Who pays for Wal-Mart workers' health care? Wal-Mart, right? No, we all do.
Despite Wal-Mart's mammoth profits, the company actually burdens us -- taxpayers -- with its workers' health care costs. In a disturbing nationwide trend, more state studies are revealing that Wal-Mart employees are the top recipients of taxpayer-paid health care. The scope of this corporate failure is massive: Wal-Mart is the largest private employer in the United States, with over 1.3 million associates, yet they fail to give health insurance to 54 percent of its employees.
"So here's how it works: Wal-Mart offers insurance, but aggressively shifts the cost onto its employees. The low-wage workers then pass up the unaffordable coverage and turn to the states. If this isn't exactly company policy, it is at least company philosophy. CEO Lee Scott, at the company's recent ''summit'' for the media, even described it. He said some state health programs are 'so lucrative that, in fact, it's hard to be competitive with them and certainly extraordinarily expensive to be competitive with them.'" (Editorial, Miami Herald 6/11/05)
I recommend that you explore the Wal-Mart Watch site to acquaint yourself with the real cost behind those famous low prices. Then make it part of your personal integrity not to support such exploitation. Don't shop there. Shop, if you can, at locally owned businesses. And, hey, you Tulsa people. Let's band together and try to get Costco to open a store in Tulsa. They treat their workers right and their CEO does not make an obscenely outrageous salary. Check out this New York Times article entitled "How Costco Became the Anti-Wal-Mart":
So you see, it is possible to combine low prices with justice for workers. And so I say once again, with feeling: PLEASE don't shop at Wal-Mart!
Mr. Sinegal [Costco's CEO] just might be America's shrewdest merchant since Sam Walton.
But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well. Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."
Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.
IF shareholders mind Mr. Sinegal's philosophy, it is not obvious: Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19. (Written in July, 2005)