Work For Wal-Mart? You May Need Welfare

When Susan Mediger-Paul went into labor in 1995 and gave birth prematurely to her third child, she knew the health insurance provided by her employer would not cover the cost. Nor would it pay for the birth of her fourth and fifth child later on, in 1998 and 1999. She said she relied on Minnesota Care, the state's public assistance healthcare, to pay for the multiple hospitalizations of her children, two of whom suffered from asthma.

Mediger-Paul seems an unlikely candidate for public assistance healthcare. She held a good-paying job as an accountant at Wal-Mart, the infamously profitable company and the largest private sector employer in the nation.

So why was Mediger-Paul on the dole?

Because "Wal-Mart's health insurance was awful!" she says. Mediger-Paul opted out of the company health plan, she says, to pay into the state healthcare system. "I had two preemies and they both had asthma--there was no way I would have made it on Wal-Mart's insurance." With cheap premiums but large deductibles and gaps in care, she says the Wal-Mart insurance wouldn't even have covered her kids' vaccinations.

Mediger-Paul is in good company as she complains about the inadequacy of Wal-Mart's healthcare. This week, in an attempt to hold large employers accountable for their worker's healthcare costs, Senators Ted Kennedy (D-Ma.), Jon Corzine (D-NJ) and Representative Anthony Weiner (D-NY) introduced the Health Care Accountability Act. Originally authored by the union-backed Wake-Up Wal-Mart campaign, the legislation would require states to publicly report the number of employees that companies have on taxpayer-funded public health care. These annual reports would include the state's cost of providing healthcare to those workers.

"We deserve to know the truth about the high cost of Wal-Mart's greed," says Paul Blank, the campaign director for Wake-Up Wal-Mart.

Mediger-Paul's home state of Minnesota has been debating similar legislation, which is set to pass by the end of the month. Additionally, 23 other state legislatures have recently debated or passed these so-called "Wal-Mart bills." Some states have moved even further, considering "pay or play" legislation that would force large employers to either commit a certain percent of payroll costs to employee healthcare, or pay into the state healthcare system.

The idea, say supporters of the legislation, is to stop subsidizing corporate profits with public healthcare money.

The Wal-Mart bills have been sponsored by a number of state lawmakers interested in universal healthcare, but labor organizers have honed in specifically and vocally on Wal-Mart. The legislation has stirred up a vitriolic fight between a labor movement trying to stay relevant in a service and retail economy and Wal-Mart, a profiteering giant that relies on cheap labor and would rather shut a store down than see it unionized. At the core of the debate is a difference in opinion over what is considered adequate, and who is ultimately responsible for the healthcare needs of low-wage workers.

"I believe every worker should have healthcare provided by the employer. It should be a right," says Bernie Hesse, director of organizing for United Food and Commercial Workers Local 789 in Minnesota. He also believes that part of the way to get there is to create a public education campaign against Wal-Mart, exposing "what a shitty place it is and how bad they treat people."

Nate Hurst, Wal-Mart's public and government relations manager, says Wal-Mart is living up to its responsibility, emphasizing that his company does provide health insurance that has saved lives. As for any snags in affordability or coverage, he implies that the whole healthcare system is at fault. "We certainly believe it's long past time for meaningful reform for our healthcare in this country, but these bills do not address these concerns, nor do they even ensure that one more person comes off the list of America's uninsured."

What the state legislation (and now the proposed federal legislation) has done is shine a light on the reality of people receiving public assistance healthcare, many of whom are gainfully employed and even have access to health insurance, but simply cannot afford it. Even when companies like Wal-Mart offer comparatively cheap health insurance premiums, the expense is still a major chunk of change for workers making less than $10 per hour on average. And even with health insurance, the deductibles, which range from $350 to $1,000 for a single person, make a doctor's visit a budget-buster.

In a 2005 report, Union Network International criticized the disconnect between the retail giant's health plan and the reality of the low-wage workers it was being offered to: "A single Wal-Mart shop worker could end up paying about 45% of her or his salary before seeing a single benefit from participating in the scheme."

And that's only for the workers who are eligible. There is a six-month waiting period for full-time employees to become eligible for coverage, and a two-year waiting period for part-time employees, whose dependents are never eligible for coverage under Wal-Mart's health insurance plan. (Anyone who works less than 34 hours per week is considered part-time.)

Wal-Mart reports that 47 percent of its 1.2 million employees are covered through the company health insurance, saying that many more are covered elsewhere, through other family members or retirement plans. Critics assert that most other large employers insure about 66 percent of their workforce, and use this number as proof of the inadequacy of Wal-Mart's health coverage. "Wal-Mart has led this kind of healthcare cost shift," says Blank. "They provide such inadequate healthcare with high premiums and, combined with poverty level wages, that leads tens of thousands of their employees to public assistance healthcare."

The scrutiny of Wal-Mart's health coverage began a couple years ago when Medicaid costs and health insurance premiums were skyrocketing. Universities and unions produced a number of reports that highlighted the cost of public assistance for Wal-Mart workers who received welfare, food stamps, public health care, and the like. In October 2003, the AFL-CIO released a pointed attack on the mega-store with its report "Wal-Mart: An Example of Why Workers Remain Uninsured and Underinsured," which blamed the company's penny-pinching health insurance package for skewing the market negatively.

With fewer than half its employees covered under plans that often had high deductibles and gaps in care, the report argued, Wal-Mart saved money and made it difficult for other retailers to provide decent health insurance and still remain competitive. In 2004, a UC-Berkeley study reported that the state's Wal-Mart workers and their dependents received $86 million in public assistance, including healthcare, welfare and free school lunch programs.

But it wasn't just professors and unions attacking the mega-store; U.S. Rep. George Miller (D-Ca.) released a report in February 2004 criticizing the breadth of Wal-Mart's policies, from discrimination to low wages and poor health insurance. The report, titled "Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart," called the retailer the "lowest common denominator in the treatment of working people." It compared Wal-Mart to other companies, finding that it spent considerably less money on healthcare per employee. It pointed out that while Wal-Mart can boast it covers many catastrophic illnesses and does not have a lifetime cap on benefits like some other plans do, the healthcare is far from comprehensive. For example, the report noted that "routine medical needs" are often not covered, while rare organ transplants are covered.

The realization that thousands of low-wage employees from Wal-Mart and other big corporations might be the ones cramming Medicaid offices around the country made many lawmakers balk. Georgia was the first state to take action, passing a bill that required public reporting of employers for all those enrolled in the state healthcare system. When the numbers were tallied earlier this year, it was little surprise that Wal-Mart topped the list, with more than 10,000 children of its workers receiving public healthcare. Out of the 13 states that have gathered similar data, Wal-Mart has topped the list of 12.

Wal-Mart spokesmen have fended off these critiques, saying that it may end up at the top of any list simply because it has so many employees. They are quick to remind the public that Wal-Mart will create 100,000 jobs this year, and that 160,000 people who didn't have health insurance previously now have it through their coverage. "The question to ask is 'where would they be without Wal-Mart?' We help insure over 900,000 Americans [which includes employees' dependents]. If all of a sudden we stopped doing that, where would we be?" asks Hurst. He chalks up the intense criticism to self-interested unions attempting to publicly smear their arch-enemy. While this response may miss the point, it is not incorrect.

Frustrated unions that have largely given up on attempts to organize individual Wal-Mart stores have shifted gears by forming a grassroots political movement focused on legislation. In April, United Food and Commercial Workers, which has been unsuccessful in its traditional attempts to organize stores for the better part of a decade, launched its Wake-Up Wal-Mart Campaign. Already touting one major success with the introduction of the Healthcare Accountability Act, the campaign is calling for legislation in all 50 states that would force large employers to pay a minimum of 10 percent of payroll costs toward employee healthcare. The proposed legislation follows a "pay or play" Maryland bill that was passed, but later vetoed by the governor.

"This type of grassroots organizing marks a shift into a broader social justice campaign," said Blank. "It points out not only the incredibly bad things Wal-Mart does to their workers--like making them work off the clock, locking them in the stores, discriminating against women--it also builds a national grassroots project based on all those things that have been negatively affected by Wal-Mart's greed." Already boasting 10,000 people onboard the campaign, Wake-Up Wal-Mart held 325 supporter meetings this month and, on June 23rd, kicked off a series of house parties to spread support for the campaign.

Other union-backed campaigns focusing on legislation include the Change to Win Coalition, which declares one of its three goals to "Stop the Wal-Marting of good jobs in America," and Wal-Mart Watch, which has bombarded the media with criticism of the company's policies.

Wal-Mart, by its sheer size, is a leader that sets an example in the retail industry. The activist groups, which are proudly union-supported, feel they need to hold corporate America's feet to the flames, if not by organizing unions, then by passing legislation. "You're up against Goliath and sooner or later we're going to slay that dragon," said Hesse, the Minnesota UFCW organizer. "I'm not absolving us from organizing the workers, but given the present-day climate, we are going to have to figure out many different attacks on Wal-Mart."

As for the fate of the new Health Care Accountability Act that would produce lists of companies that have 50 or more employees receiving public assistance healthcare, Mediger-Paul just laughs. "Do I think Wal-Mart will be on that list? Yes. I could name 50 people in each store [in Minnesota] that are on public assistance. I could name 20 full-time employees right now who are on medical assistance."

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