Politics from the Palouse to Puget Sound

Sunday, April 29, 2007

Co-Opted Out of a Living Wage

The liberal chic place to shop on the Palouse is the Moscow Food Co-Op. Among the elitist denizens who you'll find browsing down the organic, fair trade aisles at the Co-Op are members of No SuperWalMart and PARD.

One of the monotonous left-wing canards offered against Wal-Mart by its fanatical haters is that Wal-Mart fails to pay its employees a so-called "living wage."

The Penn State University Living Wage Calculator figures a living wage for one adult with one child in Moscow to be $12.33 an hour. The City of Moscow established a "living wage" last year of $10.00 an hour for all businesses that conduct business with the city.

That's why this admission from Co-Op board member Bill London last week was a bit startling:
Most starting jobs (after training) at the Co-op pay from $7.25 to $8.75 per hour. A very few lowest-rung jobs do begin at $6.75.

Benefits to workers of 20 hours/week or more includes:
2 week paid vacation
sick leave
18% discount on purchases and free lunch
Benefits to workers of 30 hours/week or more includes those plus health/dental insurance (retirement benefits if work longer than 2 years)
$7.25 to $8.75 an hour? A starting wage of $6.75? Wal-Mart in Moscow pays $8.50 to $10.00 an hour, with a starting wage of $7.25. The Wal-Mart medical benefits plan is open to all part time workers, regardless of hours worked, after one year of service, and all other Wal-Mart benefits are much more generous than the Co-Op.

One could hope that the Co-Op might be an oasis of sanity, where socialist rhetoric meets capitalist reality, or where the realization could sink in that stocking shelves or working a cash register are never going to be high-paying careers. One could hope. Instead, anyone think it's time for a petition?

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Nic said...

Maybe that's all the Co-Op can afford to pay, whereas Walmart could afford quite a bit more. It would be different if the Co-Op had the profitability of Walmart, but until then, or until I hear otherwise, I'll assume they are doing what they can to compensate the people they employ.

Tom Forbes said...

That is yet another myth, that shows no understanding of economics. I quote now from "Wal-Mart: A Progressive Success Story" by Jason Furman:

"Implicit in much of the criticism of Wal-Mart is the belief that the company has enormous resources and could easily pay higher wages or more benefits without making a major sacrifice. After all, Wal-Mart’s mind-boggling $10 billion in profits last year make it appear as if the company could wave a wand and do anything it wants. But Wal-Mart also has a staggering 1.3 million American employees, multiplying the costs of even a modest change in compensation.

Overall, it is no easier for Wal-Mart to change compensation than many other companies. This year Wal-Mart will earn about $6,000 per employee. This is virtually identical to the average for the retail sector and somewhat below the national average of $9,000 in profits per employee in the corporate sector. Some companies make substantially more, like Microsoft ($143,000 per employee) or General Motors ($12,000 per employee). Overall, it is not much easier for Wal-Mart to change compensation than, say, a small business making $24,000 a year and employing four people.

If Microsoft paid each of its employees an additional $5,000 or expanded its health benefits, its profits would be largely unchanged. If Wal-Mart took the same step – and did not pass the cost on to consumers – it would be virtually wiped out.

In the last fiscal year, Wal-Mart had revenues of $288 billion and costs (including taxes and other charges) of $277 billion – a razor-thin profit margin of 3.7 percent of revenues. Even a very small increase in its costs, without a corresponding increase in revenues, would wipe Wal-Mart’s profits out entirely."

I would wager that the Co-Op's profit margins are higher than Wal-Mart's and hence THEY are the ones who could afford to pay better.

Must we always accept the obvious from the left, without fact-checking?

Barenjager said...

So, it's ok to underpay your employees, fail to provide benefits and overcharge customers if you align yourself with the self image of the community of liberal elitists but you are a pariah if you provide jobs and benefits to anyone who will take them and charge a fair price to all who come.

Now that's what I call chutzpah!

Sarcastic Housewife #1 said...

Mr. Pot may I introduce you to Mr. Kettle. Geez....

Paul E. Zimmerman, M.A. said...

SH1 -

Only if Mr. Pot is purchased from a politically correct retailer. :)

Truth said...

"If Microsoft paid each of its employees an additional $5,000 or expanded its health benefits, its profits would be largely unchanged. If Wal-Mart took the same step – and did not pass the cost on to consumers – it would be virtually wiped out."

If by "wiped out" you mean that its profits for last year would have dropped from $11 billion to a measley $4.5 billion then yes, wiped out it would have been. (Thats its 1.3 million workers were paid $5,000 more a year)

"In the last fiscal year, Wal-Mart had revenues of $288 billion and costs (including taxes and other charges) of $277 billion – a razor-thin profit margin of 3.7 percent of revenues."

Gotta love statistics, you can prove everything with them. For example, you can make an $11 billion profit seem so very small.

"The Wal-Mart medical benefits plan is open to all part time workers, regardless of hours worked, after one year of service"

And yet for some reason plenty of people seem to feel that Wal-Mart's health plans are detrimental not only to the workers but also to the community. For example the following article


I find 2 things from this article that are particularly interesting. The first is that unlike other companies which have problems, Wal-Mart's employees are already paying a very high percentage of their income towards health care. The second interesting thing is that Wal-Mart, not Starbucks or GM which are also mentioned in this article, is the company with the bad reputation, a trend which seems to follow the company. Now I'm not saying we should ban Wal-Mart from our communities, but at the same time I think there are valid criticisms of them as a company which have yet to be addressed.

Nic said...

Tom, fair enough, good information... the food is still better at the co-op though.

Barenjager said...


I want to understand WHY someone would continue to fight a lost fight in the face of overwhelming evidence their neighbors don't want them to fight. Why someone would continue to shill for the unions who do nothing but bilk their members, hoodwink the public and extort from employers and why someone would feel good about themselves for not understanding that's what they are doing.

Please enlighten us.

Barenjager said...

To all who love the coop and hate Wal-Mart,
Who the heck cares what the coop can afford to pay? In this perfect world you should be willing to pay the pass through cost of providing their employees benefits and living wages. What's that you say? You won't pay that outrageous amount? YOU ARE THE REASON WAL MART EXISTS.

Get a life and get to know Adam Smith. That's what makes the world go 'round.

Tom Forbes said...

A couple of quotes for you "Truth,"

First, from "Moscow at a Tipping Point," about the New York Times article you mention:

A close examination of the entire memo gives quite a different impression than reported in the press (as seen above). Wal-Mart is clearly grappling with health care costs that were reported as rising at 15% per year which was “significantly” faster than sales. Health care costs as a percent of total sales rose from 1.5% to 1.9% in three years. These growth rates are not sustainable, not only for Wal-Mart, but for firms throughout the U.S. and will require painful choices for everyone -- employee and employer.

What is usually not reported is that Wal-Mart’s health care and benefit package is comparable to the typical firm in the retail trade sector. Instead Wal-Mart’s health care plan is often compared to Microsoft, General Motors, or other high end manufacturing firms.

Now another from Jason Furman's paper again:

For some Wal-Mart employees, Medicaid is the sensible choice. A family policy costs $1,800 annually for a Wal-Mart worker, similar to the cost for other retailers. A Medicaid eligible worker has the choice of taking home an additional $1,800 in take-home pay and being insured through Medicaid or taking home less pay and instead getting Wal-Mart’s insurance. The beneficiary of choosing Medicaid is the worker – who gets to keep an additional $1,800 – not Wal-Mart (see the further discussion of this issue below).

Wal-Mart – like every other business – is interested in paying the lowest possible total compensation (wages and benefits) consistent with recruiting, motivating and retaining a qualified workforce. As a corporation, it does not fundamentally care whether this cost is in the form of wages or benefits.

Its workers, however, do care. The notorious Wal-Mart benefits memo, which was not meant for public release and thus can be trusted as a candid assessment, reports that, “Our benefits offering played a key role in attracting just 3 percent of our Associates. Moreover, satisfaction with benefits does not correlate with satisfaction with Wal-Mart.” Wal-Mart workers, like other workers in the retail sector, are paid less than the economywide average wage. They have to pay for food, housing, transportation and numerous other costs. It is not surprising that in a choice-based system they would choose to get more money in the form of wages and less in the form of health benefits.

Moreover, our fiscal system gives much less of an incentive for low-income employees to get employer provided health insurance. High-income employees face a lower marginal tax rate on health benefits than wages. For low-income employees it can be the exact opposite.

Consider a company that wants to compensate a woman in the 25 percent bracket with an additional $3,000. If she chooses to get it in the form of wages, she will pay 25 percent in taxes and keep the remaining $2,250. If she chooses to get it in the form of better health benefits, she will get a $3,000 policy. Compare that to a low-income mother. She is in the 0 percent tax bracket so she would keep the entire $3,000 if she gets wages. But if she gets the $3,000 in the form of health benefits, she will lose her Medicaid. This is like a large effective tax on the provision of benefits.

This is what I find so ironic about all the Wal-Mart "corporate welfare" arguments. You "progressives" demand more and more Medicaid benefits (e.g. the expansion of Medicaid to cover more Washington children that was passed by the Legislature in Olympia this year), but then you turn right around and act shocked and disgusted when any of those people who might happen to work at Wal-Mart take advantage of the free health care. You can't have it both ways.

When you are no longer covered by student health or your mom and dad's medical insurance, you too will be faced with "hard choices" about health care. Even better, one day, you may open a business of your own and have to provide medical benefits for your employees. Come back and talk to me about it then.

Truth said...

Barenjager, you're wild statements don't do anybody any good. To say that unions don't do any good holds the same factual basis as saying they do only good. Perhaps you could move past your divisive rhetoric and into actual discussion.

Tom you do raise a number of good points. To your points on Medicare I will tell you that the biggest problem I have with Wal-Mart on their healthcare is that people do choose Medicare over the company-provided plans. I do fully support extending Medicare to children who otherwise wouldnt have health insurance, and I am alright with people taking it over Wal-Marts plan, I dont want to be the one stopping them. What I see is a problem is that by not offering a health care plan which not only offers quality benefits and is cheap Wal-Mart fairly openly encourages people to switch to Medicare. As a result, Wal-Mart does save money by not having to pay for the health care, and instead passes the cost on to tax payers. As a result Medicare is just as bad, if not worse, as Social Security and Medicaid are, and that fact that Wal-Mart's policies continue to encourage people to switch to Medicaid isnt helping this.

However, I do think there is something which is more important in this memo and the entire healthcare debate, and that is that we need to do more to provide cheap and affordable healthcare to every person. Sadly for both parties this requires more than tort reform or negotiating with drug companies, instead we need to find an innovative solution to the larger problem behind the Wal-Mart health care debate.

Paul E. Zimmerman, M.A. said...

More up-to-date info on Walmart health benefits:


I'd love to see how Walmart's industry peers compare.

Tom Forbes said...

"What I see is a problem is that by not offering a health care plan which not only offers quality benefits and is cheap Wal-Mart fairly openly encourages people to switch to Medicare. As a result, Wal-Mart does save money by not having to pay for the health care, and instead passes the cost on to tax payers. As a result Medicare is just as bad, if not worse, as Social Security and Medicaid are, and that fact that Wal-Mart's policies continue to encourage people to switch to Medicaid isnt helping this."

Did you even read what Jason Furman wrote? Wal-Mart (or any other employer for that matter) is only prepared to offer so much in total compensation, be that wages or benefits. THERE IS NO SUCH THING AS QUALITY LOW COST HEALTH CARE. Therefore, EMPLOYEES make the decision to take wages over health care It is the GOVERNMENT that encourages this by making Medicaid available, not Wal-Mart. It's a free market for insurance, and the government's insurance wins because it's free. Is that a surprise?

You make absurdly unfounded statements. Provide just ONE fact to back up your claims. If you want "taxpayers to save money" so badly. then get rid of Medicaid.

And you still haven't answered my question. Who pays your medical insurance? Then answer me another question. Your tuition money goes to WSU. Why don't you ask the WSU Office of Human Resources what the medical benefits plan is for WSU employees who work part time (less than 20 hours a week)?

Truth said...

"THERE IS NO SUCH THING AS QUALITY LOW COST HEALTH CARE. Therefore, EMPLOYEES make the decision to take wages over health care It is the GOVERNMENT that encourages this by making Medicaid available, not Wal-Mart. It's a free market for insurance, and the government's insurance wins because it's free. Is that a surprise?"

So what you're telling me is you are fine with Wal-Mart's healthcare plan being so bad that people would rather be on a federal program then they would pay a little for superior healthcare? And as I already pointed out, Wal-Mart is currently able to offer better health care, to the tune of about $5,000 per employee and still make a quite respectable $4.5 billion in profit.

But here, if you want some facts, how about these from the article I posted about

"Perhaps the most unflattering element is the statistic that nearly half of the children of Wal-Mart employees are uninsured or on Medicaid, the federal and state insurance program for the poor. For the nation's overall labor force, that portion is one-third, according to Wal-Mart."

"it [the memo] also recommends a wide-ranging set of initiatives to control costs, including one controversial proposal aimed at recruiting what the memo describes as "a healthier, more productive work force."

For some reason this statement seems to encourage discriminatory hiring practices, but hey, whats a little illegality.

And you know what, in a perfect world I would like to get rid of Medicaid...assuming private companies were willing to step up and accept some responsibility (and not just Wal-Mart but a whole host of companies), but they don't. Where I see Wal-Mart's responsibility is in becoming an industry leader in healthcare (like costco has), and shaming other companies into a similar plan, as opposed the idea they have now of offering health care plans which basically encourage their workers to get medicaid.

Paul, the link you gave didn't work, but regardless in furture discussions could we try not to get information from biased sources (walmartfacts.com is no less biased than walmartwatch.com, they both have agendas which is why I've avoided both).

But Tom, as for your request of facts try some of the articles below, I've tried to find fairly non-biased ones, and while the second one doesn't give Wal-Mart much of a chance to defend itself most of it looks like regurgetating numbers from a state analysis.



Oh yes, and to your final point Tom, I am under my parents insurance...so what? The fact that you pay for your own insurance doesnt make you any more or less correct than me on this issue, especially since we are mainly debating our opinions and finding facts which support those opinions. For example I know that healthcare prices are going through the roof, regardless of whether I personally have to pay for those costs or not (much in the same way we can know the holocaust existed or there is genocide in Darfur without having directly experienced either).

Tom Forbes said...

Are you so obtuse that you don't get it? Wal-Mart HAS a good health plan. It's just not free like Medicaid. If you qualified for free health care, would you pay to get the same coverage from your employer?

There's a fact your "unbiased sources" ignore. For example, did you know that 30% of Wal-Mart's associates join with no health coverage at all. 7% are on Medicaid when they start working at Wal-Mart. Only 3% remain on Medicaid after two years of employment. Would you prefer that these people remain unemployed and using Medicaid or profitably employed and improving themselves and still using Medicaid?

As for your "unbiased" Seattle Times, they forgot to include some important info on who uses Medicaid that made it into the Lewiston Tribune



If you want Wal-Mart to set the example, don't you think the government should start first? After all, they have far more employees in Washington than Wal-Mart does.

You didn't answer my question, so I'll answer it for you. WSU does not provide health care benfits for employees working less than 20 hours a week. Wal-Mart does. Are you "fine" with that? Maybe you are also "fine" with the recent 13% increase that students and faculty have to pay for child care at the WSU Children's Center? Why, WSU is spending millions remodeling the CUB and Martin Stadium, not to mention building a new biosciences building. Certainly they could afford better health care and lower child care costs.

You see, there's "outrage" everywhere you want to look. The world is not fair. The fact that you are on your parents insurance is completely relevant. You have no experience of the real world, only the mush that your left-wing professors have filled your head with. If you did, you would understand there is no such thing as a perfect employer. You would understand that every company these days encourages healthy living to minimize healthcare costs. You would understand that the marketplace is free and that no one puts a gun to anyone's head forcing them to work anywhere. You wold understand that if you liked Costco's benfits better, you could try to work there. You would understand that if you couldn't work at Costco, Wal-Mart may not be a bad alternative.

You are right about one thing. We have a health care crisis. How does blaming Wal-Mart help? It is simply bait-and-switch. The Democrats engage in these shenanigans to distract voters into thinking they are actually doing something about health care. They are also serving the union's purposes as well. Because don't fool yourself, the war on Wal-Mart is being led and funded by labor unions who could care less about health care costs, only the dues they want to collect from Wal-Mart's 1.9 million employees.

Barenjager said...

You are off base and trying to avoid the point, as usual. Try this, just for fun.

Provide two examples of benefits trade unions have provided to the overall US economy and the standard of living for their members in the past 10 years.

I'll ante up two examples of detrimental behavior on the part of unions.

1. Pay, pensions and benefits for unskilled workers in the automobile assembyl sector. These have been driven WAY out of proportion to the effort and skill provided by the employees and have directly lead to the decline of manufacturing in the US.

2. Educational performance. Unionized teachers are less productive, less innovative and less engaged (taken as a whole) than their non-union counterparts and they shortchange their students.

As you may have gathered, I belive unions are some of the most corrupt and detrimental organizations on the face of the planet. They are a blight on the US economy and their roles are filled with lazy, dull, underperforming, greedy, malcontent, worthless oxygen thieves who I wouldn't urinate upon if they were on fire.

Only politicians are of weaker character and lower performance in my estimation....Well, perhaps them and certain exploitive "religious leaders."

Paul E. Zimmerman, M.A. said...


The link does work. If your browser allows you to drag and expand the comment window, a "pdf" will magically appear at the end of the link (which is exactly what I did to follow the links you recently posted). If not, simply add it in. The document is an interesting read; it's an accounting of who is on what sort of insurance while working for Walmart. It really would still be very telling to see how Walmart's benefits stack up against its industry peers. (Or maybe we'll compare it to WSU, as Tom has done; why limit ourselves to retail? Bravo, Tom!)

It's interesting that you already know that what is behind that link is "biased" information without even reading it (apparently), while only offering the Seattle Times and PBS as evidence for your own claims. There's also a significant recurrent theme in both of your sources that leads to them being trumped by the pdf document I've linked to:

Seattle Times: "Jennifer Holder, a regional spokeswoman for Wal-Mart, said the figures used in the analysis are outdated and probably flawed. She said the company has "significantly" improved its health plans since 2004." (Also, this Seattle Times article was itself written in Feb. 2006 - old);

PBS: "A November 2004 New York Times article cites a study in Georgia that found 10,000 children of Wal-Mart employees were in the state's healthcare program..." (No telling when this page was authored, as no date is given for the piece).

Your evidence is old info in both cases and, most pertinent to this subject from the PBS page, your information is such trustworthy things like a citation OF a citation that first ran in a leftist newspaper. What I've posted is current, and since it comes direct from Walmart - a publicly traded company - they have a lot on the line in terms of what can happen if they provide bad information to the public (to investors). This automatically builds into the information they put out a high degree of certainty as to the truthfulness of the it, especially so when compared to that produced by third parties who are without nearly as much exposure to risk of this sort, such as your "sources" (not to mention them having an apparent agenda against the corporation).

In future discussions, can you try to not rely on outdated information to make your arguments? After all, that is indicative of bias, which you have repeatedly claimed you strive to avoid.

Barenjager said...

Truth, et. al.
I am biased and I admit it. I'm not some politically correct pansy that feigns neutrality while masking his prejudices. If you are honest with yourself, you will see that humans can not thrive without their prejudices. It's what keeps us from harm as we learn to recognize danger. It's what keeps us from wasting our time on repeatedly making the same mistakes. It's called "learning."

That's not to say that irrational prejudices are acceptable. They aren't. Prejudices borrowed from others (e.g. racism based upon societal influence) are unacceptable.

In my experience those who aren't honest enough to admit and deal with this human trait in themselves tend to be snobbish pseudoliberals who are too smug and self satisfied to really help their fellow man. They're far too busy pursuing feel good causes and having their ego stroked.

That said, I dislike and am prejudiced against anyone who would screw up the security I have worked so hard to secure for the country, and for me and my family. As you can see, I feel US trade unions are among those who threaten our security.

Truth said...

Paul, you are correct the link does work, it just happened that when I opened up the comment window it cut off part of the address, sorry.

Now going down the responses I have gotten in order...

First Tom, in response to your rant on how I clearly have no life experience since I am still on my parents health care plan, what makes you so knowledgable. For starters have you ever worked at Wal-Mart, or since this is such a big issue with my sources, have you worked at one recently. Or are you appying the knowledge you've gotten at other employers to Wal-Mart, because thats exactly the same thing I am doing. Of course there's no such thing as a perfect employer and the fact that you try and put words in my mouth to make my point seem less valid is insulting. Also, in response to your statement that WSU doesn't provide health care to those who work 20 hours a week I'm curious if that is the same in Wal-Mart and other retail stores because the walmartfacts.com site doesn't mention anywhere if there is an hour-per-week minimum you have to work in order to be eligable for healthcare. Thats more of an information request though, because I don't think you can make claims comparing the two when none of the information I have seen talks specifically about workers who work less than 20 hours a week. Also, does WSU give health care to employees who work between 20 and 40 hours a week?

Finally Tom I thought I would outright dispute your point, as myself and others I know don't like Wal-Mart and tend to want them to improve, and we are neither a part of a labor union nor are we democrats, so the statement thats its nothing but a political ploy is false.

Onto Barenjager (and I'm sorry this post is getting long, but I'm going at a 1:3 ratio here). My examples of benefits unions have provided in the last 10 years...

If we operate under the assumption that sources directly from the parties are fine (aka walmartwatch.com) then I would encourage you to read a little from the following



Or a good one contradicting your teachers union argument...especially fitting considering the debate over the WASL Adam and I had a few posts back or so


Looking at sources without a bias however I found this


Which notes something interesting when it says "In 2006, full-time wage and salary workers who were union members had
median usual weekly earnings of $833, compared with a median of $642 for wage and salary workers who were not represented by unions." Now to me, higher wages are a good thing.

Also, good interview done by PBS on the benefits of unions can be found at


Also, to your point on the automotive industry, I believe most people (including industry officials) believe that the decline of the american automotive industry is in large part due to its overeliance on SUVs and such which killed them when gas prices shot through the roof, as shown in the following article


Also, I am going to respond to your second post here as well, and also being responding to Paul.

Of course all people are biased, thats an inherint assumption we all make. The point I was making is that walmartwatch.com is signifigantly more biased in its information because it comes from Wal-Mart. Its the exact same reason people don't believe Sudan when they say they are not sponsoring genocide, because they are one of the subjects of the debate. Indeed this is an academic standard as well, which is why you rarelly see well-written academic papers which draw information from clearly biased sources. My request was that when citing sources we all use things which do not exist for the sole purpose of promoting or attacking an organization, but rather from relativly non-biased whose goal is the spread of information and not the spread of a particular agenda.

Also Paul, you're right Wal-Mart does have a lot on the line in terms of providing information to investors. But I think we all know that the information they will be providing is not going to contain any unnessary criticisms of themselves, thats bad buisness. Instead and problems they are facing are minimized, while the good they are doing is widley publicized. Its no different from other companies, political parties, etc. And, due to the positive bias this information contains, and especially since the quote you provided contains no specifics, it doesn't really disupute any points I brought up. And really, what makes a Wal-Mart spokesman any more credible than the spokesman for a union? They both have a lot at stake, but for some reasons since Wal-Mart is a publicly traded company you seem to be saying (and please correct me if I'm wrong) that whatever it says must be correct and in fact superior to other claims being made.

Furthermore your claims of a leftist newspaper and sources with an agenda are baseless. If you disagree present some proof which would be credible in an academic paper. I mean really, what reason could PBS have to hate Wal-Mart? It's public broadcasting, they're all about presenting news not spreading a political bias. Same with the New York Times. If that's biased than what isn't, the Washington Post? USA Today? Fox? The news has no interest in promoting a political bias, it actually hurts the media if it does so.

As for updated facts, here's a 2007 Human Rights Watch report on Wal-Mart's healthcare plans


The biggest problem I have with them is that they are not cheap enough to actually be viable to people. Target, Costco, and other offer healthcare plans, yet there arent the same complaints about those companies. One of the main reasons is that their healthcare plans do cover more than medicaid and are still cheap enough to be a viable option. In addition what happens when people don't qualify for medicaid. Because Wal-Mart's plans are so expensive people can't afford them and thus are left without any health insurance (this all according the Human Rights Watch).

Once again, why can't Wal-Mart do what Costco has done and offer healthcare plans to its employees which are cost efficient and which cover a fair amount? I'm not asking them to pay for everything, but I am asking them to step up at least to the level other corporations are at.

Tom Forbes said...

While we are on the subject of saving taxpayers money, I wonder what the "progressives" have to say about this story from the Seattle PI last year?

A state audit has questioned nearly $1 billion that Washington's Medicaid program spent last year -- including $75 million that may have to be repaid to the federal government because it was used for unauthorized medical services for undocumented aliens.

Undocumented aliens received prenatal care, chemotherapy, kidney transplants and other procedures the federal government prohibits its money from being spent on, the audit released Thursday found.

The report examined Medicaid payments in the fiscal year that ended in 2005.

For example, PARDner Don Orlich railed against the approximately $9 million dollars that were estimated to be spent on Wal-Mart employees Medicaid benefits in 2006. This is the same Don Orlich
that showed up last May 1 at in support of the "National Day of Action for Immigrant Justice" protest at WSU.

Still think they are interested in saving taxpayer dollars?

Pullman Chamber Guy said...

Thanks, Tom. Your explanations make more sense to me than anything I've ever heard from the opposition. I've passed this along to some of my colleagues.

Some of the critics of Wal-Mart are right on, but not in the way they think. Access to healthcare in the U.S. is becoming more difficult and more expensive, but this is not caused by Wal-Mart or other large corporations. It is the result of our berzerk healthcare system that causes everyone to suffer, including Wal-Mart.

There is a widely-held myth that employers are responsible for the healthcare costs of their employees. The reason that so many people have this misconception is due to the federal government. For decades, the government has offered huge tax incentives for businesses to offer healthcare as a fringe-benefit. It has artificially created a system in which it is cheaper for an employer to purchase healthcare for an employee than for that employee to buy healthcare for himself with take-home wages. This has caused healthcare fringe-benefits to become so widespread for so long that most people have forgotten that they are fringe-benefits (i.e., an OPTIONAL way to pay wages.) Instead, many people incorrectly believe that healthcare benefits are a MORAL DUTY of employers and a RIGHT of employees in addition to wages. Nothing could be further from the truth. Healthcare costs are not the responsibility of employers any more than the costs of food or clothing or entertainment or anything else are.

The result of healthcare insurance being widely offered (and widely expected) is that healthcare costs have become collectivized and bureaucratized. Businesses cannot directly pay unlimited amounts for all the healthcare any employee would ever desire, especially now that people are living longer than ever, so instead they routinely contribute amounts into employee health "insurance" policies. Employees then spend money for healthcare out of giant pools of these contributions.

The result of this collectivization and bureaucratization is that healthcare is becoming more and more expensive. Since money for healthcare is spent out of giant pools of contributions, for the most part, employees don't feel any direct financial effects from their healthcare expenditures. Therefore, an individual has little reason to show any restraint in his healthcare spending, and few people do when they know "it's covered by insurance." There are no free market limiting forces on the price of healthcare. Healthcare providers, like any business, want prices going up higher and higher without limit, and healthcare buyers who don't feel the direct financial effects of buying healthcare have no reason to exert pressure on the providers to keep prices down. For these reasons, healthcare costs are sharply rising. Since employees will not voluntarily exercise restraint, Wal-Mart, and virtually every employer around the U.S., are sensibly trying to promote "healthy living" as way to reduce healthcare costs and also passing along more of the expense to their employees as a way to make them feel the financial pressure and perhaps manage their expenditures more wisely. There is nothing wrong or illegal about this. No, the real problem with healthcare in this country has nothing to do with employers who may or may not choose to offer healthcare fringe-benefits or how much they may charge for those fringe-benefits. The real problem is that healthcare costs are going through ther roof. As those costs rise, it will become increasingly difficult for businesses and individuals to afford, and paying for it will become more of a drag on the national economy and the GDP.

Pressuring companies like Wal-Mart to attempt to clean up the government's mess by dumping more and more money into the bottomless pit of healthcare collectivization and bureaucratization as it gets more expensive is counterproductive and pointless. The only sensible solution is to eliminate healthcare collectivization and bureaucratization altogether, which is the real the cause of rising healthcare costs. We must get the government out of healthcare, and we must expose as false the idea that employers have a moral duty to provide for their employees' healthcare costs. In the absence of government pressure, healthcare collectivization and bureaucratization would end. Healthcare fringe-benefits would be dramatically reduced, take-home wages would increase, health insurance would then be used primarily for catastrophic events, and most people would buy healthcare with take-home wages just as they buy almost everything else with take-home wages. Most importantly, the healthcare industry would get back on a path of free market economic progress, and healthcare would become increasingly better and more affordable for everyone as time went by.

Unfortunately, when you look at the array of powerful special interests that have their snouts deeply in the healthcare trough (government bureaucracies, insurance companies, labor unions, etc.,) I don't think we will ever see this happen. Instead, we will continue to see more scapegoating of companies like Wal-Mart while the healthcare crisis continues and grows out of control.

Paul E. Zimmerman, M.A. said...

Pullman Chamber Guy -

Awesome post, thanks!

It's amazing how many people still do not understand the concept of the Tragedy of the Commons (maybe it's not taught in our public schools anymore - I don't know). Posts like yours could help correct that ignorance.

Paul E. Zimmerman, M.A. said...


You really need to take the time to read through the citations in that HRW piece. Once again, you're citing something that relies largely on old and incomplete information, that prominently places negative quotes from Walmart workers in the body of the text (all of which were recorded in 2005), and this particular piece takes the extra step of making several apples-to-oranges comparisons between corporations with near-random, admittedly incomplete data sets. For someone who wants everyone to not use sources that exist for the "sole purpose of attacking an organization," you sure make some funny picks.

Truth said...

Chamber guy, you do have an excellent point in that the main point of healthcare are the rising costs across the board. I also think that your idea of removing government from healthcare is also a valid one. However, as you noted, I do believe that government ever getting out of healthcare for 2 reasons. The first you mentioned are the special interest on all sides of the political spectrum will strongly fight against it. The second reason I think is that the government will never be able to stop providing healthcare to those who are too poor to afford healthcare.

As such it may be best to fix what we can with the current system, and whether that means allowing negotiation of drug prices, a government tax credit for healthcare, forcing employers to offer more healthcare, and a whole host of other ideas I think that is where our efforts need to be focused.

Paul, first I want to apologize for the post a few days back on why you deleted my comment, I've been pretty tired with finals and I didn't read that all comments are now moderated, sorry.

However to your claims that the Human Rights Watch report is outdated I ask you to find something more recent, and I don't mean walmartfacts.com. What I have provided are news articles and a 2007 Human Rights Watch article to back up my point. You on the other hand have provided facts directly from the company which clearly will have a bias. And really, do you really expect for any information in a detailed survey to be from the past month? This is the most recent survey done on the matter, which used the most recent information available to make its conclusions. So I say again, find something that is more recent to back up your points which is not from walmartfacts.com or another site which clearly is biased towards or against Wal-Mart.

Furthermore I'm wondering what problem you have with Human Rights Watch which is a group "dedicated to protecting the human rights of people around the world". Don't you think its at least a little troubling that an international human rights group has compiled such a large report on a corporation? I mean, this is a group which has recently focused on child soliders, but they saw a need to take the time to focus on Wal-Mart. However, if you do have a problem with HRW I'm wondering if you could please actually illustrate it. Also, could you please present a few examples of the apples-to-oranges comparisons the study uses.

Tom Forbes said...

You are right to take information from any corporation with a large grain of salt. But just because an organization condemns the inhuman practice of child soldiers does not mean that it is a paragon of truth and fairness.

Read carefully what gay rights and AIDS activist Michael Petrelis has to say:

I am disappointed and concerned, as a news consumer, that the May 1 story in the New York Times by reporter Steven Greenhouse about HRW's Wal-Mart report didn't mention the hundreds of donations totaling thousands of dollars since 1988 made by HRW staff and researchers only to Democratic presidential and congressional candidates, the Democratic National Committee and Democratic Party-leaning political action committees. Nor did it reference HRW backing of EFCA.

I believe it would be fair and accurate to say that HRW, based on decades of political donations just to Democrats and the party's affiliates, that this nongovernmental agency is somewhat biased in favor of one U.S. political party. Over the years, I've blogged about how HRW should be above even a hint of partiality toward any political party because human rights advocacy work should not be seen as partisan. Click here and also here for the history of HRW's political contributions.

The release from HRW endorses passage and enactment of EFCA:

A key way to improve protections for worker organizing would be for the US Congress to pass the Employee Free Choice Act (EFCA) and the Bush administration to sign it into law. The EFCA, which passed the US House of Representatives in March and is now under consideration in the Senate, would increase penalties for labor law violations.

EFCA is, not surprisingly, overwhelmingly supported by Democrats in Congress, with only seven GOP cosponsors in the House and zero in the Senate, according to the AFL-CIO web site.

Given HRW staffers extensive contributions only to Democrats and the DNC, and HRW's call for passage of EFCA, I think the New York Times should have noted these facts in its article yesterday. The Times made no mention of EFCA and HRW's endorsement of it.

Interestingly, the Times referenced the following:

Wal-Mart called the [HRW] study “pro-union.” [HRW study author] Ms. Pier said that only $50 of her organization’s $33 million budget came from labor unions.

So the Times did ask HRW about financial support it may have received from unions, while omitting facts about HRW researchers heavily donating to the very pro-Democratic Party and individual Democrats.

Other news outlets, including Business Week and the Associated Press, reported on HRW's endorsement of EFCA, but like the Times, they failed to note HRW employee's giving to Democrats.

Is it asking too much of the Times, Business Week, the AP and the mainstream media to look beyond press releases and statements from spokespersons with HRW and Wal-Mart, to give a fuller picture of the players involved in this story? I think not, but I'm not sure why mainstream reporters failed to dig just a little deeper on HRW before running their stories.

And finally, here is the list of donations from HRW staffers so far for the 2008 presidential and congressional races, which is from the PoliticalMoneyLine

Then there follows a long list of HRW staffer donations to various Democratic candidates.

Petrelis rightfully believes that such blatant political bias by a human rights organization damages their credibility and makes it easy for President Bush, his administration and the right to dismiss their reports and demands for action regarding abuses as part of a partisan agenda.

That is good advice for you as well. When engaged in debate with those of an opposite political persuasion, you should try to find more unbiased sources for "facts" than PBS, the New York Times and Human Rights Watch, all proven water carriers for leftist causes. In this case, however, I am unaware of any studies or criticism of Wal-Mart that are not tainted to some degree with partisan politics.

You should also open your mind to the possibility that all you have been told about Wal-Mart by your professors, by PARD, by Wal-Mart Watch, by a documentary, by the Democratic Party, etc., etc. is simply wrong. Why is it so easy for you to believe that the U.S. government conspired at high levels to fabricate intelligence and take the U.S into an unjustified war and yet so hard for you to believe that labor unions, and their political allies, the Democratic party, lust after the potential dues of 1.9 million Wal-Mart employees? Why is it so easy for you to perceive racism and injustice against people of color, yet so hard to perceive that leftist intellectuals and other elitist snobs have equally heinous prejudices against what they see as a capitalist southern company that caters primarily to low-class, Republican rednecks?

Truth said...

You do raise an interesting point I must admit, however (and I realize this sounds sketchy) I wonder how much influence the political leanings of the employees have on the HRW as an institution. Now here me out. The way I see it, and I apply this standard to news as well, the political leanings of employees can affect the work they do. However it is just as possible that while individuals may feel a certain way they recognize that they need to be as impartial as possible and as a result may go out of there way to try and find opposing viewpoints before presenting their information (as there are no studies done on this any effect it may have is simply speculation).

Another thought however could be that, from their time at HRW, many of the people have come to the conclusion that our Republican party is not the one best suited to human rights, and as such have decided to support the other party. While clearly I have no proof to back this up I also have no proof to refute it, and depending on which angle you come from any number of this theories could be correct.

As for your claim of PBS, the NYT, and HRW being "proven water carriers for leftist causes" (and I realize this is getting repetetive, but please present some of this proof. I know that in terms of the NYT most journalists identify as democrats. However I also know that we are in an era of media where revenue from advertising has become increasingly important and as such the news is forced to reconcile itself with the companies who use its space to advertise. And, once again, I point to the theories I brought up above to ask the question as to what the effect is regarding a persons political bias on work, and how large that effect is. In addition what would you consider an unbiased source, as I really did try to find the most unbiased ones I could.

"ou should also open your mind to the possibility that all you have been told about Wal-Mart by your professors, by PARD, by Wal-Mart Watch, by a documentary, by the Democratic Party, etc., etc. is simply wrong. Why is it so easy for you to believe that the U.S. government conspired at high levels to fabricate intelligence and take the U.S into an unjustified war and yet so hard for you to believe that labor unions, and their political allies, the Democratic party, lust after the potential dues of 1.9 million Wal-Mart employees?"

The reason I tend to believe things about faulty intelligence and what I do about Wal-Mart is due to the vast number of studies, articles, books, etc. which have made a strong case that they are true, many of which are very respected organizations and authors and in the case of the intelligence many of them worked and interviewed people inside Bush's administration.

"Why is it so easy for you to perceive racism and injustice against people of color, yet so hard to perceive that leftist intellectuals and other elitist snobs have equally heinous prejudices against what they see as a capitalist southern company that caters primarily to low-class, Republican rednecks?"

I'm not even sure what you are reffering to in terms of practices which can equal those of racism and injustice not just towards people of color, but also gays, women, people who arent of color etc. What are the practices of the Democratic party (or either party for that matter) which equal to these?

In the end however, this issue is one which distracts from the topic at hand, namely which is that there has been little to no non-biased information to support the healthcare policies which Wal-Mart practices

Tom Forbes said...

"what the effect is regarding a persons political bias on work, and how large that effect is."

There actually have been several impartial scientific studies conducted that confirm a distinct liberal media bias. This UCLA study found that "Our results show a strong liberal bias. All of the news outlets except Fox News’ Special Report and the Washington Times received a score to the left of the average member of Congress. And a few outlets, including the New York Times and CBS Evening News, were closer to the average Democrat in Congress than the center."

The Corporation for Public Broadcasting hired an independent consultant who concluded that liberal comments and ideas dominate news shows on NPR and PBS..

"there has been little to no non-biased information to support the healthcare policies which Wal-Mart practices."

Wrong. The Furman paper I have quoted from above is about as close to impartial as you're going to to get. It was was prepared by a self-confessed progressive Democrat who worked on the Kerry campaign, with no ties to Wal-Mart whatsoever. Here's another study that reaches the same conclusions about Wal-Mart and Medicaid as Furman does.

Bias is real, as are its effects. You can choose to ignore it, or choose to account for it. My beliefs about Wal-Mart, while rooted in my own personal political ideology, are based upon the facts. I would not support Wal-Mart so publicly and so vociferously if that were not the case. I have that much intellectual integrity.

I have to ask you a question, as a liberal. Why must everyone who supports Wal-Mart (or any other cause you don't agree with) be considered to be a paid lackey? I stand to gain absolutely NOTHING by Wal-Mart coming to town. I have never received one dime in compensation for my efforts. I don't even own stock in Wal-Mart. I do what I do because I care about Pullman and want what's best for this community. Period. There actually is quite a bit of unbiased information and opinion out there about Wal-Mart, but this idelogical zealotry prevents people from seeing it as such.

April E. Coggins said...

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it." Joseph Goebbels.

“A lie told often enough becomes truth”
Vladimir Lenin.

Tom Forbes said...

April's quotes are dead on.

The big difference between what TV Reed refers to as "the fanatical Wal-Mart advocates" and PARD is as follows.

We believe that as far as Wal-Mart's labor and business practices go, at best it is no better than most other retailers and at worst, it is no worse than most other retailers. In other words, Wal-Mart is an average retailer. Working retail is not really a career for most people, and working at Wal-Mart is not going to be as lucrative as, say, working at Microsoft or Boeing. Wal-Mart is not some perfect Utopia, and it makes mistakes just like every other company does. I don't agree with a lot of what Wal-Mart does, nor do I think most Wal-Mart supporters in Pullman. I personally believe Wal-Mart has pandered far too much to its critics by feigning political correctness and that's why they are in the boat they are in now.

What is unique about Wal-Mart is the fact that it is the most successful corporation in America. It's low prices put butts in the aisles. This has a positive impact on other businesses where Wal-Mart locates. Just ask Ace Hardware, Duane Brelsford or vandervert Construction. Another undeniable aspect about Wal-Mart's low prices is that it BENEFITS AMERICANS BY INCREASING THE AMOUNT OF DISPOSABLE INCOME. This impacts lower income people the most. Those are two very good things.

PARD and the other Wal-Mart critics exhibit the same passion that you might expect from religious fanatics. To them Wal-Mart is the Great Satan, the root of all evil in the world. Singling out Wal-Mart when so many other retailers do the same things as Wal-Mart makes their fanaticism all the more scary. Their motives seem to be based on a synthesis of rabid anti-globalism and anti-capitalism with sheer unadulterated classism and bigotry. There is nothing Wal-Mart could ever do to appease them, other than go out of business.

But worst of all, PARD is using the legal process to usurp free enterprise and turn the democratic process on its head by attempting to deny Wal-Mart its constitutional rights through judicial blackmail. The members of PARD should boycott Wal-Mart and encourage others to do the same through education. That is their right of free speech. But their tactics of delay, delay, and delay prove they have no faith in either the process or the people. What we are faced with is a tyranny of the minority, and it is un-American and wrong and must be opposed. If Wal-Mart is stopped by PARD, who will be next? It is a dangerous, dangerous path to start down.

I would urge you as a progressive not to go down the path of anti-Wal-Mart fanaticism. Don't drink the Kool-Aid that is being offered. As Furman demonstrates, you can be a progressive and still acknowledge the good that Wal-Mart does. Wal Mart may not be the most generous company, but EVIL???? Compared with WHO? The same criticisms could be made of ANY business. If the unions were were to successfully ruin the company, would the result produce a better America? Not measurably. It's fantastically naive to believe that "if we change Wal-Mart, other companies will follow their lead." The labor unions have sold progressives a bill of goods by getting them to join in their jihad against Wal-Mart.

If you have to fight something, fight the climate that Wal-Mart competes in. Fight for living wages. Fight for universal health care. Produce a more just, level playing field rather than insist Wal-Mart unilaterally lavish superior wages and benefits upon its employees while letting McDonald's, Target, Home Depot, Starbucks, and K-Mart off the hook.

Some warnings, from Trent Wisecup, vice president of a national public affairs and political consulting firm:

The liberal intelligentsia views Wal-Mart as the most frightening force in corporate America because it maintains a non-union workforce...The problem for the left is that the majority of middle class America disagrees. Wal-Mart is the world's largest corporation for a reason. One hundred million Americans shop at its stores to benefit from its everyday low prices. A working family can save more than $500 a year at Wal-Mart on groceries alone. This is latte money for liberals, but it makes a real difference to middle-class families who have to stretch each paycheck to make ends meet...By embracing the anti-corporate rhetoric of liberals who bemoan the Wal-Martization of America...[t]he entertainment, environmental, and academic elites who form the backbone of the modern liberal coalition are driving the party of Franklin Delano Roosevelt and John F. Kennedy off the cliff, Thelma and Louise style.

and Jack Belkin, a Yale Law School professor:

What is more difficult for many academics to recognize is that progressivism has its own distinctive dangers and defects. Unfortunately, these tend to be less visible from within a progressivist sensibility. They include elitism, paternalism, authoritarianism, naivete, excessive and misplaced respect for the "best and brightest," isolation from the concerns of ordinary people, an inflated sense of superiority over ordinary people, disdain for popular values, fear of popular rule, confusion of factual and moral expertise, and meritocratic hubris.

Truth said...

Well to start with I will say that I clearly don't think Wal-Mart is the great satan. I do recognize that their low prices are incredibly beneficial to a number of communities, such as Pullman, and that discounting those benefits would be foolish (which is why I've never argued against Wal-Mart in Pullman). What I have said is that as the largest and most sucessful company in the US I would like to see them step up and really set an example for the rest of America to follow. For example, if Wal-Mart was known for its health benefits then I'm willing to bet that many other retail stores would follow fairly quickly. I will of course continue to advocate that somethign be done about the bigger issue of healthcare, which I stated was the real issue a few comments back.

Furthermore I never said bias wasn't real, that would just be foolish. What I said is that the effects it has on people's work are somewhat untested. And, for the UCLA study, an important factor to consider is that the study was done in 2004 when Republicans were in control of Congress. Thus the media could be absolutly moderate however when compared with most of Congress it would tilt towards the left because the average in Congress was conservative.

Relating specifically to Wal-Mart I cannot answer things as a liberal, what I can say however is that I never claimed every Wal-Mart supported was a "paid lackey". My biggest and most consistent problem however has been with walmartfacts.com, which I have equated with anti Wal-Mart sites as unreliable. I do think the article you presented about Wal-Mart not effecting foodstamps was interesting, and after finals I'll look at that and the HRW report more indepth, because they seem to be at odds with each other. I will say however that I could not find the date the study you provided was written in. However it doesnt cite any information from even 2006, which I have to say I find mildly amusing considering the constant criticisms I faced for presenting information from even early 2006. As the HRW report was put out this year, it does mean that it will have more up-to-date information.

Tom Forbes said...

So, the New York Times is LESS liberal because the Senate is MORE Democratic? Riiigghhhttt. If you insist on being the one person in the U.S. who believes the New York Times is not biased, then who am I to try and change you mind with the facts?

I'm going to finish up with one final observation. My grandparents were poor farmers. My dad worked in a factory. My mom was a part-time secretary. I was the first person in my family to ever graduate from college. I once was a Young Democrat because I thought the Democrats were the party of the common man, the party of the working man. When I learned that the Democrats were the party of intellectual elites who disdained average people and their values, I became a Republican.

The "Pollyannanomics" you espouse demonstrates a complete lack of any understanding of real economics. If Wal-Mart either voluntarily or involuntarily raises prices to increase wages and benefits, I can guarantee you that no other retailer will follow suit. No, Target, K-Mart, Sears, Fred Meyer, et. al., will utilize that competitive advantage to eat into Wal-Mart's sales. Eventually, Wal-Mart will be forced to reduce its labor force. The increased benefits for Wal-Mart employees will be short-lived as they rejoin the ranks of the unemployed. The Medicaid burden on taxpayers will really go up then. Nothing will change. Your attitude proves what Belkin wrote. Progressives really are blind to their own weaknesses.

Truth said...

"So, the New York Times is LESS liberal because the Senate is MORE Democratic? Riiigghhhttt. If you insist on being the one person in the U.S. who believes the New York Times is not biased, then who am I to try and change you mind with the facts?"

Thats not what I said. What I said was an observation of the methods used to determine bias in the media, namely comparing it to Congress. As Congress was controlled by Republicans, and as their study looked at bias in relation to Congress, the results will be skewed. As I stated before, according to their method the NYT could be moderate conservative and probably still would have been more liberal than the majority of Congress. Think of it on a scale from 1 - 5, where 1 is liberal, 5 is conservative, and 3 is relativly neutral. Congress in 2004 could probably best be described as a 5, very conservative. Now the press was found to more liberal than those in Congress, however even a rating of 3, fairly nuetral, would make the press more liberal than the majority of Congress. It was an observation on the methods used in the study, and one which I believe you must admit is extremelly valid. If you want to offer another study thats fine. However in the number of studies I was looking at for media bias as a whole I've found the media tends to lie about in the middle, occassionally going slightly more liberal or conservative.

As for Wal-Mart going out of buisness if it offered health insurance. I believe using numbers that you provided above I showed that if Wal-Mart was to give $5,000 more a year per employee for healthcare they would still make a profit of $4.5 billion a year, far above the point of reducing its labor force. And, if this happened, then it is likely (though clearly not guaranteed) that, in a desire to hire the best workers possible, other retail companies would follow suit. This can be found in more skilled industries where companies compete with each other to offer better benefits to require better workers.

Also, do you think it would be possible for you to end a post without some form of (often factually incorrect) personal attack on me or anybody else who disagree with you. Comments such as "Progressives really are blind to their own weaknesses" aren't relevate to the discussion we are having nor are they productive in any way. All they serve to do is reinforce the biggest problem our country currently faces, namely the divisions in our country which make us great but which politicians from both parties keep fanning in order to get elected. If we can move past those divisions and into a more productive style of debate then we will have trully gotten somewhere.

Adam J. Niehenke said...

One thing I think a lot of people forget with walmart is they are the biggest contributers to schools in the area they recide and they keep city's alive. Think of much tax revenue walmart bring in just off its sales tax, then add its proprety tax it pays to moscow schools. Pull Walmart out and watch the city crash. Walmart is a superior corporation to the Co-op. If you don't like their health benefits to employees, don't shop there. There job is to make money not to promote a socialistic ideology.