Wal-Mart reports record-breaking profits each year. There seems to be a store on every corner, forcing small businesses to close their doors. Wal-Mart is synonymous with greed, and is now seeking even greater profits by removing health care for some employees.
Wal-Mart cites ‘rising health care costs’ in its decision to stop providing benefits for some of its part-time employees in the United States. Beginning on January 1st, employees working less than 30 hours per week will no longer be covered by the retail giant. This decision will affect more than 30,000 employees. They will also be raising the premiums employees pay by nearly three dollars and fifty cents per pay period. In addition their portion of medical expense co-pay will drop from 80 percent to 75 percent.
A Wal-Mart spokesman blamed the Affordable Care Act; a larger number of their employees than expected signed up for their health insurance program when the act was rolled out.
Wal-Mart’s profits in 2013 exceeded 17 billion dollars. An article in Fortune Magazine suggests that not only can they afford to pay health care, they can also afford to increase their employees pay by 50 percent.
At the same time they are reducing health care benefits for their employees, Wal-Mart is becoming more involved in the health care industry. Partnering with DirectHealth.com they will offer health care plans in 2,700 of their 4,311 United States stores. The plan will be call ‘Healthcare Begins Here.’
In a statement to the press, Labeed Diab, president of health and wellness for Wal-Mart in the U.S., said that the company will strive to be the largest health care provider in the nation. He added that it would enhance their ‘one-stop shop’ efforts.
Wal-Mart also announced another plan to offer low cost banking service to 54,000 residents of the state of Iowa. They said they will become an alternative to the costly check cashing services.
There have been several displays of anger over the wages Wal-Mart pays its employees.
When one of their executives was speaking at a Goldman Sachs investor conference in September, he boasted that 475,000 Wal-Mart employees make more than $25,000 a year. What that means is most of the giant’s 1.4 million workers make less.
A protest last week outside of a California Wal-Mart resulted in 50 arrests.
The only group resisting a wage increase for Wal-Mart employees is Wal-Mart executives. Their investors have no opposition to the idea. In fact, many of the shareholders believe that increasing wages would increase morale and therefore customer service.
Wal-Mart’s stock price is around $79 a share. Investors average a 20 percent dividend each year. Last quarter alone Wal-Mart’s gross profit was $28.7 billion. Out of that figure they have to pay employees, bondholders and stockholders. Not only can they afford to increase the wages of their employees, the raise could be as high as 50 percent. It is very unlikely a figure close to that will happen; Wal-Mart is synonymous with greed.
Although many Wal-Mart employees make an effort to provide good customer service, others appear unhappy with their jobs and their employer. Paying them a livable wage might put smiles on their faces.
Des Moines Register
The Boston Globe