[IP] Wal-Mart's strategy for holding down benefits spending
Begin forwarded message:
From: "Kobrin, Steve" <kobrins@xxxxxxxxxxxxxxxxx>
Date: October 26, 2005 3:56:13 PM EDT
To: David Farber <dave@xxxxxxxxxx>
Subject: Wal-Mart's strategy for holding down benefits spending
From the New York Times today:
“An internal memo sent to Wal-Mart's board of directors proposes
numerous ways to hold down spending on health care and other benefits
while seeking to minimize damage to the retailer's reputation. Among
the recommendations are hiring more part-time workers and
discouraging unhealthy people from working at Wal-Mart.
In the memorandum, M. Susan Chambers, Wal-Mart's executive vice
president for benefits, also recommends reducing 401(k) contributions
and wooing younger, and presumably healthier, workers by offering
education benefits. The memo voices concern that workers with seven
years' seniority earn more than workers with one year's seniority,
but are no more productive.
To discourage unhealthy job applicants, Ms. Chambers suggests that
Wal-Mart arrange for "all jobs to include some physical activity
(e.g., all cashiers do some cart-gathering)."
The memo acknowledged that Wal-Mart, the world's largest retailer,
had to walk a fine line in restraining benefit costs because critics
had attacked it for being stingy on wages and health coverage. Ms.
Chambers acknowledged that 46 percent of the children of Wal-Mart's
1.33 million United States employees were uninsured or on Medicaid.”
It is worth looking at the Times website as they have the full text
of the memo to Wal-Mart’s Board. They are very clear about finding
ways to discourage older and less healthy workers from either joining
or remaining with the company. Adding a strenuous “physical
component” to all jobs looks like an end run around anti-
discrimination legislation. But, of course, the answer is it will
result in lower prices to consumers.
http://www.nytimes.com/2005/10/26/business/26walmart.ready.html
Steve
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