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WalMart Shifts Employee Healthcare Costs To States

Posted by: Linda Carbonell on October 21, 2011.

WalMart's footprint in America

WalMart, America’s largest employer, is doing so badly in the post-recession economy that they are going to cut or reduce health care benefits, and consequentially shifting those employees to Medicaid.

All together now: bo-o-o-o-o, his-s-s-s-s.

The five Walton heirs who are listed in the Forbes 400 Billionaires list are worth a total of $86.4 billion. To be fair, Christy Walton is listed as “and family,” but the others – Jim, Alice, S. Robson and Nancy – are listed as individuals. Nancy is the only one not in the top ten. She’s only worth $2.9 billion. Their combined net worth has grown from $64.6 billion in 2006, a 33.7% increase in wealth during and after the recession. When recently interviewed, Alice Walton laughed off criticism of her family’s company, while explaining how, during a horse competition, she placed $12 million in phone bids on art for her private Crystal Bridges Museum in Bentonville, Arkansas.

WalMart allows its employee to buy health insurance, no matter how few hours per week they work. They do not provide figures on how many of their minimum-wage, under 24-hours-per-week actually buy the insurance, but the State of Georgia did provide some interesting figures in the mid-2000′s. According to Georgia, half the children of WalMart employees were on S-CHIP one year. The following year, Georgia’s S-CHIP program went bankrupt. Seriously, if you are bringing home less than $175 a week, how much could you afford for health insurance?

First off, all employees working less than 24 hours per week will no longer be able to buy insurance through the company. Then, WalMart is going to increase the employees’ contributions to their health savings accounts by 50% and increasing other employee’s health insurance premiums by 40%. And for empolyees working less than 33 hours, their spouses will no longer be covered. The New York Times has reported that 52% of Walmart’s employees received their healthcare coverage from the company in 2009.

Any takers on bets as to how many WalMart employees are going to find their hours cut to less than 24 per week?

The statement from Walmart pleads poverty, saying that “rising costs” are responsible for this decision: “These moves are also occurring in a post-recession period when WalMart has been struggling to regain its footing after months of disappointing or flat sales. And with unemployment still hovering around 9%, employers may feel less compelled to offer expansive benefits to people desperate for work.”

WalMart “pioneered,” for want of a better word, most of the standard practices of retail and food service in America – the use of distribution centers instead of having products delivered to individual stores, the ability because of those distribution centers to cut massive discount deals for products thereby undercutting smaller businesses, the limitation of hours-per-week to duck having to provide benefits. They took a lot of heat over the lack benefits and implemented these health savings accounts, but not at costs that their employees would be able to easily afford. When WalMart was applying to open its first store in Vermont, a citizen’s study proved that by the time a WalMart was a year old, the net job gain was exactly one job because of the number of businesses that closed. In his autobiography, Sam Walton gave instructions on how to destroy a downtown in the South, where cities are incorporated but the surrounding towns are just part of the unincorporated county. He said, first open a small store in the city, build up a loyal customer base and then build a superstore in the county. Drive through the south and you will see the consequences of his philosophy – hundreds of dead and dying downtowns.

Walton also used to brag about his stores carrying Made In America products. Now, WalMart is China’s third largest customer, the only retailer in a list filled with nations.

WalMart has made the decision that they can make these changes to health care coverage because they have their employees by the short hairs. People can either accept whatever crumbs the billionaire Waltons trickle down to them or they can hit the streets, disqualified for unemployment insurance because they quit their jobs.

But more importantly, this decision by WalMart is going to increase demand for Medicaid coverage for WalMart employees and their children. Rather than lose a dime of their $86.4 billion, the Waltons have decided to make middle and lower income tax payers foot the bill for health insurance for their expendable employees. And to protect or even increase the Walton family’s tax breaks, Republicans are seeking to severely cut or eliminate Medicaid.

It might be time to expand Occupy Wall Street. After all, it’s not just the banks and hedge fund managers who are screwing the 99%.