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Wal-Mart Levels Another Attack on its Workers by Cutting Healthcare Coverage

October 22, 2011

Wal-Mart Stores just announced it will no longer offer health insurance to new part-time U.S. employees who work fewer than 24 hours a week and will charge workers who use tobacco more for coverage.

Wal-Mart, the largest retailer in the world and the nation’s largest private employer, is also slashing the amount that it puts in employees’ healthcare expense accounts by 50 percent.

The cuts to workers healthcare benefits come after it was reported last August that Wal-Mart posted a second-quarter profit increase of 5.7 percent a net income increase of $3.8 billion.

Walmart's Walton Family

It was also recently announced that three members of the family that owns Wal Mart, David, Christy and Jim Walton,  were on the Fortune 400 list of the top 10 richest Americans, clocking in with a combined net worth of  $70.4 billion.

The move is a major departure from a few years ago when the retailer, under heavy criticism for not providing health care coverage for many workers despite huge profits, expanded coverage for employees and their families.

The notoriously anti-union company had been blasted in the media for not providing coverage and, in some states, handing employees pamphlets showing them how to apply for state subsidized health coverage for low-income workers, in effect having taxpayers pick up the tab for health insurance for those Wal-Mart employees who successfully applied for those state programs.

Wal-Mart’s plan to roll back health-care coverage for part-time workers and raise premiums for full-time employees should set off alarm bells for American workers,” said Joseph Hansen, United Food and Commercial Workers (UFCW) president. “This lowering of working standards will have repercussions throughout the retail industry.”

Industry observers also say the changes could have implications for millions of other workers, as more companies on the fence could replicate its moves.

Starting next year, Wells Fargo & Co will ask employees to fund their own medical expense accounts or choose to pay higher insurance premiums and have the company fund them, following the lead of companies such as General Electric that offer account-based healthcare plans.

As the world’s largest retailer, Wal-Mart sets the industry standards for wages, benefits and corporate responsibility. By offering what amounts to poverty wages for most of its workers, Wal-Mart sets a horrible standard for all American retail workers. Wal-Mart’s average retail worker makes $8.81 per hour. This translates to annual pay of $15,576, based upon Wal-Mart’s full-time status of 34 hours per week, well below the poverty line for a family of four.

In addition, Wal-Mart passes significant costs on to the communities where it operates. Because Wal-Mart does not provide affordable health care, many Wal-Mart workers and their families participate in publicly-funded health care and other public assistance programs. Most Wal-Mart stores also create traffic and crime problems that result in the need for more law enforcement officers. At the same time, Wal-Mart sends much of its revenue out of local communities, while local businesses keep more consumer dollars in the local economy.

It because of this and more the Los Angeles area UFCW Local 770 has been organizing a community-based campaign to get the City of Burbank to deny a proposed Wal-Mart to be built in the Empire Center.

UFCW states that a new Wal-Mart would devastate the community and would directly threaten  union jobs.

Click here to get involved the stop Wal-Mart in Burbank campaign.

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