Benefits and Jobs
Recently I wrote a response to a chapter of Michael Moore’s new book that had been published in the Guardian. One of the points Mike made was that providing employee benefits like daycare would in turn make money for the company. I countered by contending that requiring employers to provide benefits to their employees, especially small businesses, would result in a loss of jobs. Well, take a look at this article on Wal-Mart.
Wal-Mart’s health insurance strategy is acquiring a growing number of critics. A San Jose assemblywoman claims health benefits are so unaffordable that workers instead sign up for government health care at the urging of the retailer. And perhaps the most visable opponents are the 70,000 striking Southern California grocery workers, who blame the retail giant for forcing their traditional grocery employers to phase out one of the best health benefits packages in the retail industry.
A new law could drastically change Wal-Mart’s strategy in California. The retailer will have to pay for a greater chunk of health care premiums under the sweeping health insurance expansion bill that Gov. Gray Davis signed earlier this month. The cost could prompt Wal-Mart to scale back its ambitious growth plans in the Golden State, curb hiring at existing stores or automate jobs, industry observers say.
“Wal-Mart picks its battles strategically,” said Gary Giblen, director of research at C.L. King & Associates, a New York investment research firm. “They’re going to focus less on an area where they’re competing less advantageously.”
Now, say what you like about Wal-Mart’s benefits policies. I personally find them distasteful, and were I running Wal-Mart I would probably do things differently. But the fact remains that Wal-Mart is not doing anything illegal, and requiring these types of benefits legislatively will result in fewer people being hired, which goes directly against Moore’s assertion.
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