Trade Group Challenges Wal-Mart on Health Care

Source: WSJ

By MIGUEL BUSTILLO and JANET ADAMY

The retail industry's biggest trade group is launching a broad attack against Wal-Mart Stores Inc. for supporting congressional proposals requiring employers to help pay for health insurance, an idea that has gained political currency thanks to the backing of the nation's largest private employer. The National Retail Federation plans to send an aggressively worded letter Monday to its members encouraging them to take a stand against Wal-Mart's backing of an employer-health-care mandate. The federation is the primary lobbyist for the retail industry, which comprises 1.6 million businesses and employs roughly one in five working Americans. Wal-Mart isn't a member of the group.

(snip)

The call to action escalates a dispute that has been simmering since the beginning of the month after Wal-Mart announced its support of a centerpiece of President Barack Obama's $1 trillion plan to extend health-care coverage to nearly all Americans. The prospect of an expensive new health-care requirement comes at a particularly bad time for merchants. Wal-Mart has been a rare exception in an industry that has for months experienced slumping sales. Retailers are under intense pressure from Wall Street to preserve profit margins by tightening labor costs.

The most liberal proposal to have companies help pay for the health-care overhaul, currently under consideration in the House, would require all but the smallest employers to provide workers with basic benefits or contribute up to 8% of their payroll toward helping the government get them coverage. A bipartisan proposal being considered in the Senate would place a greater burden on employers of low-wage workers, a prospect that particularly worries retailers and that Wal-Mart has also expressed concerns about.

(snip)

Health-care expenses are a sensitive topic in the labor-intensive retail sector, where low-paid workers and high employee turnover are a standard feature. Many companies have typically offered minimal benefits, partly because their workers don't earn enough to share much of the cost of premiums, and because employers haven't seen much advantage in extending coverage to workers who were unlikely to stay long, benefits experts said. When retail workers do qualify for coverage, they usually pay more. Nearly three-fourths of retail workers enrolled in coverage plans had to meet an annual deductible, compared with nearly 63% for nonfederal employees overall, according to the Agency for Healthcare Research and Quality, part of the U.S. Department of Health and Human Services. While retailers have typically opted for the bare minimum in health benefits, firms including Wal-Mart, Toys R Us Inc. and Home Depot Inc. have begun tinkering with more expansive programs in hopes of reducing employee turnover. Costco Wholesale Corp. for years has enjoyed a reputation for generous health benefits -- more than 90% of its workers have coverage with the company -- and executives have defended their strategy as a boon to productivity.




Read more: http://online.wsj.com/article/SB124743949245229661.html

We began doing that ?60 or so years ago when the US was in a totally dominant position in the world scene. Now it doesn't make any sense. Other countries have made the switch. The US Congress is very slow to learn.

but without a good alternative.

I don't know why it is the Democrats who have been pushing employer-paid insurance that ties employees to their jobs and, as we've seen now, once they lose their jobs they also lose their health coverage. And COBRA is too expensive for most.

I think that this started after WWII to by-pass wage freeze. This is why it was called "fringe" benefits that have stopped being "fringe" many years ago.

:kick: