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Opinion: Wal-Mart, The $288 Billion Welfare Queen

(The following column by Florida State Representative Susan Bucher appeared on the Tallahassee Democrat website on April 21.)

TALLAHASSEE -- Wal-Mart is the sort of company for which superlatives were invented. Just named the number-one corporation on the Fortune 500 list for the fourth year in a row, the country's largest private employer pulled down roughly $288 billion in revenue last year—and over $10 billion in pure profit.

That's larger than the annual GDP of Saudi Arabia. Five of the top 10 richest Americans hail from the Walton family. And yet Wal-Mart is what former President Ronald Reagan might refer to as, well, a welfare queen.

As states across the country struggle to balance budgets and keep their Medicaid programs in check, data from Florida and 12 other states show Wal-Mart to be a top corporate beneficiary of state-run, taxpayer-funded programs like Medicaid.

That is, the retail behemoth deliberately cuts corners on employee health care, forcing a disproportionate number of its employees into state programs in order to receive health care for themselves and their families.

Of Wal-Mart's 1.2 million employees, only about 500,000 of them receive Wal-Mart health care. That's because the employee share of premiums is so high - in some cases, up to $250 per month, about 25 percent of the average monthly salary of a Wal-Mart hourly employee - that many full-time workers simply can't afford it.

In Florida, Wal-Mart has 91,000 employees. Every time an uninsured Wal-Mart worker goes to the ER and can't afford to pay for treatments, all Floridians are picking up the bill. Meanwhile, our Medicaid system is in crisis.

As health-care costs explode and job-based coverage declines across the board, more and more hardworking Americans are being forced into an already cash-strapped system. Medicaid costs in Florida, never cheap, have more than doubled over the past 10 years, from approximately $6 billion in 1995 to more than $14 billion today. To the extent that Medicaid is in crisis, Wal-Mart is a significant part of the problem.

It might be tempting to dismiss this issue as a larger one of corporate welfare, or to argue that we're singling out Wal-Mart unfairly. But facts are facts: Wal-Mart does not just shift health-care costs onto taxpayers, it does so at a level well beyond that of any other employer.

Five employers in Florida account for 29,000 Medicaid-eligible individuals (employees or dependents). Wal-Mart's share represents 42 percent of that group. In Georgia, children of Wal-Mart employees made up over 10,000 of those on Georgia's health-care program for uninsured kids, the PeachCare for Kids program. The next largest employer, Publix, had only 700.

Wal-Mart sees no problem with this. For evidence, you can go straight to the top. In a two-day "open house" with the press at Bentonville, Ark., headquarters earlier this month, Wal-Mart CEO Lee Scott was asked why so many Wal-Mart employees are getting their health care from public assistance programs instead of their employer. Scott said, "In some of our states, the public program may actually be a better value—with relatively high income limits to qualify, and low premiums."

Government programs are a safety net for low-income Americans, not a competitor to the largest, most profitable company in the world. But more importantly, Scott is admitting that Wal-Mart takes advantage of public health programs for its own competitive ends: It passes costs onto taxpayers as a business strategy—not as an unfortunate consequence of some heretofore unrealized deficiency in its health-care program.

Finally, his response is entirely disingenuous. Scott acts as though public programs are a better deal for workers, when really they're simply a better deal for Wal-Mart. It's not that Wal-Mart can't afford to do better. It's that Wal-Mart chooses not to.

The Maryland Legislature recently passed a bill that would make large employers like Wal-Mart pay their fair share. It would require all companies with 10,000 or more employees to spend at least 8 percent of their payroll on providing health care for their workers or to pay into a state health care fund.

But in Maryland, Gov. Robert Ehrlich himself is on the Wal-Mart dole. He accepted thousands in campaign funds from Wal-Mart in January, just as Wal-Mart poured $250,000 into the Florida Republican Party coffers last year.

Call it "hush money": Wal-Mart keeps lining its pockets with taxpayer money, and the governors agree to keep quiet about it. It's about time someone stood up to them.

(The letter originally appeared in The Tallahassee Democrat on April 19, 2005. Bucher is a member of the Florida House of Representatives (D-West Palm Beach)).

Friday, April 22, 2005

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