurance, to the hospitals , to the phamicutcal companies, et al. Litigation is a large cost of most every item sold in America. Half the cost of the step ladder that you use in your own home is liability insurance, because someone, somewhere will sue, and some jury will award an astronomical amount of money, and for what? The same injury you could get falling off a rock while camping with your family?

      No one forces you to see a Doctor. No one forces you to take medicine. No one forces anyone to have an operation. Why? because there are always risks, and we have to learn to accept personal responsibility for taking these risks.

      We need people in Washington DC who see beyond the profit, and can see the savings to all of the citizens in our Nation.

      Hozro

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