[Updated] Being cheap on health insurance benefits, Wal-Mart has effectively passed the cost of its employee health care onto state governments. A bill which was making its way through the Maryland legislature, and has now passed, would change that, but not by much, requiring “organizations with more than 10,000 employees to spend at least 8 percent of their payroll on health benefits — or put the money directly into the state’s health program for the poor.”
“We’re looking for responsible businesses to ante up . . . and provide adequate health care,” said Sen. Thomas M. Middleton (D-Charles), the Finance Committee chairman, as the Senate approved the measure with a majority wide enough to survive an anticipated veto. A similar bill has cleared the House of Delegates, and legislators expect to reconcile their differences easily.
Wal-Mart has responded to a “spate of bad publicity” over the way it treats its workers with a public relations campaign. “Along with tarnishing the folksy image fostered by founder Sam Walton, that sort of publicity could hurt the company’s ability to open new stores and could lead other states to pursue legislation similar to that advancing in Maryland, company officials said.” Wal-Mart was quick to denounce the legislation in Maryland:
Wal-Mart “will have to rethink its future growth in a state that is willing to pass such a bad business bill,” said Nate Hurst, a government relations manager for the company. “This type of legislation, where lawmakers single out one employer, does not create a favorable environment.”
Though it was clear the bill was aimed at Wal-Mart, it does not specifically mention the chain. The bill was strongly backed by a major competitor, Giant Food LLC, and “the United Food and Commercial Workers Local 400, which represents Giant’s Washington area workers.” Giant has been losing business to Wal-Mart:
Giant Vice President Barry F. Scher said that health care costs now account for 20 percent of Giant’s payroll expenses. By comparison, Wal-Mart spends between 7 and 8 percent, Hurst said.