Welfare and Health Policies- WalMart - Case Study Example

Welfare and Health policies- Wal-Mart “Of all the form of injustice occurs, the inequality in health care is most shocking and most inhumane – Martin Luther King Jr.” What is Wal-Mart: Wal-Mart is an American public corporation founded by Sam Walton in the year 1962 and 10 years later in 1972 was incorporated in New York Stock Exchange. It is considered as the largest retailer and largest company in the world based on its revenue. It is the largest grocery retailer in US, spreading also its roots into consumables business and toys retailing, still standing out as largest private employer in US. Internationally apart from many places in US Wal-Mart has its branches and franchise all over the world as Mexico, Canada, Japan, Argentina, brazil, UK, south America and Germany with negotiations ongoing in India. Wal-Mart’s business model is to sell wide variety of merchandise in cheap rate and the company refers to its members as associates. Wal-Mart is governed by a board of 13 members with H. Lee Scott as its executive manager. (1, 2, 3, 4) Wal -Mart and the Labour Union: Wal-Mart is being criticized on regards of its policies and business practices mainly by community group, grass root organization, labor union and religious organization. The issues aroused by them are in regard to its employee and work force relation. The issues involve low wages, poor working condition, and mainly inadequate health care policy and on companies anti – union policy. The complains of union about the Wal- Mart is that, Substantial number of Wal –Mart associates earn below the poverty line and they are not enough to support their family and the increase in wages woulds cost Wal – Mart only little. They force employee to work off the clock violating The Fair Labor Standards. The most important is the Wal-Mart’s health care policy. 1. Wal-Mart’s health care plan is found to have failed to cover over 57% of its employees 2. Its health insurance falls short of other large companies, who cover a minimum of 66% of their employees. 3. the eligibility of employees for health care insurance is limited, as person who works less than 34 hrs a week has to wait for a year and spouses of part time employees are not eligible for coverage 4. Health care plans are too costly for the employees, with an average employee has to spend close to 7 to 25 % of their income. 5. Wal –Mart aggress that public health care is better with relatively high income limits and low premium. 6. Wal- Mart is accused of costlier health care , falling much below industry standards and way behind the competitors with one out of six employee doesn’t have health care coverage. It is still warily accused that Wal- Mart spends more money on publicity than on healthy care. The unions have formed many organizations as Wake up Wal – Mart and Wal –Mart watch to launch campaigns against wal-marts, with the documentary relaeased in 2005 The high cost of low price being a noted out cry against Wal-Mart. (5,6,7,8,9,10) Opposition of Wal-Mart in New york and related issues: The issue’s that have been raged against Wal-Mart came to lime light with the interview given to The New York times by Wal- Mart CEO Lee Scott in march 2007, with his famous remark as “fuhgeddaboudit. “ in mounting exasperation, in a gesture of accepting the defeat. The Wal-mart has been trying hard to break into New york city that has the largest percentage of consumers in whole of America. This was much due to the opposition led by unions and organized labor rising their fear strongly against the retailers that their low price and modest wages will undercut the unionized stores. Wal-mart which has nearly 400 stores in US ,sought to open stores in Rego park, Queens island and New York city starting from Manhattan, which plans fell due to intense union and community opposition. Due to the stout resistance faced Wal-Mart has retracted from Manhattan in response to which Ed Ott executive director of New York city central labor council said that they have great super market and retail outlets in New York and they don’t need Wal- mart. Mr. Scotts remark was latter amended by his personal secretary Ms. Williams that it was Scott’s personal opinion and getting in NY may be difficult but is worth it.(11,12,13,14) Now to understand our opposition to Wal –Mart’s health care policy that has been explained earlier it becomes important to know about the US health care system and its features in comparison to other countries health care system as Europe. Health care system in US and in other countries: Health care system can be defined as an organization that provides health care. Generally there is five methods of funding for health care system, mainly direct payment, general taxation, as social health insurance, private health insurance and as donation from community. In the health care around the world, it is widely preferred by people for governments intervention or regulation, as the health care treatment is basic right of human regardless of his economic affordability health care professionals are bound by the law and To help people who cannot choose competing health care in terms of emergency. When discussed about the health care models , purely private enterprise of health care is comparatively rare. If exist it is usually for the wealthy people in poor nations. Other major models include Social security health care model where workers and families are insured by state, publicly funded health care model where residents are insured by the state, social health insurance, entire population under the insurance of Health Insurance Company. In most of the countries both private and public health care system run in parallel as two tier system. United States: It is the only developed nation that doesn’t have a universal health care system, but they have significantly public funded components. As Medicare for elderly and Medicaid funded by tax coverage’s, that provide coverage to low income and disabled group. The department of veteran affairs provides health care to military veterans, with their network of hospitals. But in America now a growing number of populations is unable to obtain healthy care through their employers or are incapable of individual coverage. Currently, 17% of population is uninsured owing to the increased cost of insurance and medicines. Thus in US health care provision is of reimbursement type or of general liability. Other countries Australia has a Medicare that exist along with private health system , which is funded by income tax levy and general revenue. Its highlight is levy of 1% tax on high income group without private insurance. They also have pharmaceutical benefit plan that greatly reduces the drug price. Canada follows a single payer system with the payment to doctors for the service provided is done by government. In France doctors are part of both public and private practice. They also have separate social security organization that has separate funding and coverage. Supplemental coverage by private institutions are given. Now universal health care for all is provided. Germany has both public and private insurance existing in equal strength. In Sweden public funded insurance is mandatory UK has the famous NHS that provide free health care to all citizens os UK, that is amended time to time, with its funding is by health insurance tax and general tax. (15,16,17) Thus it can be seen that mostly only in US the nation and not the employers carry the burden of health insurance unlike other countries. it is the country with expensive health care and is the system where health care is not available for all. The Wal-marts internal memo and union’s reactions: The issue flamed out grabbing public attention, when internal memo written by Susan chambers, the executive vice president written to board of directors for effective cost management was released in the printing media. The memorandum suggests way to hold down the spending on health care and other benefits while seeking to minimize tarnishing to the public image of retailers. The bold steps by her suggest, Wooing in healthy and young workers than 7 year service member whose productivity is less Discourage unhealthy applicants and include physical work in all job category Introduce health clinic in store to reduce costly emergency room visit by employees Employees staying for more time increasing wage cost, to reduce which, seniors are to be moved out. Moving the associates to consumer driven health plan to control cost thus leaving the accounts to be build by the associate Restructure the retirement scheme Improve Wal-marts communication of better health care offering. This Ms Susan chambers describes in an interview as it is not cutting but redirect saving to another part of benefit plan. I oppose this as we all know that already Wal-mart is known for the meager spending on health care for employees, as reviewed under the Wal-mart and labor union. It could also been seen the employees children and spouse as close as 1.6 million are under the country’s social coverage and as the company doesn’t sponsor and the employee is unable to pay for the coverage, adding burden to tax payers. The added suggestion by Susan of filtering out un healthy applicants shows their mind level exactly. She has also proposed employees spouse and child coverage , by cutting in their wages. Even without this we know that fewer than half of Wal-Mart workers have health coverage on the job as reported by an AFL-CIO report. It is also known that many full-time Wal-Mart employees are unable to afford the company’s health coverage. Nearly 46 million Americans were uninsured in 2004—up 6 million since 2000, according to a study by the Economic Policy Institute (EPI). Nearly 3.7 million fewer people had employer-provided insurance in 2004 than in 2000, the study found. (18,19,20,21) Thus I feel that Wal-mart is more interested in patching its tarnished public image rather than improving employee’s health care. Reference: 1. Biesada, Alex. "Wal-Mart Stores, Inc." Hoover's. Retrieved on October 13, 2006. 2. Staff Writer. "Fortune 500." CNN/Fortune. April 16, 2007. Retrieved on April 16, 2007. 3. Wal-Mart Corporate FactsPDF (48.7 KiB)." Wal-Mart. Retrieved on August 12, 2006 4. ."Wal-Mart Reports Third Quarter Sales and Earnings." Wal-Mart. November 14, 2006. Retrieved on November 14, 2006. 5. Kabel, Marcus. "Wal-Mart, Critics Slam Each Other on Web." Washington Post. July 18, 2006. Retrieved on July 31, 2006. 6. "walmartfacts.com (official public relations website)." Wal-Mart. Retrieved on August 1, 2006. 7. Store Wars: When Wal-Mart Comes to Town." PBS. Retrieved on February 24, 2007. 8. Bernstein, Aaron. "A Stepped-Up Assault on Wal-Mart." Business Week. October 20, 2005. Retrieved on February 24, 2007. 9. Abelson, Reed. "States Are Battling Against Wal-Mart Over Health Care." New York Times. November 1, 2004. 10. Wysocki, Bernard, Jr.; Zimmerman, Ann. "Wal-Mart Cost-Cutting Finds Big Target in Health Benefits." Wall Street Journal. September 30, 2003. Retrieved on February 23, 2007. 11. Bucher, Susan. "Wal-Mart: the $288 billion welfare queen." Tallahassee Democrat. April 19, 2005. Retrieved on February 24, 2007. 12. Leonard, Andrew. "How the World Works: Our right to know about Wal-Mart." Salon.com. January 23, 2006. Retrieved on February 24, 2007. 13. Staff Writer. "Wal-Mart memo: Unhealthy need not apply." CNN. October 26, 2005. Retrieved on February 24, 2007 14. "Wal-Mart's Position on Unions (For U.S. Operations Only)." Wal-Mart. October 31, 2006. Retrieved on March 2, 2007 15. Boston.comWal-Mart's healthcare policy rapped Kennedy wants public aid listed by Bloomberg News  |  June 23, 2005 16. Eldis.com. "Social Health Insurance." Retrieved August 18, 2006. 17. World Health Organization. "Regional Overview of Social Health Insurance in South-East Asia:OVERVIEW OF HEALTH CARE FINANCING". Retrieved August 18, 2006. 18. http://www.va.gov/healtheligibility/eligibility/epg_all.asp 19. About.com's Pros & Cons of Massachusetts' Mandatory Health Insurance Program 20. http://money.cnn.com/2007/03/28/news/companies/walmart_newyork/index.htmWal-Mart CEO gives up NYC dream - reportLee Scott, frustrated at retail giant's inability to set up shop in NYC, says he 'doesn't care' if Wal-Mart ever makes it there.March 28 2007: 8:07 AM EDT 21. Newyorktimes, Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs By STEVEN GREENHOUSE, and MICHAEL BARBARO Published: October 26, 2005 http://www.wakeupwalmart.com/feature/memo/ Read More