Maryland vs. Walmart: TANSTAAFL
The Maryland state legislature recently passed legislation requiring all businesses with 10,000 or more employees to spend at least 8% of their payroll on health care. Ostensibly, the state's goal is to reduce its Medicaid burden by requiring large employers, such as Walmart, to shoulder more of the burden. Now, assuming that Walmart does not have an endless pool of money in which to dole out more health care on its employees and continue its other operations at their current funding levels, what sort of tradeoffs is Walmart likely to make? Let me make one prediction: Walmart will reduce the wages it pays its workers in order to offset the impact of the higher health care benefits. It's not clear to me if Walmart's workers will be better off in the end. What other tradeoffs do you think Walmart (and the other large employers) will make?
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As a paragraph i found from Wal-Mart's website, (http://www.walmartfacts.com/newsdesk/wal-mart-fact-sheets.aspx#a127): "Wal-Mart provides insurance to more than 1 million people and offers up to 18 different plans. Coverage is available for as little as $11 per month for individuals and 30 cents per day for children - no matter how many children an associate has."
So, according to their words, they spend $121 on health care for one person. From another web (http://www.dfnyc.org/cms/), i found that the average wage of a common sales associate is $14,787. That means, the ratio of fee of health care out of income is 8.92%, which number has already nearly 1 percent higher than the order of government. So i don't think this new legislation won't bring Wal-Mart too many bad effects.
But to other corporations whose employees are larger than 10,000, this new rule will not be bad news either. In order to reach this number, they may firstly think about cutting the wages. Indeed, the new legislation just moves part of the employees' income to their health care. But to the employees who need money to live in this expensive world, more money on health care and less income cannot help them be betteroff but only worse.
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