Wal-Mart: the $288 billion welfare
Wal-Mart is the sort of company for which superlatives were
invented. Just named the number-one corporation on the Fortune
500 list for the fourth year in a row, the country's largest
private employer pulled down roughly $288 billion in revenue
last year - and over $10 billion in pure profit.
That's larger than the annual GDP of Saudi Arabia. Five of
the top 10 richest Americans hail from the Walton family. And
yet Wal-Mart is what former President Ronald Reagan might
refer to as, well, a welfare queen.
As states across the country struggle to balance budgets
and keep their Medicaid programs in check, data from Florida
and 12 other states show Wal-Mart to be a top corporate
beneficiary of state-run, taxpayer-funded programs like
That is, the retail behemoth deliberately cuts corners on
employee health care, forcing a disproportionate number of its
employees into state programs in order to receive health care
for themselves and their families.
Of Wal-Mart's 1.2 million employees, only about 500,000 of
them receive Wal-Mart health care. That's because the employee
share of premiums is so high - in some cases, up to $250 per
month, about 25 percent of the average monthly salary of a
Wal-Mart hourly employee - that many full-time workers simply
can't afford it.
In Florida, Wal-Mart has 91,000 employees. Every time an
uninsured Wal-Mart worker goes to the ER and can't afford to
pay for treatments, all Floridians are picking up the bill.
Meanwhile, our Medicaid system is in crisis.
As health-care costs explode and job-based coverage
declines across the board, more and more hardworking Americans
are being forced into an already cash-strapped system.
Medicaid costs in Florida, never cheap, have more than doubled
over the past 10 years, from approximately $6 billion in 1995
to more than $14 billion today. To the extent that Medicaid is
in crisis, Wal-Mart is a significant part of the problem.
It might be tempting to dismiss this issue as a larger one
of corporate welfare, or to argue that we're singling out
Wal-Mart unfairly. But facts are facts: Wal-Mart does not just
shift health-care costs onto taxpayers, it does so at a level
well beyond that of any other employer.
Five employers in Florida account for 29,000
Medicaid-eligible individuals (employees or dependents).
Wal-Mart's share represents 42 percent of that group. In
Georgia, children of Wal-Mart employees made up over 10,000 of
those on Georgia's health-care program for uninsured kids, the
PeachCare for Kids program. The next largest employer, Publix,
had only 700.
Wal-Mart sees no problem with this. For evidence, you can
go straight to the top. In a two-day "open house" with the
press at Bentonville, Ark., headquarters earlier this month,
Wal-Mart CEO Lee Scott was asked why so many Wal-Mart
employees are getting their health care from public assistance
programs instead of their employer. Scott said, "In some of
our states, the public program may actually be a better value
- with relatively high income limits to qualify, and low
Government programs are a safety net for low-income
Americans, not a competitor to the largest, most profitable
company in the world. But more importantly, Scott is admitting
that Wal-Mart takes advantage of public health programs for
its own competitive ends: It passes costs onto taxpayers as a
business strategy - not as an unfortunate consequence of some
heretofore unrealized deficiency in its health-care program.
Finally, his response is entirely disingenuous. Scott acts
as though public programs are a better deal for workers, when
really they're simply a better deal for Wal-Mart. It's not
that Wal-Mart can't afford to do better. It's that Wal-Mart
chooses not to.
The Maryland Legislature recently passed a bill that would
make large employers like Wal-Mart pay their fair share. It
would require all companies with 10,000 or more employees to
spend at least 8 percent of their payroll on providing health
care for their workers or to pay into a state health care
But in Maryland, Gov. Robert Ehrlich himself is on the
Wal-Mart dole. He accepted thousands in campaign funds from
Wal-Mart in January, just as Wal-Mart poured $250,000 into the
Florida Republican Party coffers last year.
Call it "hush money": Wal-Mart keeps lining its pockets
with taxpayer money, and the governors agree to keep quiet
about it. It's about time someone stood up to them.