Wal-Mart’s evil plan

October 26, 2005

Don’t be fooled by the rhetorical crap spewing forth from orificial Wal-Mart sources. While the company publicly claims to have seen the light on environmental issues and has even come out in favor of raising the minimum wage, internal documents reveal the truly sinister nature of the evil behemoth.

The AP reports that Wal-Mart is going green, sorta. Seeking to cut costs and salve a wounded reputation, the retailer will buy trucks that get better mileage and try to make do with less cardboard boxes.

And in a bid to divert attention from the fact that Wal-Mart employees can’t afford basic necessities such as health care and rent, Wal-Mart has generously called for the feds to raise the minimum wage. The company has no plans to increase the wages it pays to its workers.

Wal-Mart Stores Inc. unveiled an environmental plan Tuesday to boost energy efficiency, reduce waste and trim greenhouse gases as part of a wider effort to address issues where it has been pummeled by critics.

Wal-Mart chief executive Lee Scott said even a slight increase in Wal-Mart pay would eliminate a profit margin that generated $10-billion in profits last year.

Scott said the world’s largest retailer had to be a “good steward for the environment” and thought that adopting greener practices would also be good for business by cutting costs.

“We are going to do well by doing good,” he said.

But while Wal-Mart touted its environmental plan, Scott rejected calls to increase workers’ pay that unions and other critics say is often below poverty level. Instead, he urged Congress to look at raising the U.S. minimum hourly wage for the first time since the mid 1990s.

Finally, in a much ballyhooed move, Wal-Mart loudly announced that it was making health care more affordable. Now, Wal-Mart associates need only fork over a sixth or so of their salary to see a doctor.

But wont all of these progressive sounding moves have an impact on Wal-Mart’s huge annual profits? Uh, probably not.

An internal memo sent to Wal-Mart’s board of directors proposes numerous ways to hold down spending on health care and other benefits while seeking to minimize damage to the retailer’s reputation. Among the recommendations are hiring more part-time workers and discouraging unhealthy people from working at Wal-Mart.

In the memorandum, M. Susan Chambers, Wal-Mart’s executive vice president for benefits, also recommends reducing 401(k) contributions and wooing younger, and presumably healthier, workers by offering education benefits. The memo voices concern that workers with seven years’ seniority earn more than workers with one year’s seniority, but are no more productive.

To discourage unhealthy job applicants, Ms. Chambers suggests that Wal-Mart arrange for “all jobs to include some physical activity (e.g., all cashiers do some cart-gathering).”

The memo acknowledged that Wal-Mart, the world’s largest retailer, had to walk a fine line in restraining benefit costs because critics had attacked it for being stingy on wages and health coverage. Ms. Chambers acknowledged that 46 percent of the children of Wal-Mart’s 1.33 million United States employees were uninsured or on Medicaid.

Under fire because less than 45 percent of its workers receive company health insurance, Wal-Mart announced a new plan on Monday that seeks to increase participation by allowing some employees to pay just $11 a month in premiums. Some health experts praised the plan for making coverage more affordable, but others criticized it, noting that full-time Wal-Mart employees, who earn on average around $17,500 a year, could face out-of-pocket expenses of $2,500 a year or more.

Ms. Chambers proposed that employees pay more for their spouses’ health insurance. She called for cutting 401(k) contributions to 3 percent of wages from 4 percent and cutting company-paid life insurance policies to $12,000 from the current level, equal to an employee’s annual earnings.

Ms. Chambers’s memo voiced concern that workers were staying with the company longer, pushing up wage costs, although she stopped short of calling for efforts to push out more senior workers.

She wrote that “the cost of an associate with seven years of tenure is almost 55 percent more than the cost of an associate with one year of tenure, yet there is no difference in his or her productivity. Moreover, because we pay an associate more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart.”

The memo noted that Wal-Mart workers “are getting sicker than the national population, particularly in obesity-related diseases,” including diabetes and coronary artery disease. The memo said Wal-Mart workers tended to overuse emergency rooms and underuse prescriptions and doctor visits, perhaps from previous experience with Medicaid.

The memo noted, “The least healthy, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart.”

The memo proposed incorporating physical activity in all jobs and promoting health savings accounts. Such accounts are financed with pretax dollars and allow workers to divert their contributions into retirement savings if they are not all spent on health care. Health experts say these accounts will be more attractive to younger, healthier workers.

“It will be far easier to attract and retain a healthier work force than it will be to change behavior in an existing one,” the memo said. “These moves would also dissuade unhealthy people from coming to work at Wal-Mart.”

Ron Pollack, executive director of Families U.S.A., a health care consumer-advocacy group, criticized the memo for recommending that more workers move into health plans with high deductibles.

“Their people are paying a very substantial portion of their earnings out of pocket for health care,” he said. “These plans will cause these workers and their families to defer or refrain from getting needed care.”

One Response to Wal-Mart’s evil plan

  1. Peter on October 28, 2005 at 9:14 am

    I posted on this this morning:

    Memo on how to Save Money: Discriminate



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