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2005-10-26
Bentonville, AR. Wal-Mart Wants Healthy Workers Who Donít Stay Long

Are you in good physical shape, and looking for a job that will last a year or two? Consider the benefits of working at Wal-Mart. An internal memo from Wal-Mart leaked to the media this week suggests that the giant retailer is looking to cut benefit costs for its workers by hiring healthier people, reducing 401k plans, and discouraging long-term employment at the company. The memo, prepared by Susan Chambers, an executive vice president for benefits, recommends that the company hire more part-timers, and discourage unhealthy people from entering the Wal-Mart workforce, according to a story in today's New York Times. Chambers informs Wal-Mart's Board of Directors that long-term employees cost more than new workers -- but they are no more productive. "The cost of an associate with seven years of tenure is almost 55% more than the cost of an associate with one year of tenure," Chambers explains, "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." Chambers recommends that all jobs at Wal-Mart should be made to include "some physical activities" (like using cashiers to gather carts in the parking lot) which would discourage the infirm from taking, or keeping, jobs at Wal-Mart. The memo admits that 46% of the dependent children of Wal-Mart employees either have no insurance, or are on publicly subsidized programs like Medicaid -- which is jointly funded by state and federal taxes. Chambers told the New York Times that Wal-Mart's benefit plan "is known today as being generous." That's why so many Wal-Mart workers don't take advantage of it. Wal-Mart claims it spent $4.2 billion on employee benefits last year, up from $2.8 billion three years before. The Chambers memo recommends that Wal-Mart charge its employees more for their spouse's health plan, and reduce the company's life insurance plan to $12,000, instead of using the worker's annual earnings as the death benefit level. Wal-Mart used to offer its workers a "dead peasant's" life insurance plan that named the company as the beneficiary, but that practice ended when Wal-Mart was sued and lost their "company owned life insurance" case in a Texas court. Chambers confirmed in her memo the criticism offered by many Wal-Mart opponents that its "everyday low benefits" exploit its workforce. "Wal-Mart's critics can easily exploit some aspects of our benefits offering to make their case; in other words, our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance." Chambers said Wal-Mart spends $1.5 billion on health insurance for its 1.2 million U.S. workers. Chambers notes that if Wal-Mart makes these employee benefit changes, "These moves would also dissuade unhealthy people from coming to work at Wal-Mart."

What you can do: It is hard to reconcile the company that says "our people make the difference," and that spends millions of dollars on image advertising about opening up career opportunities at Wal-Mart. with the company looking to dump its veteran employees. Sprawl-Busters has written about Wal-Mart's view of its workers as a "building cost," similar to heat or utility bills, and its "mid-week payroll adjustments" which lowers workers' hours to match falling sales levels. This memo from a senior Wal-Mart officials makes it clear that Wal-Mart does not want to encourage career employees at Wal-Mart, because they cost more, and there is always a ready supply of entry-level workers who will cost less, and produce the same amount. It's all part of producing everyday low prices, and everyday high profits for America's leading exploiter of labor.










 
 
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