It is no secret that for years, Wal-Mart has underpaid its employees, and offered employees health care benefits at such a high price, that many Wal-Mart employees can't afford to buy the insurance, and end up on public assistance. Unlike traditional 'corporate welfare,' in which government funds, tax breaks or other subsidies are legislated for the benefit of corporations, this is a type of state subsidy that Wal-Mart creates for itself by paying such low wages and benefits that often people who are employed there still end up on Medicaid, food stamps, public housing and other forms of assistance.
So the legislature in Maryland this week decided to do something about it. Actually they had decided to several months ago, and passed a law requiring that companies with over 10,000 employees in Maryland either spend 8% of their payroll on health care coverage, or pay the difference into the state's medicare fund (since the state ends up paying the difference anyway). There are many companies in Maryland with over 10,000 employees, but Wal-Mart is the only one that the law covers since the rest already spend 8% of their payroll on health insurance. And considering how low wages are at Wal-Mart compared to most of the others, for Wal-Mart not to even qualify on a percentage basis really makes it clear what lousy insurance benefits they have been providing. The measure was vetoed by Republican Governor Robert Ehrlich, but this week that veto was overridden by both houses of the Maryland legislature.
“The taxpayers are giving a health-care subsidy to the largest retailer on earth,” argued Democratic Delegate Kumar Barve regarding the vote to override.
"Don't dump your employees that you refuse to insure into our Medicaid system," said the bill's sponsor, Sen. Gloria Lawlah.
Exactly. And if governments want to give such a subsidy it is their right to legislate it. But Wal-Mart (one of the most profitable corporations in the world) is effectively helping themselves to a taxpayer subsidy by taking the back door approach by pricing their employees out of the market.
The company faces legal pressure nationwide.
In Pennsylvania, a judge this week approved a class-action lawsuit by employees who say the company pressured them to work off the clock. Last month, a California jury awarded workers $172 million for illegally denied lunch breaks, and Wal-Mart settled a similar Colorado case for $50 million.
The company is appealing the California verdict and may pursue an appeal of the class-action certification in Philadelphia.
And let's not forget that this is only this year's dirty laundry. Last year, Wal-Mart agreed to donate $11 million to an anti-immigrant program to settle a suit involving the hiring of illegal aliens in 23 states to clean their stores at night, in some cases for as little as $2 for a full nights work. The government didn't buy Wal-Mart's explanation that somehow independent contractors in all 23 states simultaneously decided to hire undocumented workers just out of sheer coincidence, without any of them getting a green light from Wal-Mart. And in other cases the past few years, it was hit for violating child labor laws, and a gender discrimination suit for selectively underpaying female employees.
And we won't even get into how Wal-Mart sells lots of stuff that is produced in overseas sweatshops by people earning literally pennies per hour.
Wal-Mart: Low prices, Low standards.