Case Analysis Report
Wal-Mart Health Care Dilemma
There have been some concerns about Wal-Mart’s treatment of its employees, suppliers, the environment, and the overall economic impact on communities. Wal-Mart has been criticized by some community groups, women’s rights groups, grassroots organizations, and labor unions, specifically for its extensive foreign product sourcing, low wages, low rates of employee health insurance enrollment, resistance to union representation, sexism, and management efforts to pressure employees to vote for specific parties during national elections. Wal-Mart, one of the world’s largest retailers, has the reputation of paying its employees poorly, along with providing inadequate and unaffordable healthcare plans. The Bentonville, Arkansas based retailer is the largest private employer, yet the employees are not treated as the number one priority.
Wal-Mart gets the maximum amount of work from its employees and in return, employees were rewarded with high-end rates for insurance and low wages for their time. By keeping unions at bay, Wal-Mart keeps its wages low, even by general industry standards. According to Representative George Miller (2004),
The average supermarket employee makes $10.35 per hour. Sales clerks at Wal-Mart, on the other hand, made only $8.23 per hour on average, or $13,861 per year, in 2001. Some estimate that average “associate” salaries range from $7.50 to $8.50 per hour. With an average on-the-clock workweek of 32 hours, many workers take home less than $1,000 per month. Even the higher estimate of a $13,861 annual salary fell below the 2001 federal poverty line of $14,630 for a family of three. About one-third of Wal-Mart’s employees are part-time, restricting their access to benefits (p 4).
These low wages, to say the least, complicate employees’ ability to obtain essential benefits, such as health care coverage. According to “More of the Same”