Print Columns   |   Web Chats   |   Blog Archives   |  

Wal-Mart = Law-Tram

By the end of this week, Maryland legislators will decide whether to force Wal-Mart to spend far more on health benefits for its workers.

But what's really being decided in Annapolis is whether to let Marylanders keep on lovin' Wal-Mart and its low prices, or to force state residents to see a connection between those low prices and the increasingly difficult lives led by Wal-Mart employees and the many other Americans whose jobs went bye-bye because of Wal-Mart's purchasing practices.

The social issue culture wars of the 1980s and 90s have quieted down and, but for gay marriage and evolution, pretty much gone away. What's now replacing them is the battle over America's biggest store, Wal-Mart.

So far, the big winner: the lawyers. After all, Wal-Mart spelled backwards is Law-Tram.

Reeling from a series of lawsuits stemming from its treatment of employees, the store's executives are eager to shut down the second front in the war against Wal-Mart--the state legislatures. Maryland's lawmakers last spring passed a bill that would require the largest employers in the state to meet certain thresholds in spending on health care for their workers. The way the bill was written, it applies only to Wal-Mart.

The argument for the bill is simple: By stinting on its healthcare spending, Wal-Mart forces the state to pick up the medical bills for those workers and their families. The state doesn't want to pay those bill; it wants employers to do right by their workers. Just under half of Wal-Mart employees are covered by employer-provided health insurance; other big employers average about 68 percent. A Wal-Mart confidential internal memo concluded that 46 percent of its workers' children are either uninsured or on Medicaid.

But Wal-Mart is fighting back, threatening to scratch plans to build a big distribution center on the Eastern Shore, hiring nine lobbyists (including the wife of a legislator) to work the Annapolis crowd, holding a $1,000-a-plate fundraiser for Gov. Bob Ehrlich, and mounting a PR campaign that's chockablock with near-truths. Example: A statement on walmartfacts.com, the company's propaganda outlet, says that "More than three-quarters of our associates have health insurance." But hold on, check out the rest of the sentence: "...whether through a company plan, a spouse's plan, or Medicare." So Wal-Mart apparently draws no distinction between health insurance it helps to pay for and insurance that workers go out and acquire on their own.

Wal-Mart's chief executive, Lee Scott, has conceded that the results of the political and cultural battle over his company will tell us a great deal about the direction of the country: "The question of how to assure that American capitalism creates a decent society is one that will engage all of us in the era ahead," he said earlier this year.

And we're now swimming in a veritable ocean of anti-Wal-Mart information and argument. To dive into that world of new books and movies and web sites, you'd think the nation was torn apart by the store's methods and effects. "We haven't equipped ourselves to manage" Wal-Mart, concludes Charles Fishman, author of a new book, "The Wal-Mart Effect." "That is the reason for our ambivalence, our appreciation and aversion, our awe and our nervousness, our confusion."

Fishman and other critics of the company see the behemoth as a force every bit as dominating and transforming as the car or the suburb. Wal-Mart, they say, requires us to think about whether we value cheap goods more than good jobs, to choose between buying everything in one place and retaining the Main Streets of small-town American mythology. Wal-Mart, they say, means having to decide which is more important: Letting one company reshape the national economy or asking government to make the rules about what our communities look like.

All of which makes sense if you're deep into the anti-Wal-Mart mindset. But that's not where most Americans are, not by a longshot.

A new study from the Pew Research Center shows that large majorities of Americans like Wal-Mart just fine. Not only do they love the low prices (81 percent say WM is a good place to shop), but they believe the store is "good for your area" (68 percent), "good for the country" (64 percent) and "good as a place to work" (56 percent.)

The anti-Wal-Mart political campaign is largely a product of union activists, yet Pew found equally strong supprt for Wal-Mart in union and non-union households.

Suprisingly, there's not even much of a culture gap on Wal-Mart. Seventy-six percent of families making more than $75,000 like WM as a place to shop, while 87 percent of families in the $30,000 and below income bracket feel that way.

And check this out: Even the dreaded seculars agree with God-fearing Americans that Wal-Mart is good for the country-- 58 percent of seculars and 73 percent of evangelical Protestants agree with that statement.
Given all that, will Maryland legislators vote to override Ehrlich's veto of the Wal-Mart health benefits bill? Should they?

In Maryland, Wal-Mart does not yet play quite the same role that it does in much of the country. There are cities in Texas where Wal-Mart owns nearly a third of the grocery business. In Virginia, Wal-Mart is already the state's largest private employer, as it is in nearly half the states. Yet there is no Wal-Mart in the District and only one in Montgomery County; none in New York City, either.

So in a way, Annapolis legislators are freer to take a stand against Wal-Mart than their counterparts might be in, say, Virginia.

But the obvious conclusion to all of the survey data is that even if Americans know that Wal-Mart wiped out their town's Main Street and shipped the manufacturing jobs to China and is stingy with its workers, man, the clothing in that place is cheap.

All anti-Wal-Mart anger aside, the fact is that the legislature has no business telling an individual company to spend more on its workers' health plans. This is a bill directed at a single company, and as such, it is both unfair and overbearing.

But it's perfectly right to pressure Wal-Mart to do right by its workers, and whether it's the unions or small business owners or ordinary citizens who take up that cause, it's a battle worth fighting.

And the good news is that time and the laws of economics have joined the anti-Wal-Mart campaign: In a new book, "Bigger Isn't Always Better," Washington business writer Bob Tomasko concludes that growth is "what Wal-Mart used to do." "Companies that successfully seek bigness soon find that their surroundings become less hospitable."

Tomasko compares Wal-Mart's current plight--it has pretty well tapped out the country's suburbs and is now venturing into big cities, where real estate is much more expensive and the store's low prices may no longer work as the sole identity of the store--to the old A&P Supermarkets, once the largest network of stores on the planet. A&P fell off the mountaintop because "market dominators like A&P are inherently poor adapters," Tomasko writes.
Their very size makes it difficult for them to sustain their business model. Wal-Mart's voracious appetite for raw materials, cheap labor and low-priced goods is already running into the fact of increasing pay scales in China and other Soon, Tomasko says, "no one will be available to make the things Wal-Mart sells."

Legislators can choose to pile on, doing the right thing for Wal-Mart workers while diminishing their own credibility by using the law as a weapon against a single business, however huge it may be. Or the folks in Annapolis could choose to sit back and wait for economic forces to take their course.

Natural forces are slower, of course, and in the meantime, many Maryland families struggle to get even basic health care. But a legislative solution lies in setting rules for all to follow, not in cleverly crafting a bill so that it hits but one entity.

By Marc Fisher |  January 12, 2006; 6:59 AM ET
Previous: A Day at the Races | Next: You Be the Auditor

Comments

Please email us to report offensive comments.



Very nice item, Marc. Too bad it's impossible to read (at least in my Firefox Browser) because all punctuation except the periods look like you're trying to copyright every other word (or keep making new paragraphs).

Can't an institution like the Washington Post afford a better html editor? Low blow maybe, but you certainly wouldn't publish something in the print version that looked like this. Just looking for some consistency.

Posted by: Apostrophes Rock! | January 12, 2006 7:47 AM

Many thanks for alerting me to that. We have new (and, I might add, pricey) blogging software that refuses to recognize punctuation from any other software, so it's a long, slow process of changing every single apostrophe and dash. I think I've now done that--thanks for slogging through it in the jumbled version. Should be dotted with real punctuation now.

Posted by: Fisher | January 12, 2006 8:09 AM

It's a double edged sword. Companies want the State to stay out of its business and not impose heavy regulation, but they also want to the State to give out incentives so that companies can set up shop. You can't have both. If Wal-Mart wants to stop government from regulating its business, then they need to stop accepting government kickbacks.

Posted by: Shalaya | January 12, 2006 9:21 AM

Spare me, Marc. You miss the point. Wal-Mart in effect utilizes Medicare and Food Stamps as part of its compensation package. In fact, they trained their HR people on how to apply for both. So their "low, low prices" are to a great extent subsidized by the Govt. (aka, all of us whether we shop there or not).

So we have two choices. The Republican preference would be to say "ha, ha...see, big govt. can be gamed...get rid of Food Stamps and Medicare". The rest of us in reality believe that the law should be adjusted so parasites like Wal-Mart can't use poverty progrems, intended for helping the poorest among us as their corporate health care plan and low wage subsidy.

The MD legislature is exactly right on this.

Posted by: John Nowicki | January 12, 2006 9:29 AM

I'm glad you have a grasp some of the economics involved, because most people don't. If Maryland forces Wal-Mart to provide its workers with a certain level of health care (which, as you point out, is unfair because it applies to Wal-Mart alone), they will be faced with higher prices at Wal-Mart, or perhaps Wal-Mart will just say "forget it" and not open a store at all (meaning higher prices at competing stores). A health care mandate would also decrease the number of Marylanders hired by Wal-Mart And whom do higher prices and lower hiring hurt the most? That's right, it's the poor, who are the ones the legislature is trying to "protect" in the first place.

Posted by: William | January 12, 2006 9:38 AM

Well let's just abolish all corporate responsibilities for Wal-Mart! They shouldn't have to pay FICA, worker compensation, local taxes, unemployment insurance or any other expense for their lowly paid minions. After all, low prices and high profits are the only thing that matter! Get real Marc. Corporations hav a duty to pay their fare share in society just like you and I do when we pay our taxes. Offering health insurance is the least Wal-Mart can do for its low paid employees. Go Maryland!

Posted by: Vaughn | January 12, 2006 9:41 AM

Willam,

That's exactly the point. Wal-Mart is not the Govt. And it does not have the right to use taxpayer funded programs to subsidize your low, low, prices. You want low, low prices...pay up the costs yourself.

Nor is it "unfair". We have numerous rules and regulations which exempt small businesses in order for those small businesses to grow, and because in many cases the rules don't make sense for small operations.

Posted by: John Nowicki | January 12, 2006 10:05 AM

Is it just so terrible that Walmart should insure its employees at its own expense. Wasn't Sam Walton well known for his civic sense of responsibility? Don't the shareholders have a sense of responsibility to their own employees? Of course they should insure the employees at their own expense.
Intentionally dumping Walmart employees' health care onto the State is tantamont to theft of service.

Posted by: ccm989 | January 12, 2006 10:14 AM

Don't liberals want everyone to take part in government provided health plans? It seems WalMart's ahead of the curve here. Perhaps they should be applauded.

Posted by: Jacknut | January 12, 2006 10:15 AM

In this Republican controlled national government we've embraced the concept of employer based health coverage for our citizens. However, it doesn't work if the employees can't afford what the employer decides to offer. Seems to me you can't have it both ways. If health coverage for our citizens is going to be employer based it has to be affordable based on the wages the employer is paying. If not, its not really and option, its a ruse. I support the MD. Dems on this one. If you pay next to nothing on wages, the employer is going to have to substantially subsidize the health coverage. Pay executives a little less.
(Perhaps Hillary was right?)

Posted by: s | January 12, 2006 10:28 AM

Jacknut: That's the point. Medicare isn't a "government provided health plan" for everybody, it's for people over age 65; Medicaid is for poor people. A true "government provided health plan" would be for everybody. The question should be: Should WalMart be able to take advantage of government-funded medical programs in a manner that is outside of their mandate?

To be fair to WalMart, let's consider the employers that it has supplanted. These were largely very small employers that probably didn't provide health benefits to their employees either. It may be that WM is simply a big target.

Posted by: CT | January 12, 2006 10:29 AM

my late father, an ex-marine, said during the 1960s when medicare was being opposed by the republicans as an interference in the free marketplace, "i just want everybody to have the same government-provided health care all their lives that dwight d. eisenhower had during his. that's not socialism. that's economic justice." we pass laws all the time that only affect one company. especially tax favor laws. no different in principle than passing a law to bring wal-mart "up to code" as it were on its employee benefits. we are still trying to prevent corporations from offloading their environmental depredations onto the public to pay for. it certainly makes sense to stop wal-mart from offloading its social responsibilities twoard its own profit-generating workforce onto the public. i hope the md legislature makes erlich veto this again. his $100,000 wal-mart-supported fundraiser will look real impartial then.

Posted by: slangist | January 12, 2006 10:29 AM

"wal-mart" backwards is "tram-law"

Posted by: backspeller | January 12, 2006 10:33 AM

The national minimum wage is $5.15 per hour. According to the Washington Post, "The average wage for full-time sales associates in Maryland is $9.97 an hour". I would say Walmart is trying to do right by it's employees. It is a sad fact that someone in this country who makes nearly double minimum wage cannot afford employer subsidized health insurance.

Forcing Walmart to spend more on health insurance means they are going to cut costs elsewhere. Those costs will likely be hourly worker pay. Another affect is likely to be lesser coverage or higher costs for those that can currently afford coverage, possibly making it to expensive. This action in Maryland will come back to hurt Walmart employees.

Posted by: Troy | January 12, 2006 11:01 AM

I can remember a time when Wal-Mart was a leader in helping working-class Americans. Does anyone else remember their campaign "Buy American, and Americans work"? When Sam Walton died, they threw all their sense of civic responsibility out the window and started sucking up every dime that wasn't nailed down. Gainfully employed people shouldn't have to rely on government aid programs; that's the whole point of having a job, right? Maryland has the right idea. Working for Wal-Mart is nowhere NEAR as nice as they say; the hours are long, the pay is low, and the benefits are dreadful. My aunt worked there for years before becoming a substitute teacher. The hours weren't as regular, but the pay and benefits were MUCH better. Market forces alone will not force Wal-Mart to take care of its employees. This could be the jolt they need to rethink their strategy. Mr. Walton was a good man; they'd do well to remember where they came from.

Posted by: bamagirlinVA | January 12, 2006 11:09 AM

great column today, you pointed out some interesting economic facts. I hope the Md legislature does not over-ride the veto just because I think its a bad thing to legislate for or against a company in that way. On the other hand I think WalMart should be punished for leading the race to the bottom.

Posted by: Chet | January 12, 2006 11:17 AM

No matter how you spell Walmart, this bill should not be passed. The low prices that Walmart offers helps the poor far more than the obligation for Walmart to cover more of their employees with health insurance. Walmart is going to get around this if it passes. They will probably lay off just enough workers to get under the 10,000 employee limit or move out of the state entirely. Then who will get the blame?

Posted by: Mike | January 12, 2006 11:27 AM

Giving employees health care and keeping prices low isn't impossible - look at Costco for an example. ALL employees, even part-time, get health insurance. Last time I checked, they were still managing to make plenty of money. Are they making as much as Wal-Mart? No. But they're not trying to - they have a set profit they want to make in a year, and anything above that goes to charity or the employees.

Personally, I think Wal-Mart should have to cover their employees' health insurance, but if the bill fails, I will continue doing what I have done for the past year: vote with my wallet. I refuse to shop at Wal-Mart - I'm willing to pay the higher price at Target because I can't bring myself to support WM's business practices. Of course, for every person like me, there's 20 others who just see the low prices and nothing else.

Posted by: AG | January 12, 2006 11:35 AM

Marc, I don't like your "invisible hand" prescription. But I appreciate your interest an accurate statement of the sins of Wal-Mart to invite you to my home, Provincetown Mass.

With the nearest Wal-Mart one hour away (in Hyannis), we are one of the most Wal-Mart remote communities in the nation, and entirely by design. You have to drive 40 minutes to get to a big fast-food chain (Wendy's) or a big-box store (Staples). Boy does it feel good.

Yes, we are a seasonal tourist town with our own labor bugaboos. But why not come up and see what life is like in a small town where a tiny SUBWAY shop, three convenience stores and a Grand Union (formerly an A&P) are the only hints of chain sprawl -- and an old-fashioned Main Street thrives!

Posted by: Fred Biddle | January 12, 2006 11:57 AM

Isn't Wal-Mart just a convenient target of anger for the bigger issue, which is the uncontrollable rising cost of health care with nothing to show for it? The Maryland law may put a band aid on something that needs serious triage. Isn't this obvious?

Posted by: Isabelle | January 12, 2006 11:58 AM

A lot of places are starting to look at Wal-Mart's practices. They looked into trying to move into the original Filene's location in Boston, but the city would only let them if they allowed their workers to unionize. Wal-Mart left, and now it is going to be a 7-story Target.

The NY Times did an articles a few months ago, talking about the differences between Costco's treatment of employees and Sam's Club's.

Posted by: Aaron | January 12, 2006 12:10 PM

Has anyone really done a top-to-bottom economic analysis of the "typical" associate?

For example, if someone is unemployed or on welfare, then they (in general) would be 100% subsidized and receive all income from the gov't.

BUT, if they are employed by Wal-Mart (and without medical insurance) then the gov't would be only subsidizing medical (and I'm totally guessing) for 25% of living expenses. That leaves 75% of expenses paid by Wal-Mart, which no longer need to be paid by the gov't.

So, in reality, Wal-Mart is subsidizing the gov't, and not the other way around.

BUT, Wal-Mart should NOT be allowed to have a pattern that purposely keeps down wages. But I think that there are enough employees, etc. and other market forces that should be able to determine what a fair wage is.

Posted by: Hugh | January 12, 2006 12:10 PM

Shopping WalMart only sustains the Chinese economy and substandard minimum wage US jobs. If people would shop locally and pay slightly more for goods that will last, instead of cheap plastic garbage destined for the landfill, we'd be in better shape.

Posted by: trampus | January 12, 2006 12:27 PM

The real question in my mind is how good was the health insurance coverage provided by all of the mom-and-pop businesses that Wal-Mart supposedly replaced? I bet is was for the most part worse or non-existent. So, when a Wal-Mart moves in and forces out all of these small businesses I bet that the overall health insurance coverage situation in the area would improve.

Posted by: Al | January 12, 2006 12:42 PM

I am a retired vice president of a national union...In oregon the wage is now 7.50/hr so walmart has to pay this an all other stores also..the only thing that will change COSTS is a national health insurance for all the people..whether the business like it or not. I shop at WALMART all the time an in the supers mostly... even with a federal pension it allows me to enjoy life better...

Posted by: andy | January 12, 2006 12:54 PM

None of you get it! If you don't like the wages paid and the benifits provided ----move on! Find a job, that suits your linving standards requirements. But, don't look for Wal-mart to hold your hand! That's why we have, "have and have nots" Those that get ahead, work to meet their needs, and spen within their incomes. Wal-mart owes them nothing, but a job, and the benifits they provide----you agreed to work there. You knew the wages and the benifits of your employment, when you hired on at Wal-mart.

Must be an eastern dogma---or union activism, always trying to get something for doing nothing??

Posted by: Lefty | January 12, 2006 1:10 PM

Aaargh! I'm so tired of reading how WalMart destroyed Main Street USA. Downtowns have been in decline for 50 years. Businesses have been moving to the outskirts for years. Why haven't the other mega chains (Target, Kmart, Home Depot, Borders, Barnes and Noble, Best Buy, Circuit City, etc) been blamed for putting Mom and Pop out of business. They're located in the same shopping centers out by the highway that Walmart is. In two cities that I am familiar with (Winchester and Blacksburg/Christiansburg, Va) the shiny new mall with retailers like JC Penney and Sears went up on the outskirts of town long before WalMart arrived.

Posted by: Dan | January 12, 2006 1:30 PM

I think the force behind the hate Wallmart groups is the Unions, Union Pay is Higher than what wallmart pays putting union shops at a disadvantage. However dou agree that the extra pay union members receive goes right out again as Dues? Now they dont have the extra money they paid in dues and they have lost the low grocery prices they would have had at Wallmart.

Posted by: Howard | January 12, 2006 1:32 PM

Most would do well to study the Forbes annual listing of the wealthiest on the planet. Four out of the top 10 richest billionaires have the last name Walton! How much is enough? They have a responsibility to our Country and more importantly to their employees. There model has worked well for them but at what cost to the rest of us. Give me a break!. We have a healthcare model that is broken. We as a nation better wake up.

Posted by: David | January 12, 2006 1:37 PM

For the record, I hate Wal-Mart, and I'm not too fond of unions either. So there goes that argument.

As for Mr. Lefty:

Until 4 months ago, I was unemployed. For 3 years. I was barely able to afford to live on a 2 year student loan while I got a graduate degree, and that was only because I didn't have to pay for rent. I made MORE per month than a WalMart employee, and I had just enough to pay for utilities and food.

Have you looked at housing recently? How can someone who works at WalMart afford an apartment? And food? How are they supposed to "suit your living standards requirements" when they don't make enough to afford a one bedroom roach filled apartment! If the job market is that bad, people aren't working at WalMart because they want to. They work there because they have no other choice. I don't think it's too much to ask that WalMart take a small percentage of their profit and give them a livable wage and health insurance. It's not impossible.

Posted by: AG | January 12, 2006 2:05 PM

If Wal-Mart must spend 8% of it's profit on Health care for its employees, why not ALL companies?

An article I read stated that 5% of Wal-Mart employees are on public health care programs. The average S&P company? 4%. Big whoop. I'm surprised they do THAT well with their rock bottom pay.

Is America incapable of manufacturing "cheap plastic crap" like China? Or is it that American goods are no better and cost substantially more? Why do PEOPLE still build stuff in the US? China SHOULD, there's 4 times more of them. Americans should be fixing teh machines that will work 3 times as long as Chinese artisans without benefits. Why aren't we doing this? Startup costs? Let's get some R&D grants out there!

If EVERYONE used public health, would companies stop finding reasons to lay off 55 year olds who are well worth the money but KILL their insurance costs?

Has any country with public medicine ever "realized their mistake" and gone back? Is private medicine the best in the world if you don't get treated unless you make quadruple the minimum wage? Or is it only the best there is for the upper crust?

I have a great job and rather good insurance, but I don't kid myself that teh Wal-Mart bill is a serious effort towards looking after my less fortunate neighbors.

Posted by: jacobs2006.com | January 12, 2006 2:07 PM

Man, that survey just shows how P.T. Barnum and H.L. Mencken were right about the American public. Wal-Mart is a good place to shop? Yeah, if you like, well, crap stores with crap goods that ain't worth the low prices because they're pieces of junk.

But that's so typical of the American public these days. They chow down at the Mega-Chain restaurant, eating boatloads of crappy food, and call it good food. Then they buy super large mumus at Wal-Mart because they're lard butts and call it fashionable.

Green Day had it right. I don't want to be an American Idiot. There are already too many of 'em.

And I'm not letting H.L. Mencken's or P.T. Barnum's comments apply to me.

Posted by: Tony | January 12, 2006 2:12 PM

I find it interesting that we keep referring to this as a Wal-Mart only bill. The three other large employers in the state are already allocating 8% of revenue to healthcare.I believe the scariest thing is the "cheapening" of our national work force. As WM continues to grow wages will,on average,shrink.The only rising living standard will be for executives and shareholders.I am self-employed in small-town America. I have a 75 mile trip,either to the north or south, to the nearest WM. If I make that trip to the city I still do not shop at WM, I do business with small shops to better share my meager wealth.

Posted by: Greg | January 12, 2006 2:22 PM

Lefty,

My God, I've seen the light! Now I see that Paris Hilton earned every last dollar of that inheritance!

Posted by: John Nowicki | January 12, 2006 2:32 PM

In many of the small towns where Wal-Mart operates, like Staunton, VA, Wal-Mart is by far the biggest source of employment in what might otherwise be a city with a stagnant economy. Unskilled workers who couldn't afford to get a college degree and who are unwilling or unable to commute up to an hour to the nearby larger cities of Charlottesville or Harrisonburg have few other local opportunities besides fast food. Wal-Mart knows this, and they offer the lowest wages and benefits that they can get away with.

My cousin in Staunton tried working at the Wal-Mart there for a few weeks and said it was the worst experience of his life. "Associates" in their 20s and 30s were already suffering from work-related disabilities because of the demanding physical workload. And now the company is considering pre-employment physical fitness testing to ensure that older people can't get hired in the first place. This is all fact, not rumors.

Wal-Mart claims that their low prices benefit low-income families. Well, somehow low-income families managed to get along fine in all the years before Wal-Mart existed, and I suspect they could do so again. Stores like Dollar General and A&N offer prices as low as, if not lower than Wal-Mart, and they do so without tearing apart the fabric of the local community and expoiting their workers.

Wal-Mart is setting itself up for a fall. Look at the history of General Motors. In the 1950s, GM was the largest corporation in the world, with at least a 50% market share in the United States. Today, they're flirting with bankruptcy. Beware.

Posted by: Scott | January 12, 2006 2:48 PM

Since single people, regardless of income or assetts, are excluded from Medicaide, but not Medicare ... there is no subsidy of government at any level.
WalMart (post Sam Walton management) is doing what every reactionary politician is dreaming. Shifting costs of enterprise onto the government as it reduces the revenues governments (all levels) collect from entitled classes of citizens and increases the revenues collected from the targeted classes of citizens & residents. This is in their collective (minds?) a reversal of the rash reapportionment of revenue & wealth resulting from the New Deal.
Wake up! Once WalMart has succeeded and they begin spawning second generation WalMart management style execs the trouble will spread like the plague going through London.

Posted by: NoTrump King | January 12, 2006 2:57 PM

Scott,
Strange comparison that you make with GM. "GM was the largest corporation in the world". They are going bankrupt because they are being siphoned from the expense of employee benefits.

Posted by: dt | January 12, 2006 3:26 PM

DT--Employee pensions and retiree benefits are certainly a major factor in GM's current problems. But GM first started losing market share and profits in the early 1970s, when they failed to anticipate the Arab oil embargo (in fairness, who could have?) and they had few cars available that got decent gas mileage. All they offered were rustbuckets like the exploding Pinto and the dreadful Vega, which drove people into Honda and Toyota showrooms in unprecedented numbers. At that point, GM still had enough active workers to support their retirees, so the initial decline that continues today can't be blamed entirely on benefits.

By being so stingy with its employee benefit programs and forcing employees to rely on government assistance, Wal-Mart is contributing to the national deficit and is helping to increase the costs of health care for all Americans, who have to subsidize all the free or reduced-cost care that many Wal-Mart employees are forced to rely upon. So yes, maybe we can buy a pair of socks for less at Wal-Mart, but the next time your employee contribution to your employer's medical insurance premiums goes up, think about who you have to blame for it.

Posted by: Scott | January 12, 2006 3:40 PM

Correction: yes, I realize that the Pinto was a Ford, not a GM product. Same principle though.

Posted by: Scott | January 12, 2006 3:42 PM

The part that's wrong in the bill is that it only targets Wal-Mart. They should set the 8% bar at a lower number of employees, say 1,000, and link it to company profits

Posted by: AL | January 12, 2006 3:53 PM

Just as Walmart has the right to pay low wages and not offer a good benefits package, the Maryland legislature has the right to decide under what conditions businesses can set up shop in their state. If Walmart is as popular as the PEW poll suggests, than voters in Maryland will be rushing to vote those anti-Walmart politicians out of office. But I'm guessing that doesn't happen. :)

Posted by: emb | January 12, 2006 4:03 PM

Mike wrote: Walmart is going to get around this if it passes. They will probably lay off just enough workers to get under the 10,000 employee limit or move out of the state entirely.

Move out of the state entirely? Wouldn't that be cause for celebration? It's not like K-Mart, target or some other goliath low-cost discounter wouldn't fill the void. Maryland is an economic machine, and those taking advantage of Wal-Mart's abandoned market share and profit potential would stand to gain quite a bit. I just don't buy the gloom-and-doom. Wal-Mart just just as soon shut down a small town store anyway to build a megasupereverythingunderoneanticompetitiveroofbehemoth store a few miles down the pike to pick up a handful of extra dollars a day. The abandoned store property then becomes blighted, depressing property values and thus the property taxes that local and state governments are able to pull in anyway. I don't think you're as damned if you as you'd be if you don't.

Posted by: chipfan | January 12, 2006 4:11 PM

Scott,
Excellant historical analysis of the "rise and fall" of GM. My grandfather retired from there after 36 years of service they gave him a gold watch (made in China of course) at his retirement party.
I agree with you GMs problems are not entirely related to employee perks and lifting this burden from them may cause a backlash such as resorting back to retro-design like bringing back the Vega.
GM has made poor business decisions and part of that may have been in the way of unforseened burden from employee benefits.
In high-school I owned a Pinto and after graduation I owned a Vega. Now after several years of either trial and error or maybe just plain maturity I own a Toyota that is 12 years old with 154,000 miles on it and runs like a Deere.
My point here is that Wal-Mart should not be punished by being the key role model in Capitalist structure. They have succeeded were others have failed because they made intelligent business decisions and certainly some of those (such as outsourcing to China)may have been difficult decisions but they were ones that propelled them to the success they are today.
My neighbor works at Wal-Mart because it is the only job that pays decent here in WV. He worked at the stone quarry and made 7.50 an hour and was eligible for health benefits after 90 days of which the quarry paid half the tab that means he shelled out $200 dollars a month on his own. I must confess that I have not done the overall economics but I think he made a wise decision by going to Wal-Mart. He has better pay and likes the job as far as insurance, his wife just had a baby and they paid the medical costs themselves because his income is too high to merit Government assistance.
I really do not agree with everything that Wal-Mart does but I certainly commend them from a business standpoint.

Posted by: dt | January 12, 2006 4:20 PM

How much in profits did Wal-Mart make last year, anyway?

Posted by: tom | January 12, 2006 4:56 PM

AG asks, "Have you looked at housing recently? How can someone who works at WalMart afford an apartment? And food? How are they supposed to "suit your living standards requirements" when they don't make enough to afford a one bedroom roach filled apartment!"

The same way many of us have managed: Get a roommate. Or two roommates. If you have a family, take in a boarder. The concept of "one domicile, one family" is a privilege, not a right.

Not all of Wal-Mart's employees are sole heads of household. Some are teens and twenty-somethings who are supported by Mom and Dad, receive health insurance from another family member, and work to have spending money for movies. Others have spouses who provide them with health insurance through their employer. Should these employees, too, receive the more generous health benefits? If so, why? If not, why shouldn't Wal-Mart simply hire more non heads of household?

No one held a gun to force employees to work at Wal Mart. No one holds a gun to keep them there. It was a constrained choice, but it was a choice. Or do you have a problem with capitalist acts between consenting adults?

Posted by: Paul S | January 12, 2006 5:08 PM

I think the real problem isn't Wal-Mart's size or the quality (or lack thereof) of their products. Its their complete lack of social & corporate responsibility. Target, for example, donates $3 million a week to charity, offers higher wages and benefits than Wal-Mart and still manages to make a bundle. Wal-Mart's execs need to wake up and realize that making money shouldn't be their only corporate strategy.

Posted by: delos | January 12, 2006 5:12 PM

I am familiar with the plan that Wal-mart offers to their employees in Maryland. The employee cost of the insurance is not even worth enrolling. Wal-mart "carves out" so much from the plan that it really is a bare-bones plan.

Additionally, I am from a lower class family - we never had much. But what we did have was a great small town, only one light and several small businesses. Wal-mart threatened to come to our town, and they still might but....I WOULD RATHER SUPPORT LOCAL MANUFACTURERS AND BUSINESS OWNERS THAN CHINA AND THE WALTONS!

Posted by: Greenspring | January 12, 2006 5:53 PM

Have any of you guys noticed that some of the most profitable companies in the world operate in nations with national healthcare? Toyota, Honda, Ikea, Daimler-Chrysler to name a few. Even American owned foreign makes do just fine with national healthcare. Volvo and Jaguar are Ford's most profitable makes, despite having to contribute to their respective nations' national healthcare system. One of these days, American industry will see the light and stop calling commonsense business practice and social priorities "socialism". Until that time, I'm glad Maryland is going to beat them with a stick until they come to their senses.

Posted by: Vaughn | January 12, 2006 6:20 PM

Great debate here, folks. And now this news: Both houses of the Maryland legislature voted this evening to override Gov. Ehrlich's veto of the Wal-Mart bill. So the anti-Wal-Mart lobby will be crowing from coast to coast in the morning and Wal-Mart will likely react to Maryland's new law by canceling plans to build a distribution center on the Eastern Shore. Will the move in Annapolis embolden legislatures in other states to act against Wal-Mart? It might happen in some other states that, like Maryland, are not hugely dependent on the retailer for jobs. But don't expect any such action in the South or in other states where Wal-Mart has enormous market share and job power.

Posted by: Fisher | January 12, 2006 9:48 PM

Memo to BushCo: 'Enough'

You need a blog post on your Marion Barry column.

Where are the calls in the WaPo for someone (oh, I don't know, maybe Congress) to remove BushCo from power?!?!

http://www.grokyourworld.com/

Posted by: John Driscoll | January 12, 2006 9:54 PM

Why should Wal-Mart or any other employer -- including the Wash-Po -- be compelled to finance their employees' health care? The only reason any company provides health bvenefits is because there is a government subsidy, in the form of lower taxes, for the expenses it pays. Where Wal-Mart is not paying its employees' health costs, it is paying higher taxes than, say, Target or the Wash-Po. The real solution would be to get all companies out of the health care business by ending the tax subsidy or by expanding it so that all people could deduct their health expenses from their taxable income.

Posted by: i4abuy | January 13, 2006 5:31 AM

It's a reprehensible and cheap way out for MD legislators to target one company with this bill. When the thing is found to be illegal they'll simply sit on their fat cans and say, "well, we tried." Not good enough.

Likewise it's easy for union leaders to avoid accountability, but the responsibility rests with them. How is it that in one of the most union-friendly states in America, organizers have yet to make a dent in this company?

My dad was part of the GM strike in the late 30s. He got a faceful from a water cannon and a few of his friends wound up with their heads busted open by the police, acting as the Mich. Governor's goon squad. But they prevailed, and GM was forced to become a responsible employer as a result. The same tactics need to be applied at Wal-Mart. If you aint willing to stand up for yourself then quit bitching if you're taken advantage of.

Wal-Mart may be a despicable employer, but it has its uses. Many of the people they hire would not be employable elsewhere. However they do tend to promote from within, so a worker with no skills can obtain them. That worker can then take those skills elsewhere for more money and better benefits. Wal-Mart is a disposable job source, use it and throw it away.

Either that or get serious about unions. The government has already created the environment you need to get what you want.

Posted by: Pat Bergin | January 13, 2006 8:33 AM

Congratulations, Maryland: Your anti-Wal-mart legislation has made the front page of CNN.com--and made my state the laughing stock of the Nation:

http://money.cnn.com/2006/01/12/news/companies/walmart_maryland.reut/index.htm?cnn=yes

Posted by: Paul S | January 13, 2006 9:15 AM

This comment is about a column you wrote several weeks ago about Washington Grove. Very complimentary piece. But did you notice something missing, Marc? Walk the streets, go to the town hall, the lake, the playing fields. Watch the holiday parades. You'll be hard put to find a person of color.

Posted by: Shaman | January 13, 2006 9:24 AM

Actually Mr. Fisher, you have some facts wrong again. This law is not aimed soley at Wal-Mart, It is aimed at all companies that employ more then 10,000 people in the State of Maryland. Of the four companies that are impacted by this law (Giant Food LLC, Johns Hopkins University, Northrup Grumman, and Wal-Mart; only Wal-Mart does not already adhere to the law. This makes them feel targeted by the State. Wal-Mart also states that the unions are behind this and whereas I do believe that the unions are pushing very hard for this, of the four companies, only Giant Food LLC is employed by a majority union workforce. The facts are this, Wal-Mart likes sticking it to its employees and communities, but doesn't like it when they are getting the same treatment they dish out.

Posted by: Karl Helmold, Jr. | January 13, 2006 9:43 AM

This legislation will have 3-4 economic effects.
Reduce some of Walmart's profit, lower the wages of existing Walmart workers, raise the price of current Walmart goods and reduce the number of workers that Walmart hires in MD.

It's a pretty steep surcharge on workers and the cost of hiring new, additional workers just got a lot higher.

Posted by: rea | January 13, 2006 9:56 AM

Pat Bergin:

do you want to know why "one of the most union-friendly states in America, organizers have yet to make a dent in this company?" It is because WM actively discourages unionization to the point of FIRING employees who try to organize. While it is within employees' rights to unionize, WM is smart enough to coincidentally fire those who try to do so for other offenses which are often unproved. Then, in an effort to scare the rest of their employees back into submission, they put out internal press releases detailing the despicable behavior of those who were fired, mentioning only as an aside that these individuals were on the verge of unionizing.
Furthermore, as far as taking their skills learned at WM elsewhere...Good luck trying to get a supervisor to act as a reference.

Posted by: sciencegirl | January 13, 2006 10:37 AM

I say we go South Park on this.

Kill the Wal-Mart.

Posted by: Tony | January 13, 2006 6:52 PM

If you are counting on Wal-Mart to pick up the tab for anything,you better forget it. I wouldn't say I was even an employee, just a slave. The working conditions are bad, pay and benefits almost non-existent. Respect? Zero. The sad thing is they've made doubt the integrity of almost any other retail outlet chain, even Target.If Wal-Mart isn't careful, someone with a LOT of integrity is gonna have 'em shut down. It could happen, people, don't dismiss it.

I'm sorry,Sam.

Posted by: dav | February 23, 2006 12:32 PM

Gentlemen,
In the Commonwealth of Pennsylvania, and I use the word "commonwealth" with reservation, Wal Mart is making a dent. And I am glad of it! USSteel, Westinghouse, Bayer, Gulf Oil and all the other companies decamped for greener ground. Why? Unions ... from steel workers to school teachers ... if you don't have the paper you don't get in. Talk about favoritism. What has this to do with Wal Mart? WM hired me when no one else would. That is the fack, Jack. So don't go bitchin' and moanin' when WM comes to call. For some of us, WM has been a savior. And please spare me that ultra-liberal crap. If you don't like WM, move out of the way.

Posted by: WalMart Drone | April 3, 2006 10:03 AM

The comments to this entry are closed.

 
 

© 2010 The Washington Post Company