State Lawmakers Call for Hearings on Wal-Mart’s Health Benefits
Democratic legislators on Thursday said that next year they would hold budget hearings on Wal-Mart's health benefits, the AP/Contra Costa Times reports. Senate Budget Committee Chair Wes Chesbro (D-Santa Rosa) said he would call former Wal-Mart employees to testify before the committee about the company's employment practices, review internal Wal-Mart documents and call on Wal-Mart executives to testify on the issue (Chorneau, AP/Contra Costa Times, 10/29).
In a recent study, Arindrajit Dube and Ken Jacobs of the University of California-Berkeley's Institute for Industrial Relations examined statewide data on wages that large retailers pay, the number of workers in the retail industry who receive state assistance and payroll information that they obtained from lawsuits concerning Wal-Mart's wages and benefits.
Dube and Jacobs found that Wal-Mart's wages on average were 31% lower than those of other retailers with at least 1,000 employees. Wal-Mart employees were paid an average of $9.70 per hour, compared with other large retailers' workers who earn an average of $14.01 per hour.
In the report, researchers assumed that given Wal-Mart's low wages, workers are forced to supplement their incomes with Medi-Cal, food stamps and other public assistance programs. Dube and Jacobs calculated that state taxpayers contribute about $1,952 annually per Wal-Mart employee for public services, 39% more than the average public assistance cost of $1,401 for workers at other large retailers.
Wal-Mart spokesperson Cynthia Lin said the study used outdated information from its payroll in 2001. Company officials said that 90% of Wal-Mart employees have health insurance through the company or through a spouse's or parent's employer. Lin said that 50% of insured employees are covered by the company's health plan. She added that about 67% of workers are seniors, college students or second-income providers (California Healthline, 8/3).
Chesbro said, "If some large employers are increasing our budget problems by not taking responsibility for their workers and the state is picking up the tab -- we need to find that out." He added, "If Wal-Mart is not providing for their workers, it puts more pressure on the system. It puts pressure on other employers to drop their health care to be able to compete" (AP/Contra Costa Times, 10/29).
Lin declined to say whether the company would provide its records to the Legislature, but she said the company would "respond accordingly" (Rojas, Sacramento Bee, 10/29).
Assembly member Sally Lieber (D-San Jose) also suggested that CalPERS, the nation's largest public pension fund, should consider selling its 18.8 million shares of Wal-Mart stock, which are valued at more than $1 billion.
Lieber said, "The Legislature needs to take a close look at how we put our money behind our values," adding, "Wal-Mart is making a big push to expand in many areas of our state. Given the impact on the health system, the question we need to ask is whether we want to invest in this expansion" (AP/Contra Costa Times, 10/29).
The two proposals by state lawmakers follow Wal-Mart's $500,000 contribution this week to a campaign to defeat Proposition 72, a referendum on the Nov. 2 statewide ballot asking voters to uphold or repeal SB 2 (Sacramento Bee, 10/29). SB 2 is scheduled to take effect Jan. 1, 2006, and will require employers with 200 or more employees to provide health insurance to workers and their dependents by 2006 or pay into the state fund. Employers with 50 to 199 employees will have to provide health insurance only to workers by 2007.
Companies with fewer than 20 workers will not have to comply with the law, and the law also will exempt employers with 20 to 49 workers unless the state provides them with tax credits to offset the cost of health coverage (California Healthline, 10/28). Wal-Mart officials said they "entered the business-led campaign to repeal [SB 2] after being singled out in a television commercial by supporters" that mentioned the Berkeley study (Sacramento Bee, 10/29).
Additional information on Proposition 72 is available online.