Whitewashing Wal-Mart

This story in the Sacramento Bee today hails the arrival of Wal-Mart’s $4-a-prescription that “sets the stage for a generic drug price war in the state” listing other retail giants, such as Target and Raley’s who are poised to meet their low prices.

To parade Wal-Mart as the Pied Piper of cheaper drug prices, when the Wal-Mart is the beacon for what is wrong with corporate health practices in America, is completely absurd.

Legislation to enact “fair share” benefits were inspired by the company, which has among the most abominable practices in the U.S.

Wal-Mart:

  • Insures fewer than half (46%) of its employees.
  • Carries only high-deductible plans — $1,000 for an individual and $3,000 for a family.
  • Pays low wages — an average $10.50 wage (in California).
  • Imposes a six-month waiting period for full-time employees to become eligible for benefits. (Most large businesses have a three-month wait.)

Wal-Mart’s stingy benefits has already inspired Target to follow suit earlier this year. Other large employers are also eyeing high-deductible plans, in what my colleague, Beth Capell calls “a race to the bottom.”

In this paper from the UC Berkeley Labor Center, Wal-Mart workers who enroll in public assistance programs cost California taxpayers $86 million annually. The report also says that “if other large California retailers adopted Wal-Mart’s wage and benefits standards, it would cost taxpayers an additional $410 million a year in public assistance to employees.”

It doesn’t have to be that way. Costco, another large discount retailer, provides health insurance to more than 80% of its employees and has a three-month waiting period. Employees have a choice between a traditional managed care plan and “freedom of choice plan.”

The practice, unfortunately, does ding Costco on Wall Street.

Health Access California promotes quality, affordable health care for all Californians.

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