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Wal-Mart's 'Major' Health Care Initiative:Substance Or Style?

Contact:
Nu Wexler,
(202) 557-7461 or
(202) 739-1020

Washington, D.C., Wednesday, September 20, 2006 ­ Tomorrow morning at 9:00 a.m. EDT Wal-Mart will announce what it has billed as a "major health care initiative," at a Tampa, Fla. event with senior executives, elected officials and "other special guests." They'll have a tremendous opportunity to make dramatic changes to their inadequate employee health care plan, a problem that a recent Wal-Mart job posting described as "the biggest single reputation issue Wal-Mart faces."

In May of this year, Wal-Mart Watch proposed "A Handshake With Sam" and called on Wal-Mart to set a national example by ensuring that all employees ­ salaried, hourly, full-time and part-time ­ have quality affordable health care that fully covers their employees and children. Wal-Mart Watch urged Wal-Mart to actively promote full-time employment for its employees and discourage part-time hiring. We're optimistic that Wal-Mart will choose substance over style tomorrow, and announce a plan that lives up to Sam Walton's original ideals for his company.

Additional information on Wal-Mart's health care plan is available below and at http://www.walmartwatch.com/healthcare .

WAL-MART'S HEALTH CARE PLAN: RHETORIC VS. REALITY

RHETORIC: Wal-Mart says it does offer affordable health-insurance coverage for its workers.

REALITY: But Wal-Mart knows that coverage is too expensive for its workforce. A memo written by Susan Chambers, Wal-Mart Executive Vice-President for Benefits, for the Wal-Mart board of directors, said: "[O]ur critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance." [Susan Chambers Memo to the Wal-Mart Board of Directors, http://walmartwatch.com/memo; New York Times, 10/26/05]

 RHETORIC: Wal-Mart says it offers health care plans with low premiums.

REALITY: But according to the Center for a Changing Workforce, in 2003 Wal-Mart employees paid 41 percent of insurance premium costs. At the time of the report, Costco employees paid about 10 percent of premium costs. Nationally, workers today pay an average of 16 percent of premiums for single coverage and 26 percent for family coverage. [Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust; Wal-Mart and Healthcare: Condition Critical, Center for a Changing Workforce, 10/26/05]

 RHETORIC: Wal-Mart says its employees are only slightly more likely to collect Medicaid than average.

REALITY: However, the Susan Chambers memo recognizes that "five percent of our associates are on Medicaid compared to an average for national employers of four percent. Twenty-seven percent of associates' children are on such programs, compared to a national average of twenty-two percent." [Susan Chambers Memo to the Wal-Mart Board of Directors, http://walmartwatch.com/memo; New York Times, 10/26/05]

 RHETORIC: Wal-Mart says it is among a small number of retail employers to offer health coverage to both part-time and full-time employees.

REALITY: But the percentage of associates covered by Wal-Mart health insurance in January 2006 was 46 percent, compared to a national average of 67 percent of workers for large firms who receive health benefits from their employers. [http://www.walmartfacts.com; Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust]

 RHETORIC: Wal-Mart will claim it has more full-time workers than other retailers.

REALITY: But the company's part-time workforce ­ currently around 20 percent of the company's employees ­ is larger than the national retail average. Furthermore, Wal-Mart executives have acknowledged that the retailer will shift to a heavier reliance on part-time workers. A recent JP Morgan report said Wal-Mart plans to increase the ratio of its 1.2 million-member U.S. hourly workforce on part-time schedules to 40 percent from 20 percent. Citigroup analyst Deborah Weinswig predicted that Wal-Mart's proportion of full-time workers is declining, and in a 60-page research report, she predicted that "Wal-Mart will reduce its ratio of full-time workers to 60 percent over the next year or so, with the remaining 40 percent slated for part-time status." [Wall Street Journal, 4/11/06; Associated Press, 5/3/06]

 RHETORIC: Wal-Mart claims it shortened the waiting period for part-time workers to receive health coverage by half.

REALITY: But Wal-Mart has more part-time workers, which lowers the number of employees who are eligible for coverage. Wal-Mart's part-time workforce is larger than the national retail average. Full-time Wal-Mart employees still wait twice as long for health care eligibility compared to the average for the retail industry. Wall Street Journal, 4/11/06; Associated Press, 5/3/06; Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust]

Atlantic Monthly: The New War Over Wal-Mart http://walmartwatch.com/img/documents/AtlanticMonthly.pdf

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David Nassar
Chief of Staff
Wal-Mart Watch
202-557-7459
202-255-5074 (cell)