California voters narrowly reject proposition to force health care benefitsNo matter who occupies the White House, America must eventually face a larger trend and a question that is provoked by Wal-Mart in state after state. Will America be a low-cost, low-wage, no benefits nation? Or will the states demand that large companies offer such benefits to their employees, and thereby shrink their profit margin?
That question is at the heart of a disturbing article published by The New York Times Sunday. The Times reported that states such as California and Washington are confronting Wal-Mart about its unwillingness to pay health care costs for employees. California voters Tuesday voted on Proposition 72, that would have forced big employers like Wal-Mart to either provide affordable health insurance to their workers or pay into a state insurance pool. Backers of the measure said that Wal-Mart employees without company insurance are costing California's state health care programs an estimated $32 million a year. The measure failed.
The Times reported that, "a survey by Georgia officials found that more than 10,000 children of Wal-Mart employees were in the state's health program for children at an annual cost of nearly $10 million to taxpayers. A North Carolina hospital found that 31 percent of 1,900 patients who described themselves as Wal-Mart employees were on Medicaid, while an additional 16 percent had no insurance at all."
This is the dark side of the world's leading discounter, and it is the dark side of an economic obsession with low prices. Wall Street loves Wal-Mart's profits, which outpace those of Costco, for instance. But taxpayers are effectively paying for Wal-Mart's profits. And low prices don't help the workers who are impoverished.
Henry Ford had it right when he paid his assembly line workers enough to purchase his automobile. America needs an updated version of that sensibility.
Craig Cole, CEO of Brown & Cole Stores of Washington, captured America's predicament when he told The Times, "Socially we're engaged in a race to the bottom."
All of this has great relevance to the moment that Wal-Mart comes calling to locate a store in a county or a city.