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How Walmart is showing that Obamacare is working
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By Paul Waldman October 8, 2014  
Walmart announced today that as of the beginning of next year it will be dropping health insurance for 30,000 employees who work less than 30 hours per week. Many liberals will react to the news by saying that it’s just a profit-hungry corporation once again screwing over its employees. Conservatives are likely to say that this just shows what a mess Obamacare has created and why it should be repealed (and replaced with the Republican alternative, which by now should be known as GodotCare, since people keep talking about it and it never shows up).

But the truth is that this development is actually a good thing, and it shows that the Affordable Care Act is working.

Walmart isn’t the first to take this step. Other large retailers that had been offering coverage to part-timers, including Target, Home Depot, and Trader Joe’s, have dropped it as well. In some cases it was because the plans were “mini-med” insurance that covered little if anything, and were no longer permitted under the ACA’s new rules. But Trader Joe’s made the change because they calculated that with subsidies, their part-time employees could actually get more affordable insurance through an ACA exchange than through the company (and they gave them an extra $500 to ease the transition).


  
So why is this a good thing? It may involve some hassle for individual employees, as they’ll have to go to the exchange to figure out what plan to get. But most of those Walmart workers will likely come out ahead. Someone who’s earning $9 an hour working 30 hours a week at a Walmart would be making $13,500 a year. Depending on what their spouse makes and what state they’re in, they could be eligible for Medicaid and pay nothing at all for insurance, or get substantial subsidies that would make a private plan extremely affordable.

Even more significant over the long term is the fact that the more companies do this, the farther we move away from the system of employer-provided health coverage. That system is an accident of history that serves neither employees nor employers very well.

“If one calculates the hourly wage-equivalent of decent family health insurance coverage, it’s not realistic to expect employers to provide this coverage to relatively part-time, relatively low-wage workers,” public policy expert Harold Pollack of the University of Chicago told me. “The sooner we recognize this rather basic reality, the sooner we can design sensible health and labor-market policies.”

The most important thing the ACA did was provide health security for everyone. Whether you have coverage is no longer dependent on the generosity of your employer, and if you lose your job, change jobs, or set out to start your own business, you can still get covered even if you have pre-existing conditions. Now that everyone can get insurance through the government (if you’re eligible for Medicaid) or through an exchange, there’s no reason to keep the middleman of the employer.

I’m not saying Walmart should get a medal or anything — they’re just trying to maximize their profits. But this is a development that we should welcome.

Paul Waldman is a contributor to The Plum Line blog, and a senior writer at The American Prospect.

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The pay hike, which will cost $1 billion, comes as the world’s largest retailer reports a strong holiday quarter.

Wal-Mart is celebrating a surprisingly strong U.S. holiday season by spreading the wealth a bit.

The world’s largest retailer and the nation’s largest private employer is spending $1 billion to increase hourly wages for its current U.S. store associates to more than $9 per hour, or higher, beginning in April. That increase is at least $1.75 above the federally mandated minimum wage. The decision will impact thousands of full and part-time U.S. employees.

Here are some other key points from Wal-Mart’s latest earnings report.

What you need to know: Wal-Mart  WMT -3.21% , often maligned by labor advocates that have long argued the retailer can pay its employees more, is seemingly heeding that call. Even Fortune’s Stephen Gandel has argued Wal-Mart could afford to pay its employees up to 50% more without disappointing Wall Street.

Wal-Mart isn’t aiming as high as Gandel suggested, but it is certainly making a notable move with the increase. Wal-Mart said by February of next year, all current U.S. associates would make $10 an hour or more. The company is also piloting a training program to help employees move out of entry-level positions and potentially make $15 an hour and more with increased responsibilities. Wal-Mart employees about 500,000 full-time and part-time associates at its’ U.S. Wal-Mart and Sam’s Club stores.

The pay hike comes as Wal-Mart reported a strong 1.7% increase in U.S. same-store sales, a key metric for retailers. That was better than the 0.7% jump that analysts had anticipated, according to a poll conducted by Consensus Metrix.

“Our fourth quarter was the first positive traffic comp we’ve had since the third quarter of fiscal year 2013,” said Greg Foran, Wal-Mart U.S. president and CEO. Wal-Mart booted traffic during the critical six-week holiday season, resulting in strong sales of toys, home, seasonal and apparel goods. Wal-Mart completed almost 1 billion total transactions during the holiday season, including a particularly strong Cyber Monday.

The big number: Wal-Mart’s overall total revenue climbed 1.4% to $131.57 billion for the fiscal quarter ended January 31. That wasn’t as strong as the $132.28 billion projected by analysts surveyed by Bloomberg. Wal-Mart’s top line results have frequently missed Wall Street’s expectations the past few years. Per-share adjusted earnings, meanwhile, totaled $1.61 versus the $1.54 predicted by analysts.

What you might have missed: While Wal-Mart ended the year on a high note, President and CEO Doug McMillion said “we’re not satisfied.” He and the leadership team says they want to continue to improve the customer experience, in part by better integrating physical stores with the company’s e-commerce and mobile commerce business.

“We have work to do to grow the business,” McMillion said. “We know what customers want from a shopping experience, and we’re investing strategically to exceed their expectations.”

Because of the higher wages and investments in training and e-commerce, Wal-Mart expects current-year operating profit to be pressured. Wal-Mart is spending about 20 cents per share for the full year on the higher wages and associate training and educational programs. As a result, Wal-Mart sees 2016 fiscal-year profit between $4.70 to $5.05 per share with sales expected to rise between 1% to 2%, hurt by some pressure from the stronger U.S. dollar.

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Labor Secretary Horrified To Learn Some Americans Working Jobs They Do Not Truly Enjoy
NEWS IN BRIEF • Jobs • Government • News • ISSUE 51•06 • Feb 11, 2015
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WASHINGTON—Saying he fears the number may be in the thousands or possibly even millions, U.S. Secretary of Labor Thomas Perez announced at a press conference Wednesday that he was horrified to learn some Americans are currently working jobs they do not truly enjoy. “It has recently come to my attention that there are people in this very country who are not intensely passionate about what they do for a living,” said a visibly alarmed Perez, adding that he was both shocked and distressed to learn that there are individuals in nearly every economic sector whose job is not a source of immense satisfaction and who do not feel deeply privileged to have it. “As incredibly unsettling as this sounds, many of these folks will spend years, sometimes their entire career, simply going through the motions, rarely experiencing a sense of profound fulfillment after a day’s work. I cannot imagine earning a paycheck doing something other than what makes me happiest in life, but evidently that is the case for some truly unfortunate people out there.” Perez went on to say he was equally disturbed to discover that many Americans are compensated with wages that do not cover the cost of the lifestyle they always dreamed of.

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Labor Secretary Horrified To Learn Some Americans Working Jobs They Do Not Truly Enjoy

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You do realize this story was from the ONION

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Earlier this year, WalMart became one of several corporate heavyweights to lift wages for its meagerly compensated workers, around 500,000 of which are now set to receive at least $9/hour and $10/hour by Q1 2016 (that of course assumes they make it on $9 an hour for another 12 months and don’t seek out other employment by sheer necessity).

Meanwhile, as we noted earlier this month, the move by the country’s largest retailer to pay a few extra pennies to its (basically) minimum wage employees comes at a cost to the company’s suppliers because when you operate on the thinnest of margins in order to be the “low price leader,” someone has to pay for those wage hikes and you can’t pass along the costs to customers because many of your low-income patrons are operating from the same tax bracket as your low-paid employees. As such, the poor companies along the supply chain are forced to lower their prices and of course they’re going to comply because well, you’re WalMart meaning you’re your vendors’ biggest account pretty much by default. The outcome is that “while WMT (or MCD or GAP or Target) boosts the living standards of its employees by the smallest of fractions, it cripples the cost and wage structure of the entire ecosystem of vendors that feed into it, and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors.”

If that doesn’t turn out to be enough in the face of an economy which isn’t really recovering and in which low-income shoppers are constrained by lackluster (and by that we mean nonexistent) wage growth, some sacrifices may have to be made. The problem is that laying people off and shuttering stores two months after a celebrated wage hike initiative doesn’t inspire much confidence and could turn into a PR issue, but one thing you could do is get creative, and while we’re not plumbers, we do find it curious that five geographically distinct WalMart stores have been closed in the past week for “ongoing plumbing issues that will require extensive repairs.”

Here’s more from a local CBS affiliate: (use link provided to read rest of article)

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wage growth, some sacrifices may have to be made. The problem is that laying people off and shuttering stores two months after a celebrated wage hike initiative doesn’t inspire much confidence and could turn into a PR issue, but one thing you could do is get creative, and while we’re not plumbers, we do find it curious that five geographically distinct WalMart stores have been closed in the past week for “ongoing plumbing issues that will require extensive repairs.”

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The most facitating thing I found about the post above, is that joebxr actually reads zerohedge.(meant as a compliment)