From the July 1, 2009 Forbes Online
July 1, 2009
by Tevi Troy
On Tuesday the CEO of Wal-Mart, long the bête noire of the American left, issued a joint statement with SEIU head Andy Stern and Center for American Progress President John Podesta, two close allies of Barack Obama, supporting the administration's health reform efforts. The letter called for bipartisan reforms that include an employer mandate to purchase health insurance for their employees.
An odd alliance? Maybe. But when two camps eye the same goal for separate reasons, they can become unlikely bedfellows.
For the Obama administration, this announcement comes at a particularly convenient time. The president's health reform effort has hit some speed bumps, including problematic scores from the Congressional Budget Office and more vocal opposition to a government-run "public plan" than the Obama team appears to have expected.
With Congress out of town this week, the White House has been actively looking for a shot of adrenaline for their initiative. In this respect, the Wal-Mart endorsement may be just what the doctor ordered.
From Wal-Mart's perspective, the move is strategic. The carefully worded letter does not commit Wal-Mart to anything other than support of a bipartisan effort to reform health care. Nevertheless, the blessing from Wal-Mart, America's largest private-sector employer, is definitely a boon for the White House. They can now claim the support of not only a company with 1.4 million employees--or "associates," as Wal-Mart likes to call them--but also a company that for many years, fairly or unfairly, has been seen as the cause of the employed but uninsured worker phenomenon.
That reputation, however, is out of date. Wal-Mart currently claims that almost 95% of its employees are insured. It's clear the company has devoted some resources to this cause, since over the past two years the number of uninsured employees has dropped by over 40%. In addition, the 5.5% uninsured rate of Wal-Mart employees is significantly lower that the percent of uninsured Americans, which currently stands at 16.8%.
This letter is a logical move given the company's recent public relation efforts, but Wal-Mart also has a broader goal, which is to make sure that whatever health reform passes Congress does not specifically aim to hamper its business.
It has reason to worry: A few years ago, Maryland passed a law requiring mandatory coverage for employees of Wal-Mart-like stores. A federal court struck down the Maryland law in 2006, but Wal-Mart wisely wants to take no chances with a heavily Democratic Congress and an Obama-appointed judiciary that is rapidly shifting leftward.
One letter, however, does not a lifelong friendship make. Even though SEIU and Wal-Mart have been working cooperatively on their health care initiative since 2007, SEIU remains a harsh critic of Wal-Mart when it comes to other matters.
An article on the SEIU Web site from this past May blisters Wal-Mart for its failure to prevent the death of a Long Island employee who was trampled to death last November. The article, by Jason Lefkowitz, stated: "A man is dead. Wal-Mart could have--should have--prevented it. And their punishment is a paltry $7,000 fine." The blog goes on to call for passage of the "Protecting America's Employees Act," which would increase the amount Occupational Safety and Health Administration could fine employers in cases like these. That initiative is, presumably, not a top priority goal for Wal-Mart.
As for the liberal-leaning Center for American Progress, it has an added incentive to welcome Wal-Mart into polite company. While the left has shunned the corporate behemoth for years, according to its Web site Wal-Mart gives the think tank between $500,000 and $999,999. Perhaps CAP will get more than just brownie points from the Obama administration for brokering this deal.
For all parties involved, the letter was a win-win move--at least for now. Wal-Mart gets some cover from two pillars of the liberal establishment, and the White House and its allies get to claim the support of America's largest employer for a mandate that would order companies to provide health insurance for their workers.
But Wal-Mart should be careful. The left has spent many years and millions of dollars demonizing Wal-Mart, and such strong grudges don't disappear overnight. The company's supposed sins extend far beyond its lack of universal coverage for its employees, and the administration has a long wish list. Wal-Mart CEO Mike Duke may be asked to sign a lot more letters in the months ahead.
Tevi Troy is a Visiting Fellow at Hudson Institute and served as the Deputy Secretary of the U.S. Department of Health and Human Services from 2007 until 2009.
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