The Widdershins

It’s a cold hard world out there-unless you’re a Wal-Mart heir

Posted on: October 8, 2014

monopoly-guy

Just in time for the “holiday season”, Wal-mart decided it couldn’t wait to hand out the lumps of coal to its employees.  The company has decided it can no longer afford to offer health insurance coverage to its part-time employees.  Further, they decided they also needed to increase the cost of coverage for their employees who will still have coverage.

The world’s largest retailer said it would raise health insurance premiums for its entire U.S. workforce beginning in January. In addition, Wal-Mart will end coverage for employees who work fewer than 30 hours a week, a change that will impact 2 percent of U.S. workers, or about 30,000 people.

Okay…fair enough.  The company says it is experiencing “higher health care costs” and also “It said more people than expected had enrolled in its plans and its annual forecast for health care costs had risen by 50 percent.”.  Okay, I think I get this now:  Wal-Mart offered health care coverage to its employees…employees signed up for that coverage…Wal-Mart goofed and didn’t expect that many employees to sign up. (?)  Huh..what?  The largest retailer in the world doesn’t employee HR or finance people smart enough to guestimate how many folks would sign up for their health care plans?  Well I certainly think heads should roll, but it shouldn’t be at the expense of their rank and file employees.

The decision to reduce coverage came a week before the company’s chief executive, Doug McMillion, is due to face fund managers and analysts at an annual meeting for the investment community. Wal-Mart has been struggling to boost profits, with U.S. same-store sales flat or declining for the last six quarters.

Wal-Mart said the move would bring it in line with many of its competitors. Target Corp and Home Depot Inc recently announced cuts to benefits in light of the Affordable Care Act.

Ah yes, the good ole A.C.A., aka Obamacare.  Well I guess they had to blame it on something.  Now, reading the article I could not help but laugh out loud at this:

Wal-Mart’s Welborn [senior vice president of global benefits] said on a conference call that the company had not yet figured out how much it would save by cutting benefits. The company said in August it expected to spend $500 million on U.S. healthcare this year, up from its estimate of $330 million just a few months earlier.

The yahoo article points out that the decision “would primarily hurt lower-income workers, many of whom are being left behind in the economic recovery.”.  And that brings up another interesting little fact that I’m sure some of you are are aware of,, either by personal experience or stories from family members and it’s called the great wage slowdown.

The typical American family makes less than the typical family did 15 years ago, a statement that hadn’t previously been true since the Great Depression. Even as the unemployment rate has fallen in the last few years, wage growth has remained mediocre. Last week’s jobs report offered the latest evidence: The jobless rate fell below 6 percent, yet hourly pay has risen just 2 percent over the last year, not much faster than inflation. The combination has puzzled economists and frustrated workers.

The Times article goes into a lot of economic stuff which I’m just about totally unfamiliar with.  The writer does say Obama gave a speech touting the unemployment drop and that surely good times will be here again soon.  One thing I found ironic from the Times piece was this little nugget:

As for the other entry in the ledger, the biggest reason to think economic growth may translate more directly into wage gains is the turnabout in health costs. After years of rapid increases, they have slowed sharply in the last three years. Mr. Obama likes to give more credit to the 2010 health care lawthan most observers do, but he’s not wrong about the trend’s significance.

Ohhhhhkay then.  So health costs have gone down (sharply?) yet they are high enough that Wal-Mart must stop offering coverage for some of its part-time employees.  My head is spinning here.  I guess the good thing for the Wal-Mart employees affected is that they will be able to look for health care on the exchanges since they won’t have company-sponsored insurance any longer.  After all, Wal-Mart has got to watch that bottom line, especially if any of the Wal-Mart heirs still have company stock.  And speaking of those Wal-Mart heirs…

When people speak of the uber-rich, they surely have the Wal-Mart heirs in mind.

Consider the Wal-Mart heirs: Since 1983, their net worth has increased a staggering 6,700 percent. According to a report released last week by the union-backed Economic Policy Institute, here’s how many American families earning the median income it would have taken to match the Waltons’ wealth in a given year:

  • In 1983, the Walton family’s net worth was $2.15 billion, equivalent to the net worth of 61,992 average American families, about the population of…Peoria, Arizona
  • In 1989, the Walton family’s net worth was $9.42 billion, equivalent to the net worth of 200,434 average American families, about the population of…Albuquerque, New Mexico
  • In 1992, the Walton family’s net worth was $23.8 billion, equivalent to the net worth of 536,631 average American families, about the population of…San Antonio, Texas
  • In 1998, the Walton family’s net worth was $48 billion, equivalent to the net worth of 796,089 average American families, about the population of…The State of New Mexico
  • In 2001, the Walton family’s net worth was $92.8 billion, equivalent to the net worth of 1,077,761 average American families, about the population of…Chicago, Illinois
  • In 2013, the Walton family’s net worth was $144.7 billion, equivalent to the net worth of 1,782,020 average American families, about the population of…The State of Louisiana

I just have to wonder if that’s what Mr. Sam had in mind.

Okay, this is an open thread.  Talk amongst yourselves (if you wish!).

 

 

 

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18 Responses to "It’s a cold hard world out there-unless you’re a Wal-Mart heir"

Just when I think I couldn’t hate walmart more…despicable people. Great post Fredster!

annie@1: annie, I hardly wanted to play class warfare against the Wal-mart heirs, but i don’t know of anyone or any group that had their net worth increase that much. 😯 i don’t know how they’ve invested but I would assume they’ve got a ton of Wal-mart stock. And isn’t it amazing that the company doesn’t even know how much they *may* save by dropping health coverage for those employees. SMH

The announcement in cutting back on health care for part-timers by Wal-Mart is essentially the same thing as a struggling citizen going into the social services offices and making application for benefits.

What Wal-Mart is doing is merely making application for corporate welfare — making its working poor employees (poor because of the subsistence level wages) take the last available avenue for health care. This is nothing new for Wal-Mart, their workers have been qualifying for food stamps for years, but at some level no one seems to care we are directly subsidizing the biggest retailer in the world. Add to that the tax abatements, the infrastructure improvements, and the myriad other taxpayer financed bobbles we give the Walton family every year in order for them to play modern day lieges and you have yourself a 21st century Dickensian tale.

Just when you thought that business ethics have hit bottom, we discover an entire sub=basement exists.

Prolix@3: I forgot that many of the wally-world employees are eligible for food stamps. That is a subsidy paid to the company by every taxpayer in the country.

Add to that the tax abatements, the infrastructure improvements, and the myriad other taxpayer financed bobbles

One of the things the company does that has driven me nuts is when they have an original store in an area, announce they are going to build a Super Wal-mart for the area and then refuse to tear down or otherwise mitigate the old bldg. The previous store then becomes something the local community then has to do something with on their own dime.

chat@4: Business ethics ≠ Wal-Mart.

Okay, in the universe of silly ideas that cater to (increasingly annoying) bicyclists, this one has got to take the cake.

Oh dear god/goddess:

@ Prolix: exactly! Walmart knows we, the public, will pay for these benefits.

It’s not just Wal-Mart, oh no.

The oh-so-poverty stricken shareholders of General Electric (yup, you’re reading that correctly, I said GE) are NOT busy bringing good things to life. My 91 year old father got notified three weeks ago that GE is dropping it’s pensioners’ insurance.

Now, GE has not been quite as draconian as Wal-Mart. They are offering an $1100.00 dollar a year reimbursement to the retiree- a sort of quasi-voucher system. Still, the cheapest decent insurance I can find in MA is about $101.00 a month, plus $41.00 for prescription coverage.

So that is roughly $600.00 a month out of a 91 year old’s fixed income. I get that they want to dump us babyboomers, but how many of the greatest generation can still be living that GE can’t afford a few hundred a year per person to insure them?

Correction: I meant $600 a year, but that’s a lot for a 91 year old whose pension and SS benefits are not large. And it just shouldn’t happen to the very very elderly at all.

Florida dropped our coverage years ago. They give us a flat $100 a month., I am already paying $164 a month for Medicare and gap insurance is $280, plus $49.50 for Part D = a bunch out of my relatively small income.

@12 That’s terrible! Dropping coverage on nurses is a special kind of evil. Your premium medigap costs are higher than MA. I checked our best rated policy yesterday, MA Blue Cross Bronze and it’s $171.00 a month plus $41. 00 prescription coverage with a $300.00 deductible, and I think about $76.00 for expanded prescription coverage. Your medigap rates are higher than ours.

Oh dear, am I going to have to give Mitt Romney credit for something? 🙂

I choke on admitting it, but Romneycare actually worked quite well here.

@Mary Luke: Was that, the G.E. plan for your father like a medi-gap policy to go with his medicare?

I had not had a reason to mention this before, but G.E. sold their appliance division to Electrolux of Sweden for $3 billion.

@Mary Luke: oops you answered that further down.

@13: Florida does not regulate or cap insurances in any way since the Repubs took over, so we pay the highest rates in the country.

Costco announced that they will n o t be cutting employees benefits. I joined it this year.

@3: Thats it in a nutshell.

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