Governor Schwarzenegger recently vetoed a bill that would have required companies with over 10,000 employees, such as Wal-Mart, to devote an amount equal to 8% of its payroll to employee health care benefits. [1] Schwarzenegger says that he vetoed the bill because it wasn't a proper solution to the rising cost of health care and he felt that it was a "job killing bill." The Walton's have made large political donations very close in time to each decision to veto a bill in Wal-Mart's favor.[2]
Within the last year, the Walton's have donated over $800,000 in political gifts to Schwarzenegger's various political organizations, $250,000 of which was donated within the same day as his veto against a bill that would have required the state to disclose which companies' employees received government health care benefits meant for poor residents. [3] The Foundation for Taxpayer & Consumer Rights reports that the Walton's and Wal-Mart rank 15th on the list of the biggest donors to Schwarzenegger-controlled campaign committees. [4]
Meanwhile "Tens of thousands of Wal-Mart employees are on taxpayer-funded health care," says Chris Kofinis of Wake-Up Wal-Mart. [5] Wal-Mart's health insurance covers only 44% or approximately 572,000 of its 1.3 million workers in the U.S. [6] Wal-Mart spends an average of $3,500 per employee for health care, 27% less than the retail-industry average which is $4,800. [7]
Wal-Mart announced last April that it was going to make a health care plan available to part-time workers after one year of service instead of the two-year requirement that they previously had. [8] They also extended the coverage to include children. [9] Wal-Mart estimates that this new change could add health coverage to 150,000 more workers, if all of the eligible employees choose to take part in the program. [10] Yet the new plan provides benefits only after a $1,000 deductible is paid ($6,000 for a family), so many Wal-Mart employees won't be able to afford the coverage and will not participate in the plan. [11]
Wal-Mart CEO, Lee Scott, admits that Wal-Mart employees can get better value from taxpayer funded health care than from Wal-Mart's own health care plans saying, "In some of our states, the public program may actually be a better value - with relatively high income limits to qualify, and low premiums." [12] The company realizes that they are forcing the cost of their employees' health care on tax payers, all the while driving competing companies to do the same.
Because of Wal-Mart's practices in employee health care benefits, other companies have been forced to reduce their health care benefits to stay in business. [13] Many local communities prohibit Wal-Mart from opening stores within their town for this very reason. [14] Chicago refused to allow Wal-Mart to open within the city until the company agreed to pay a living wage. [15] Apparently paying a living wage was initially resisted by Walt-Mart, but an agreement was finally reached and the first Wal-Mart stores are in the process of being built in Chicago. [16]
Small businesses that aren't able to force suppliers to sell for lower prices, as Wal-Mart does, find it impossible to compete. [17] These failed business and their employees are in many instances a part of the population that Wal-Mart claims to have created a job for. [18] Driving small retailers out of business is the kind of damage to local economies the the bill vetoed by Schwarzenegger was intended to prevent. [19]
With so many reasons that Wal-Mart should not be able to pay below a living wage and not provide reasonable health insurance to its employees, Governor Schwarzenegger's receipt of large donations from the Walton's is being highly scrutinized as a possible influence. Schwarzenegger should take his own advice against special interest briberery, and refuse to take donations that could serve as a conflict of interest with his duties as governor. Even in a capitalistic economy, laws have to be put in place to ensure fair labor standards and prevent monopolies. If the government is being controlled by Wal-Mart, who is going to protect the people from those economic dangers?
[1] James, Ben, "Schwarzenegger Terminates California Wal-Mart Bill", Finance Law 360, September 14, 2006. Retrieved on September 23, 2006.
[2] Hopkins, Jim, "Wal-Mart, Walton family support Schwarzenegger", USA Today, September 30, 2005. Retrieved on September 23, 2006.
[3] Id.
[4] Id.
[5] Id.
[6] Bernstein, Aaron, "A Stepped-Up Assault on Wal-Mart", Business Week, October 20, 2005. Retrieved on September 23, 2006.
[7] Wysocki, Bernard Jr. and Ann Zimmerman. "Wal-Mart Cost-Cutting Finds a Big Target in Health Benefits", Wall Street Journal, September 30, 2003. Retrieved on September 23, 2006.
[8] Freking, Kevin, "Wall-Mart to Offer More Health Coverage" ABC News, April 17, 2006. Retrieved on September 23, 2006.
[9] Id.
[10] Id.
[11] Id.
[12] Fulton, Deirdre, "No Sympathy for the Devil", Boston Phoenix, October 14, 2005. Retrieved on September 23, 2006.
[13] Stone, Kenneth E, "Impact of the Wal-Mart Phenomenon on Rural Communities." (published in Proceedings: Increased Understanding of Public Problems and Politics-1997, by Farm Foundation, Chicago, Illinois). Iowa State University. 1997. Retrieved on September 23, 2006.
[14] Stone, Kenneth E.; Artz, Georgeann; Myles, Albert. "The Economic Impact of Walmart Supercenters on Existing Businesses in Mississippi." Mississippi State University. 2003. Retrieved on September 23, 2006.
[15] Bellandi, Deanna, "Chicago Council Passes Living Wage Act", Newsvine.com, July 27, 2006. Retrieved on September 23, 2006.
[16] Id.
[17] Basker, Emek. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion." University of Missouri. 2002. Retrieved on September 23, 2006.
[18] Id.
[19] Shopping Centers Today, "Schwarzenegger Vetoes Anti-Wal-Mart Bill", International Council of Shopping Centers. Retrieved on September 23, 2006.
Comments