Term Paper on "Walmart's Healthcare"

Term Paper 5 pages (1467 words) Sources: 5 Style: MLA

[EXCERPT] . . . .

Wal-Mart Healthcare

Wal-Mart currently employs more than 1.7 million people and this is what makes it not only an industry leader but also an economy leader. But its slogan "Always Low Prices. Always" is not necessarily beneficial to its large pool of employees, most of who come from low-income groups. The working class employees suffer from the company's relentless desire to keep the prices low since the high costs of keeping the prices low are crushing their healthcare and other benefits. Wal-Mart has reached its current status as a leading name in discount stores due to relentless adherence to low prices and this is defined as the "Wal-Mart effect." Many believe that while the company is growing, its employee benefits, most notably its healthcare plan is shrinking because of high premiums and deductibles, which keep most of the employees from participating in the plan. (UFCW report)

According to UFCW report, there are some critical flaws in Wal-Mart healthcare, which is leaving more of its employees out of the plan or dependent on government coverage such as Medicaid and Medicare. These are the people who come from the "most vulnerable part of the national labor pool: people who can find only low-paying jobs, who frequently cannot afford health coverage and who have no ability to absorb the kind of bank-breaking inflation in medical costs the country has experienced since the late 1990's." (Abelson, 2005)

Wal-Mart has come under severe criticism for its lack of healthcare responsibility. The company has faced numerous lawsuits and while the low prices motto might work for its business model, it definitely doesn't have a positive impact on company's image. Since big businesses are likely to come under attack every now and then, their policies should be close to perfect and they must understand their social responsibility that includes keeping their employees happy. However that seems to be missing from Wal-Mart's employee policies for the firm is cutting costs on healthcare to maintain its business model. However reducing employee healthcare benefits and raising the premiums have led Wal-Mart into a direct fight with the government. Since the government has to provide healthcare coverage in the absence of adequate employer healthcare plan, government in some states (including Maryland) is pushing big businesses- businesses with more than 10,000 employees- top spend at least 8% of their payroll on healthcare. And Wal-Mart wants its employees to share some of that expense even though most of them can hardly make ends meet.

According to another PBS report, Wal-Mart has claimed that more than 90% of its employees have healthcare insurance. This may be true. But the firm agrees that this coverage doesn't necessarily come from Wal-Mart itself. In an interview with Frontline, Wal-Mart spokeswoman Sarah Clark said that the company insures 500,000 of Wal-Mart's employees. If we compare this figure with the total number of employees, we can see just how small a percentage is totally covered. Clark further added that 29% of Wal-Mart employees are not covered because they were found to be ineligible. Interesting the company fails to mention the reasons behind this ineligibility. The firm has very strict eligibility requirements and only full time workers are covered. Full-time workers are described as those who have worked for six months or more. The high turn over rate has also contributed to the low percentage of employees covered. It is indeed unfortunate that Wal-mart employees have to pay a staggering 33% of their wages to participate in company's healthcare plan. This translates into "$30.50 a month for an individual or between $132.50 and $230.50 a month for families." ("Is Wal-Mart good for America?")

One of the best sources of information on Wal-Mart and the working conditions there is Barbara Ehrenreich's book 'Nickel and Dimed' subtitled on (not) Getting by in America. Ehrenreich was not an ordinary worker but a highly qualified researcher who disguised her true identity to find out the real working conditions in places where people from low-income groups are normally employed. She realized that places like Wal-Mart are "neither free nor in any way democratic"(Ehrenreich, 173). She felt that these places are more like dictatorships where employees were not treated properly and since most of them come from poor families, they do not have much say in corporate policies.

Ehrenreich feels that workers in large corporations like Wal-Mart cannot do much about their condition because these business are too huge… READ MORE

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