Is Wal-Mart Good for America?

[Fosco33]

Agreed. The only people benefiting from WalMart are their consumers (which I am not), investors and owners. The problem I have with WalMart (and this is pointing out WalMart) is I have to pay for their employees healthcare (in part) and on a much smaller scale the social benefits of employees of the companies that couldn't compete with China, Ireland or India (at a wage differential of $0.50/hr vs $10-$15/hr w/ benefits).

Who knows - maybe WalMart choses (or is forced) to provide healthcare and better wages OR maybe they build clinics in every store for their employees. Being in the healthcare sector, I see and feel the effects of the uninsured on a daily basis. If a FTE can't support their family on a WalMart salary (at WalMart's own admission), who really benefits in the end?

[Fosco33]

Retailguy, how can we fix that problem? I think it can be contributed to the fact the american dream is no longer hard work and providing for a family, it's driving a beamer and living in orange county. Secondly, I blame unions. It's going to be even worse when my generation is grown up, everyone I know dreams of having a big house with a pool and a talk and a mercedes parked in the driveway. They are all going to school for engineering, or plan on getting an mba, or to be lawyers or doctors.

[Fosco33]

There are actually two "problems" in my opinion, Partial. First, there is a real problem with healthcare in this country. Second, some think it is Wal-Mart's fault, or other companies.

First, Fosco's Wal-Mart issue. He says that he "pays" for Wal-mart employee health care. In a way, he does. He blames this on Wal-Mart, and this is where I break company with him. I blame it on the employee who lacks the motivation to get an education, move, or lacks the desire to improve their life.

Wal-Mart is not and should not be required to provide health benefits to its employees. In the free market, they should be able to choose and they have chosen. Quite simply, they can find "suitable" employees without offering benefits. Most Wal-Mart jobs are not designed to be career paths. Some management jobs are, and they are compensated accordingly, most with GREAT benefits.

Hourly employee positions are designed to be STARTER jobs, NOT career jobs. If the employee decides to "make Wal-Mart cashiering a career", they need to accept the pay and lack of benefits that go along with it. That, and the issues that come about because of that decision (lack of retirement & healthcare) are THE EMPLOYEES PROBLEM, NOT Wal-Mart's. We all have a choice to get educated or not educated, and we as a society need to accept the fact that the days of $25/hr to be a grocery cashier with cradle to grave medical are GONE.

When Wal-Mart cannot recruit suitable employees they will change their benefit package. Until that happens, they should not be forced to offer things that they don't need to attract quality employees.

That being said, what do we do with the health care "crisis"?

Simply EDUCATE people.

When we as a society are willing to give our auto mechanic $80 per hour to fix our SUV, but FREAK OUT because the doctor wants $100 for an office visit, there is something wrong. Our perceptions are OUT OF WHACK with reality.

We need to accept that we as individuals need to PAY for quality medical care.

Benefits plans and insurance need to reflect this. An example would be an insurance plan that allows 2 - 4 visits per year at at normal co-pay, but insurance has a 1500 annual deductible with 80-20 coverage. People need incentive to THINK before they head to the doctor to get the latest "sniffle" or "scratch" repaired.

We need to focus on "preventative" medical care. We need to lower the cost of "preventative" care, and raise the cost of care for those who "plan poorly".

Socialized medicine is not the answer. I live near the Canadian border and our doctors offices are filled with Canadians crossing the border paying willingly to not wait 2 years for minor surgeries that could be done for free in Canada.

We need to stop "blaming" people, corporations, and insurance companies for the "problem" and work together for a solution.

[MadtownPacker]

Im actually going to Walmart right now! Sorry guys!

[Partial]

I don't necessarily think its good for America, but it is what it is. It's an evolution of retail and it goes to show that if someone can do something better or cheaper than you're they're going to win.

I had a discussion with some guys the other day bringing up RG's points of how Wal-Mart is making the same economic decisions we make everyday, except they do it on a large scale. It really irritates me when the self-righteous think that Wal-Mart is such a sinner for sending jobs overseas when they think it's acceptable that mindless factory jobs pay 50k a year to their employees. I understand that it costs a lot to live because of inflation and stuff, but if there lifestyle isn't up to par then they should get educated and better themselves. It is the damn unions that send jobs overseas.

[Little Whiskey]

hell ya!!! they've got a great price on ammo!! I can get a box of 100 shells for under 20 bucks!! I do however get some strange looks as i check out with 2 cases of ammo and 2 cases of beer

[SkinBasket]

I've seen more than enough trucks with "Union YES!" and "Buy American" bumper stickers in the WalMart parking lots to know that there are plenty of union types that expect everyone else to pay more for the goods they make in America to keep their own wages and benefits high in a broken labor system. Of course, they can't be held to those same standards. They want the lowest price after all.

[Partial]

I've seen more than enough trucks with "Union YES!" and "Buy American" bumper stickers in the WalMart parking lots to know that there are plenty of union types that expect everyone else to pay more for the goods they make in America to keep their own wages and benefits high in a broken labor system. Of course, they can't be held to those same standards. They want the lowest price after all.

It really is funny when you think about it.

[retailguy]

It really is funny when you think about it.

Actually, to me it is sad. See the unions indoctrinate the members as a whole with the BS that "if we all stick together" you (the worker) will win. Rarely does that happen.

We, as a society, need to accept that other countries can make things cheaper than we can. To top it off, their quality is improving also. We need to channel these workers into other industries where they can make a living. It is just progress.

Think of India today as to where the US was 50 years ago. They are making incremental gains in both their employment and there society. We can bitch and moan that the Indian woman making clothes only makes a fraction of what a US worker makes, but the true comparison is what did she earn BEFORE she had the job working for Wal-Mart, or whomever? That is what determines if her life is improving.

How we adjust to global society determines whether we will be ultimately successful. The unions sure seem to be struggling with that concept.

Oh, maybe most of you didn't know, but major US CPA firms are shipping their tax prep work overseas to India. They find it cheaper to hire foreign firms to prepare the tax return and send them electronically back to the States than to hire workers. It affects EVERY industry, not just manufacturing.

[Deputy Nutz]

I try to stay out of Walmart as much as possible, but sometimes you need a toster at 3 in the morning along with some JU-JU Fruit, so shit, you gotta do what you gotta do.

I do agree with Skin's take on the lovely union workers and supporters, but shit, the Walmart and McDonalds of the world just can't be stopped, so if you can't beat'em, join'em

[Fosco33]

It really is funny when you think about it.

Actually, to me it is sad. See the unions indoctrinate the members as a whole with the BS that "if we all stick together" you (the worker) will win. Rarely does that happen.

We, as a society, need to accept that other countries can make things cheaper than we can. To top it off, their quality is improving also. We need to channel these workers into other industries where they can make a living. It is just progress.

Think of India today as to where the US was 50 years ago. They are making incremental gains in both their employment and there society. We can bitch and moan that the Indian woman making clothes only makes a fraction of what a US worker makes, but the true comparison is what did she earn BEFORE she had the job working for Wal-Mart, or whomever? That is what determines if her life is improving.

How we adjust to global society determines whether we will be ultimately successful. The unions sure seem to be struggling with that concept.

Oh, maybe most of you didn't know, but major US CPA firms are shipping their tax prep work overseas to India. They find it cheaper to hire foreign firms to prepare the tax return and send them electronically back to the States than to hire workers. It affects EVERY industry, not just manufacturing.

I just want everyone to know - I'm not in favor of unions. In general, I support big business but also want corporate responsiblity (mainly in line of social, environmental and fiscal lines). It's not the unions that are moving jobs overseas though - it's the suppliers who can't stay in business.

There's no way to compete w/ cheap labor. And true, if the person in India/China/Ireland wasn't working for a manufacturer making $1/day they may be unemployed or making $0.50/day.

I think there's a bit of a slippery slope here. What jobs in the US are people in poorer countries capable of doing w/ the advent of a more reliable communication device - the Internet? Are these rare jobs the only ones that will be left after globalization? Will overall costs of living and wages have to be scaled back in order to compete on a global scale or will the US be forced into an even more socialist society if people can't afford to live? Does the US gov't have to subsidize all these jobs/industries in order to survive?

Seems kinda bleek to me.

Personally, my life's goal is to purchase an island w/ a group of friends and be as self sufficient as possible - I could even build a hotel and hire a ton of foreign workers and import lots of goods when people want to visit - it'll be sad if those foreign workers happen to be former US citizens.

[GBRulz]

Wal-Mart has very strict policies in place with their suppliers. If these supplies can't deliver the goods on time, Wal-Mart won't pay for them. Because the suppliers know how many people shop there, they basically bend over and adhere to these policies.

An example, the truck carrying toilet paper from P&G is 3 hours late due to traffic - Wal-mart gets the goods without paying.

That is my beef with Wal-mart - that they screw their own suppliers... not because of overseas jobs, hell everyone is doing that now a days.

I choose to stay away because I don't want to spend 30 minutes getting milk and tampons, which are on opposite sides of the store! Besides, Target is much better

[Fosco33]

Observing Healthcare
Employer Healthcare Costs and Global Market Competition: Two Solutions
By Scott MacStravic, Ph.D., for HealthLeaders News, July 6, 2006

It has been persuasively argued that U.S. employers are at a distinct disadvantage in the global market because they have to pay so much of the country’s exorbitant healthcare costs, while employers in other countries have government insurance programs for all plus lower healthcare costs. No doubt General Motors is at a major disadvantage when it has to pay $1,500 extra per car it sells to cover employee healthcare insurance, and it competes with cars from Asia and Europe that are not thus handicapped.

Many other companies, however, have used this “disadvantage” as justification for dropping or minimizing their contributions to employee health insurance even though they seem not to be handicapped like GM. Wal-Mart has become infamous for shifting costs of its employee healthcare to Medicaid and the employees, themselves; this is a retail store chain that buys in the global market, rather than selling there, so any claim of being disadvantaged doesn’t fit. But Wal-Mart’s approach is becoming increasingly popular, and is certainly one solution to employers’ global marketing handicap--or perhaps better stated, it adds to their profitability if they have no such handicap.

The second solution, one that runs counter to employers’ abandoning employee health insurance, is actually increasing their investments, but in proactive health collaboration (PHC), rather than more sickness care expenditures. Instead of waiting and paying for employees (dependents and retirees) who get sick, thousands of employers are investing in making or keeping them healthy. In effect, if other countries are more competitive at least partly because their workers are healthier, we need to have healthier employees ourselves to compete. For even if employers manage to shift sickness care costs to somebody else, they will still suffer the consequences of their employees’ unhealthy lifestyles.

Recent studies have indicated that employers lose from two to five times as much as in sickness costs for the productivity losses caused by chronic illness. [R. Loeppke & M. Hymel “Good Health Is Good Business” JOEM 48:5 May 2006 533-537] In a study at Dow Chemical Co. some chronic conditions cost over $25,000 per employee suffering therefrom, with over 90 percent of these costs related to absenteeism and presenteeism, vs. only 10 percent due to healthcare costs. [S. Nicholson, et al. “How to Present The Business Case for Health Care Quality to Employers” Applied Health Economics and Health Policy 4:4 2005 209-218]

Of course, investing in PHCs--which require employers, insurers, governments and providers to collaborate with consumers and each other to promote and protect health--will cost employers more in the short run, since they are usually also paying for their employees’ reactive sickness care. But in the long run, the purpose and demonstrated success of PHCs are reductions in the incidence and prevalence of disease, or in the case of existing chronic conditions, in the crises, complications and worsening thereof, that create the need, demand and costs for reactive sickness care.

It has yet to be demonstrated precisely how much reactive sickness care demand by consumers and expenditures by insurers and employers can be reduced compared to the trends that payors dread and providers are counting on. But estimates have ranged from 20 to 30 percent for “semi-reactive” chronic disease management alone, to as high as 80 to 90 percent if all unhealthy behaviors can be eliminated. Just the lower estimates, if achieved, would greatly improve U.S. employers’ competitiveness and profitability even if they pay part of the costs for PHCs.

But the greater impact on employers would come from reduced losses in productivity due to absenteeism and presenteeism caused by illness. If 20 to 30 percent reductions in chronic illness healthcare expenditures were accompanied by equivalent reductions in productivity losses, employers’ gains in competitiveness or profitability could be many times what reduced healthcare expenditures alone would produce.

If employers reduce their investments in healthcare, that will damage healthcare providers by reducing the revenue they gain from these sources, while making them more dependent on less reliable and more costly methods to collect from consumers. If employers increase their investments, but in PHCs--and thereby succeed in reducing the incidence and prevalence of sickness and the healthcare needs of those with chronic illness--providers will also be damaged because of significantly reduced demand for their services.

But PHCs work best when providers cooperate in payors’ proactive initiatives, or when providers operate their own. When productivity losses are many times the costs of sickness care, then employers, unlike insurers, can afford to pay providers more than the foregone sickness care revenue might cost them. At a minimum, by engaging in PHCs, providers can gain some revenue to make up for the lost sickness care revenue they will lose, regardless of who is participating in PHCs, since the cost savings that make PHCs viable are sickness care revenue losses. By participating in PHCs, providers can at least share in this new “health” revenue.

Arguably, hospitals and physicians, long committed at least rhetorically to the health of their communities and patients, should be at the vanguard of proactive health. When they compete with vendors already in this market, they have advantages of patient trust and already established relationships in many cases. Their challenge is to figure out how to enter the growing proactive health market as key collaborators, even operators of their own effective solutions, while ensuring that their costs are low enough and payments high enough to make PHCs a viable business model, as well as a far better mission-serving one than is reactive sickness care.

That is by no means a simple challenge, of course. Providers have operated in a world of extreme levels of costs and charges for decades, relying on getting enough from paying customers to pay the costs for non-paying ones. Fortunately, payors, as well as the vendors they have hired for PHC programs, have demonstrated a wide range of low-cost alternatives to the in-person visits for which providers charge so much, though often receive so little. The way has already been made smoother, if providers choose to adopt and adapt PHC methods that will enable serving the broad market at competitive costs, while retaining advantages as trusted agents for their patients.

But the strategy for providers should clearly be to strive to develop and market PHCs with employers, rather than compete with vendors for commercial insurers’ business. Insurers have long viewed providers as a major part of the healthcare cost problem, and will have some difficulty accepting providers as part of the solution. Moreover, the amounts of money that employers stand to save through maintaining and improving the health of their employees is many times the amounts that commercial insurers can save.

Any and all revenue that providers can generate through PHCs with either commercial or government insurers is entirely forgone sickness care revenue. Providers will be “cannibalizing” their sickness care revenue whenever they generate sickness care expense reductions for insurers. This may be a viable strategy for primary physicians, for example, including some specialists such as endocrinologists and cardiologists who often act as primary physicians for patients with diabetes or heart disease. But it will always involve a financial trade-off for hospitals and procedure-dependent specialists, though it will take decades for the full effects of PHCs to be felt by them.

With employers, providers engaged in or offering their own PHCs can optimize their financial results with significantly less sickness care revenue foregone compared to financial savings delivered to employers through productivity improvements. Only when the value of “health” is seen as including such productivity effects can providers optimize their own and employers’ financial health, while optimizing their patients’ health in the bargain.
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Scott MacStravic, Ph.D., is semi-retired after a 35-year career as a hospital and health system executive, a professor and consultant on hospital planning, healthcare marketing and customer relationship management. He is the author of 10 books and more than 400 articles on these subjects. He may be reached at scottmacstra@earthlink.net.

[MJZiggy]

Isn't PHC just what an HMO was supposed to be? Keep everyone healthier so you don't have to pay their grand medical expenses when they get really sick from neglecting their health. It was a nice idea until the insurance companies decided they wanted to make a big profit from it.

[the_idle_threat]

hell ya!!! they've got a great price on ammo!! I can get a box of 100 shells for under 20 bucks!! I do however get some strange looks as i check out with 2 cases of ammo and 2 cases of beer

Absolutely true---I buy all my ammo at Walmart. Only problem is, in the wake of the New Orleans disaster, the "urban" Walmarts are getting out of the guns and ammo business. Thus, no ammo at the Walmart on Milwaukee's north side. Now I gotta go to Waukesha or Menomonee Falls.