Last Thursday, the Maryland legislature overrode Governor Robert Ehlrich’s veto and passed a bill requiring Wal-Mart stores to offer affordable insurance to its estimated 17,000 employees, setting a precedent for other states.
The “Fair Share Health Care” bill will be enacted in 30 days, forcing Wal-Mart to increase spending for health insurance. Under Maryland State Law, all employers with 10,000 or more employees must spend at least 8 percent of its payroll expense on worker health care or put funds in the state Medicaid account. As of Jan. 12, Wal-Mart was Maryland’s only employer not meeting this threshold.
Due to the company’s lack of spending on health insurance, over half of Wal-Mart employees have turned to Maryland’s taxpayers to pay their Medicaid expenses. On a national scale, Wal-Mart insures less than half of its employees.
Before the bill was passed, Wal-Mart’s spokespeople, along with their four law firms, announced that if the bill were passed, they would not build a distribution center along Maryland’s Eastern Shore, which would employ over 1,000 workers. Despite these threats and Wal-Mart’s contribution of over $4000 to Governor Ehrlich’s re-election campaign, Maryland’s legislature puts the needs of its citizens ahead of its big business interests.
“In the best possible situation, the only difference will be that Wal-Mart will make a smaller profit, but will keep the same amount of workers with better health insurance,” Georgetown professor of economics Luca Flabbi said, a specialist in labor economics. The worst-case scenario, he said, would be a loss of jobs due to Wal-Mart’s imminent revenue loss. Another downside may be a rise in prices, he added.
Maryland’s Wal-Marts will likely not be impacted significantly enough for them to leave the state. If they do, however, there are many other potential employers in the Maryland area to move in and take their market share.
Overlooking the short-term job losses is what Governor Ehrlich, Maryland lawmakers and Wal-Mart spokespeople will be chastising consumer advocates about in the upcoming months. Thankfully, the Maryland legislature realized that employees working for minimum wage need benefits, too.
Other states are already following in Maryland’s footsteps and reigning in the bloated commercial giant. Bloomberg News announced last Thursday that a Pennsylvania judge ruled in favor of Wal-Mart employees over a lawsuit stating that Wal-Mart has been forcing employees to work before and after punching in.
Consumer advocates believe that similar health care bills will appear in other states within a short period of time. Though Maryland State Senator E. J. Pipkin, a Republican, believes that this bill is an “anti-jobs bill,” it should be looked at as a bill set to raise the standard of living and health among employees of a socially irresponsible megacompany.
