Tuesday, March 07, 2006

If your compensation isn't enough, why do you work there?

When I worked at my aunt's wine store, from time to time someone would say our prices were too high, saying that so-and-so a few miles away sold it for cheaper. Well, just because someone "undercut" us didn't mean I was going to match the price. More importantly, at no time did I ever prevent someone from leaving our store and taking advantage of lower prices elsewhere.

Similarly, stories like this garner no sympathy from me. It's an older one from January 12th, before the Maryland bill passed, but I came across it just a couple of days ago, and I haven't seen anyone discuss it. If you're not getting compensated enough at your job, and you are indeed worth more, then seek employment elsewhere. Only losers, those who cannot compete in the free market, turn to government to protect them.
For One Clerk, Fight for Wal-Mart Bill Is Personal

... "You better listen," Cynthia Murray told her co-workers gathered there. When her shift ended at 3 p.m., she turned her back on the store and headed through the rain to Annapolis.

There, the 49-year-old sales associate was embraced by lawmakers and union leaders. Still wearing her blue apron, with its "How May I Help You?" slogan, Murray offered a rare statement in this debate that has drawn national attention and spurred an advertising and lobbying frenzy.

Hers was the voice of someone who might actually be affected.

"I've worked at Wal-Mart for more than five years, and I still can't afford their health care. I know many of my co-workers can't afford it either."

Murray said the $200-a-month plan she was offered to cover her and her husband would cost about a quarter of her monthly pay. So she goes without coverage and prays that she and her family will stay well. She said she might face repercussions for speaking out, but that is beyond her control.

"God puts us in the right place for the right reasons. That is why I am here."

Wal-Mart officials countered that the company recently expanded its range of heath care plans -- including one that provides benefits for as little as $23 a month to a single worker.

"We provide insurance to over 1 million Americans," said Nate Hurst, a spokesman for the giant retailer. "Clearly this bill is about politics -- bad politics."

The debate over the Fair Share Health Care Fund Act, commonly known as the Wal-Mart bill, has dominated politics in the run-up to the General Assembly, with the retailer arguing that Democrats have unfairly singled out one company and union leaders arguing that workers deserve better treatment....

Busch could not provide figures for how many of Maryland's Wal-Mart workers are on Medicaid, and the AFL-CIO sued unsuccessfully to get that information, said Naomi Walker, the labor organization's director of state legislative programs.

But in 18 states that have released the information, Wal-Mart was among the top three employers that shifted workers into Medicaid, the children's insurance program and other state aid, Walker said.

A survey by Georgia officials found that more than 10,000 children of Wal-Mart employees were enrolled in the state's health insurance program for children at a cost of nearly $10 million annually.

Some of Maryland's Wal-Mart workers make so little that they qualify for such poverty programs.

The average wage for full-time sales associates in Maryland is $9.97 an hour, and full-time workers at Wal-Mart put in from 34 to 40 hours a week, Hurst said. At that rate, an employee working 40 hours a week earns $19,142 a year, an income below the $19,350 federal poverty level for a family of four.

Wal-Mart officials have said their company is living up to its responsibilities to provide adequate health care coverage to workers.

Under recently expanded benefits, Maryland workers now have a choice of several plans, including a "value plan" that costs $23 a month for a single worker, $37 a month for a parent and children, and $65 a month for two parents and children, said corporate spokesman Dan Fogleman.

That gives each family member three doctors' visits and three generic prescriptions before being subject to an annual deductible of $1,000. Full-time workers are eligible for enrollment after 180 days. Part-timers can enroll after two years.

"This plan would have been available" to Murray, Fogleman said. He said the company does not steer workers to Medicaid or other state programs.

For her part, Murray said Wal-Mart did not offer her any health insurance option other than the one she could not afford. She said she did not want to turn to Medicaid for help. "I probably do qualify, but that is not the way to go."
Ah yes, invoke the Almighty's name, and then that really makes your stand righteous and just, doesn't it? Let me be candid. I'm a Christian who believes in God and His Son Jesus Christ. I believe God can and does intervene in the affairs of men. But I cannot bring myself to believe, not for a moment, that God is somehow keeping Cynthia Murray in a bad job where she's getting paid less than she deserves, when she has the freedom to seek jobs elsewhere.

Murray might think she's not relying on the government by refusing to go on Medicaid, but she's still calling upon the might of the state: Medicaid, welfare and laws requiring health care are still the same, because they use the power of government to force people to give some of their property to others, in completely involuntary transactions. If she thinks she deserves more in pay, let her seek opportunities at other companies. Why must she use the government to force her employer pay her what she thinks is fair? Is she so unskilled and uncompetitive that she cannot earn elsewhere what she claims she is worth?

When we have the details of Wal-Mart's plans in black and white, I have to postulate that Murray is misinformed (perhaps by an HR worker who doesn't know). The rest of the article, though, is worse than misinformed. It's full of figures, statistics and insinuations that don't stand up to scrutiny.

Murray was offered a plan at $200 per month, which she said equaled a quarter of her monthly pay. The article mentioned full-time associates earning a hair below $10 per hour, but either she isn't at that level of pay, or she doesn't work full-time. Even if she works just 34-hour weeks, and assuming a February-like month of precisely four weeks, she'd have to earn only $5.88 per hour. After five years on the job, she can't even broach $6 per hour? Or the article just plain wrong? Even at just the federal minimum wage of $5.15 per hour, she'd earn $206 per 40-hour week. And unmentioned in the article are her husband's income and insurance status, which could drastically change our perception of a poor Wal-Mart worker who can't afford health insurance.

"...union leaders arguing that workers deserve better treatment." I addressed this issue in my earlier entry, "How much do you 'deserve' in pay?" You do not "deserve" anything when it comes to another person's private property, whether it's your neighbor's yard or your employer's business.

"But in 18 states that have released the information, Wal-Mart was among the top three employers that shifted workers into Medicaid, the children's insurance program and other state aid, Walker said." That is indeed regrettable, for the simple reason that it's redistribution of wealth. I do not mean to sound cold-hearted, but the state is not the solution to helping those "poorer" workers. Only private charity is. However, let's look at it a different way. Georgia's government, courtesy of state taxpayers, may spend $10 million per year for Wal-Mart workers' children on Medicaid, but I'll wager that Georgia residents save more than $10 million annually by shopping at Wal-Mart. What if Georgia's government made Wal-Mart reimburse it, like Maryland is trying to do? You guessed it: Wal-Mart would pass it onto its customers.

"Some of Maryland's Wal-Mart workers make so little that they qualify for such poverty programs." Here is the sob story about Wal-Mart workers earning just $19,142 a year and trying to support a family of four. What is to prevent the other parent from working so that the family need not rely on one income? Oh, and the calculation is incorrect. Let's look again. "The average wage for full-time sales associates in Maryland is $9.97 an hour, and full-time workers at Wal-Mart put in from 34 to 40 hours a week, Hurst said. At that rate, an employee working 40 hours a week earns $19,142 a year..." Nope, that's still wrong. At $9.97 per hour for 40 hours per week, that's $398.80 per week, and $20,737.60 in one year (52 weeks). Even if we assume two weeks of unpaid leave, that's still $19,940 -- so how the hell did Hurst do the calculation?

"Wal-Mart officials have said their company is living up to its responsibilities to provide adequate health care coverage to workers." I am always saddened when a company is pressured into bowing to political correctness and progressive ideology. While healthy workers are desirable, a company's responsibility is still to maximize profits for its owners. Anything else becomes altruism, not business.

With the rising cost of health care, Wal-Mart workers should be glad that they work for a "big business" that is routinely demonized for driving out competitors by aggressive price negotiations. It's that same gigantic scale of operations that enables Wal-Mart to offer what are actually pretty good health insurance benefits at more than reasonable prices. But Wal-Mart is not offering that out of altruism, but out of self-interest. That is what it determined is the balance between attracting employees, retaining healthy employees, and employee compensation.

Insured people ignore that they themselves are a big reason, if not the reason, that health care costs keep going up. Several weeks ago at work, I overheard a couple of movers, just a couple of blue-collar guys we hired to take care of our heavy stuff. One of them said of scheduling a few medical appointments, "If you've got coverage, you might as well use it." I thought about pointing out a few things but didn't expect he would understand. Did he ever consider that by using up all of his coverage, his insurance premiums will go up to match? This isn't catastrophic insurance we're talking about, where actuaries determine risk and probability. Insurance is no longer "insurance" in the proper sense when it's used to pay for regular health-related expenses. It's like paying your mechanic a certain amount each month for regular maintenance: if he offers a plan for $2000 of service a year, and you tend to use all of it, don't expect to pay just $100 a month.

But with all this discussion about the dynamics of insurance and what a business' responsibilities are, the bottom line is still this: if you're not getting paid "enough," that implies you're worth more, so why are you still there when you ought to be able to earn more elsewhere? Or will you just rationalize things by invoking God's name?


Anonymous Todd said...

I realize I have made a choice to be self-employed, but these people need to see the actual cost of insurance. Until the advent of MSA/HSA's health insurance was a major personal expense. Even now my family deductable is 5250.00 plus 20% of the next 5000 dollars. Within my family health insurance expense has always been one of the criteria examined yearly to justify continued self-employment.

Tuesday, March 07, 2006 11:10:00 AM  
Anonymous Anonymous said...

One thing to consider with regard to "25% of paycheck" is that she is probably talking about take home pay.

Tuesday, March 07, 2006 11:26:00 AM  
Anonymous Anonymous said...



Tuesday, March 07, 2006 1:17:00 PM  
Blogger Perry Eidelbus said...

Anonymous, yes, I considered she might be referring to that. One of the problems with taxation today is that withholding makes the process so transparent. People really don't know how much they're making.

Once they looked at their real paycheck, people would see government is a pretty damn big "expense," and they don't get much out of it.

Tuesday, March 07, 2006 2:04:00 PM  
Blogger TKC said...

Holy crap. I blogged about this a little while ago but I was not aware that one of the complaints is that Wal-Mart is accused of shifting health care costs of its employees to Medicare. That is one of the most disingenous complaints I've heard. Look at one of the reasons given for passing the Wal-Mart bill here in Maryland
He [James Hubbard D-P.G. County] began our conversation by pointing out that the Wal-Mart bill--which forces companies with more than 10,000 employees to spend at least 8% of their payroll on health care or pay the state the difference--was always intended to be just the first step. Four years ago, he made his intentions clear by introducing legislation to increase cigarette taxes and to use the tax code to compel employers to provide health insurance. Under his legislation the revenue from these taxes would be dumped into a new state fund that would then be used to expand Medicaid eligibility to families with incomes up to 300% of the poverty line (up from 200% now). But even in a legislature with large Democratic majorities, his bill stalled.
So the purpose of the Wal-Mart bill is, in part, to expand Medicare, but Wal-Mart is to be damned if some of its employees are on Medicare? I usually call the bill an extortion effort but it seem 'highway robbery' and 'out right lie' may fit the bill too.
If $19,000 dollars per year will get you qualified for Medicare then the goal for Maryland is make Medicare accessible to people making %300 of that or about $60,000 a year. Unfreakinbelievable that they would then turn around and complain that Wal-Mart has people on Medicare while they are trying to make Medicare accessible on a much larger scale. Again, holy crap!

link to blog entry:

Wednesday, March 08, 2006 4:41:00 PM  
Blogger TKC said...

Oops, I meant Medicaid and not Medicare. But you still get the picture.

Wednesday, March 08, 2006 5:18:00 PM  

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