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Wednesday, April 19, 2006

Wal-Mart Costs You Nothing For Health Care

I was over at Gun Toting Liberal today, reading his post on Wal-Mart caving in on benefits by lower co-pays to $3 on certain prescriptions when I got to thinking, why has this whole Wal-Mart benefits thing been nagging at me?

Then it hit me, bad math, that's why it bugs me. The huge gripe has been that states are having to pick up the tab for Wal-Mart's employee health care, and it's not fair. But it doesn't cost them anything more than they were already paying.

You see, for Wal-Mart to be putting a drag on a states medic-aide costs, the employee would have had to left a job that paid better, and had benefits better than Wal-Marts. If they didn't, the state was, in all likelihood already picking up their health care costs.

So if we are to believe the folks on the left, Wal-Mart has some kind of supreme, black magic power that allows them to suck hundreds of workers out of good paying jobs, with benefits to work for them. If that isn't so, then how are they costing the state more?

In fact, if only one employee is taking Wal-Mart up on their offer of benefits, they are instead saving the state money. Unless the folks at Wake Up Wal-Mart, or Wal-Mart Watch can show some proof that none of the employees were using state aid before they took jobs at Wal-Mart, their contention is wrong, period.

I know that there are at least one or two folks who do economics who read this, please chime in and tell me how it could be different that I've just stated.

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11Comments:

Blogger David Schantz said...

I know people whose children went to work at Wal-Mart as soon as they got out of High School. When they lived at home Mom and Dad took care of their health care. Now they are out on their own, have jobs and have to count on state aid to cover their health care cost. They make just enough to stay off wel-fare.

God Bless America, God Save The Republic.

8:22 PM  
Blogger Crazy Politico said...

So, evidently they are unskilled workers, who would have ended up on the states list anyway, Wal-Mart or not, correct?

8:40 PM  
Blogger Gun-Toting Liberal said...

CP:

CP, first - thank you for the link. You brought up some interesting points, for sure.

"So, evidently they are unskilled workers, who would have ended up on the states list anyway, Wal-Mart or not, correct?"

I'll have to take exception with the above comment, CP. You are predicting what they would or wouldn't have done versus addressing the fact alleged in David's response. In my opinion, David validly addressed a flaw in your argument that these people would have not increased the burden upon the state.

Also, I would point out that when somebody goes from working at, for example, a trash pickup job, then goes to work for Wal-Mart, they are now exposed to new industrial disasters, and more publicly airborne viruses, thereby increasing their burden upon the state.

I'll say it again though; you've brought up some interesting points, friend. I am interested in hearing with the experts say as well...

9:47 PM  
Blogger Crazy Politico said...

This comment has been removed by a blog administrator.

4:08 AM  
Blogger Crazy Politico said...

GTL, You actually get to another point. If someone has the skill set to be somewhere else, and not "supposedly" on the dole while working at Wal-Mart why aren't they? And is it then still Wal-Mart's "fault" that they are getting state aid?

When I went grocery shopping there Sunday (saved $26 over the UFCW union store in my neighborhood) I didn't notice a set of shackles on anyone working there.

On the trash pick up guy, BFI and Waste Managment both pay better than Wal-Mart or any retail job, and offer full benefits. (Median Wage nationwide is $11.60 an hour, according to BLS).

If you check out the wages for retail sales cashiers, (http://www.bls.gov/oco/ocos116.htm) you see the guy should have kept picking up trash.

4:12 AM  
Blogger Mahndisa S. Rigmaiden said...

04 19 06

CP you raise interesting points and since I know very little about all of that, the comments and your thoughts were most illuminating. To me, if someone is working and getting benefits, they are taking away taxpayer burdens, which is good. I guess the biggest question is how many Walmart employees are fulltime or work enough time to get benefits? A recent strategy in many areas is to higher contractors who already get benefits via an agency, or pay out of pocket and hire variable percentage employees so they can get away with not paying out benefits. I wonder if Walmart has employed this strategy. So now, we may have a case where Walmart gainfully employs many people, but what if seventy percent of them were variable employees? Hmmm some research should be done now... Thanks:)

4:34 AM  
Blogger James B. said...

Well I am not an economist, but I am a graduate business student, and you are correct. The pay and benefits at WalMart aren't great, but they are better than the retail sector as a whole. Most people don't go into retail with the expectation of getting rich. The cost to society is not comparing a job at WalMart to a job at Microsoft, but an equivilant retail job, or no job at all.

The top executives are well compensated of course, but being thrifty is actually part of corporate culture. WalMart is famous for doing things like making managers sleep two to a room and flying coach class while on business trips. They are not just being mean to their employees, low costs and low prices is their business strategy.

10:13 AM  
Blogger Gun-Toting Liberal said...

CP; good point, my friend, but it was just an example - obviously a bad one at that, to use a "trash collector" as a model to make my point.

"If someone has the skill set to be somewhere else, and not "supposedly" on the dole while working at Wal-Mart why aren't they?"

Not so sure just anybody can work at Wal-Mart for any real length of time. I'm sure it is a harder, and more thankless job than most give it credit for being.

"When I went grocery shopping there Sunday (saved $26 over the UFCW union store in my neighborhood)..."

While it's hard to find groceries on the Internet, you can save even more money on non-grocery items by purchasing online. I'll sometimes go to Wal-Mart just to make my purchase selections, mostly because no sales hack is going to bug me there, then I happily walk out the door with all of my money in my wallet and make my purchases online. I save tons of moolah doing this.

I think your other commenter, Mahndisa S. Rigmaiden made one of the biggest points to the discussion:

"I guess the biggest question is how many Walmart employees are fulltime or work enough time to get benefits?"

My only qualifications to weigh in on this question comes from having two close family members who once worked there.

According to them, it is a fact that the vast majority of employees at Wal-Mart (and many other big box retailers for that matter) are held just under the threshold of hours per week which would qualify Wal-Mart to provide health care options to those employees. 29 hours per week keeps the employer from having to do this in Alabama where I am a resident, and it is no surprise that a huge percentage of local Wally-World employees work 25-29 hours per week in these parts.

Most of the employees who are in this category want to work more hours, want to go fulltime so they can make a living, but those slots are few and far between. Wally-World keeps tempting them to work hard, work odd hours, work on holidays, etc., as a carrot to one day become tenured enough, or given enough hours to eventually receive healthcare bennies.

One family member tells me that Wal-Mart realizes it will wear the vast majority of those employees out before they will ever get their healthcare benefits; that it calculates this as a cost-effective way to do business, and that they simply do not care about losing any single one of them because there is always a pool of "fresh blood" to come along.

Is this illegal? Of course not. Is it immoral? To me, yes - but then again, I am a liberal American and I wouldn't expect a conservative American to see it the same way. While liberalism has its own flaws, I see this as one of the largest flaws in conservatism; the human element just doesn't mean anything unless it can be shown as nothing more than a net gain, or a net loss on a spreadsheet at the end of the tax year.

I'm not picking on you guys for that, but the philosophy assumes a human being is either a deadbeat (net loss) or a "company man" (net gain), but leaves out everybody in the middle who contributes to the success of the business model, and (still) in my opinion, a burden (net loss) upon the community.

Great discussion, y'all! Way to go, CP...

12:44 PM  
Blogger Crazy Politico said...

Actually, you are wrong on a couple of points, possibly because of one bad Wal-Mart manager your family/friends have dealt with. They actually have an 80% full time employment rate, double the retail average. (At least according to what they filed in court documents.)

As for the groceries, I buy very few non-grocery items there, I can usually shop around and find that stuff cheaper. Just can't find cheaper vittles, and refuse to pay more to donate to someone elses pocketbook.

As for the conservative philosphy, I think you have it partially right.

I see producers, and dead weight. Some producers chose to stay at the bottom of that scale, for what reason I don't know. There are HUNDREDS of different programs for folks in low wage jobs to get ahead that are under used. Pell Grants, free student loans, scholarships, etc.

The higher level producers work to get farther up, either where they are, or somewhere else. Yes, you might work a bunch of extra hours, and go to school in off work time, etc, but in the end the sacrifice is worth it.

The top level producers pull a bunch of people along with them, and pick the one's to come to the top with them based on what they do to get there.

The dead weight bitches no one will move them to the top.

6:58 PM  
Blogger The Conservative UAW Guy said...

Good points, CP.

4:51 AM  
Blogger Gun-Toting Liberal said...

They love ya, bro... so do I, God Bless ya...

;-)

3:19 AM  

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