Debunking the Wal-Mart Myths #2: Wal-Mart Pays Little or No Benefits

Wal-Mart Myth #2 debunked by Steven Peterson, U of I Research Economist, at the Moscow Chamber of Commerce luncheon last Wednesday.

Charge #2: Wal-Mart Pays Little or No Benefits

Facts:

Competitive medical benefits:75% of Moscow employees are covered directly with medical benefits (which is above the Wal-Mart national average coverage of 48%-55%). Most of the other 25% of Moscow Wal-Mart employees are likely covered on UI policies, spouse policies, or parent policies. In contrast employer based health insurance in the U.S. in 2004 covered only 54% of the U.S. population. Wal-Mart offers medical benefits to part-time workers versus 17% coverage by all firms nationwide.

Wal-Mart’s Competitive Benefit Package is comparable or even superior to the average retail trade firm in Moscow which includes paid vacation, a pension plan, disability insurance, and a variety of other benefits.

Learn more about Wal-Mart benefits here.

Jason Furman's paper “Wal-Mart: A Progressive Success Story” concluded that "Wal-Mart’s health benefits are similar to or better than benefits at comparable employers. Some key comparisons are summarized in Table 2" (click to view larger version).

"Wal-Mart is relatively unusual in that it offers health insurance both to full- and part-time employees...Wal-Mart pays about 70 percent of the cost of health benefits, similar to the retail industry."

What about all those Wal-Mart workers using Medicaid?

Furman states: "In total, as shown in Table 4 (click to view larger version), 5 percent of Wal-Mart employees are on Medicaid, which is similar to the percentage for other large retailers and is comparable to the national average of 4 percent."

"The fact that Wal-Mart employees top the Medicaid rolls in a number of states is simply a reflection of Wal-Mart’s enormous size, not the higher likelihood that its employees will be on Medicaid... For some Wal-Mart employees, Medicaid is the sensible choice...Our fiscal system gives much less of an incentive for low-income employees to get employer provided health insurance..."

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