Walmart is Now More Progressive Than 32 U.S. States, But That's Not Saying Much
On August 26, the world's largest retailer — known primarily for its cheap prices and consequently poor working conditions — sent out postcards detailing five changes to its health insurance policy, including one that many lauded as progressive: the inclusion of same-sex spouses and partners in benefits in the United States and Puerto Rico.
In 2014, as long as they've been in an exclusive relationship for at least 12 months and plan to keep sharing a household, qualifying Walmart employees and their spouses or partners of the same or opposite gender will all have access to the same benefits.
That makes one aspect of Walmart more progressive than the governments of 32 states, where, according to the National Conference of State Legislatures, state employees cannot obtain benefits for same-sex partners. It's really not that surprising when many of those states also lack statewide laws prohibiting discrimination on the basis of sexual orientation, and have countless examples of public employees who were fired or had job offers rescinded for being gay.
But, LGBT community and allies don't get too excited.
Not only is comparing a massive private employer to state governments — especially when the private company had a 2012 profit of $16,999,000 and many state governments are in massive debt — like comparing apples to oranges, this also isn't Walmart setting some kind of precedent. Senior vice president of benefits Sally Welborn acknowledged that in an internal memo unearthed by gay news blog Towleroad, where she wrote, "Many companies, including most of our competitors, already offer spouse/partner benefits to their employees." According to the Human Rights Campaign, 62% of Fortune 500 companies provide domestic partner health insurance benefits to their employees, and eight of the Fortune 10 do the same. Until Monday, only Exxon and Walmart, the top two companies, didn't.
Like many of those before them, Walmart made it relatively clear that the inclusion of same-sex partners was strictly a business decision. In that same memo, Welborn explained the move was made "in order to remain competitive in terms of attracting and retaining great talent to our company."
In addition to that, with the recent downfall of DOMA, "federal laws governing employee benefit plans will require companies to treat employees' same-sex and opposite-sex spouses equally for purposes of the benefits extended to spouses" in states that recognize same-sex marriage. As the ruling's effects continue to play out — and as more states begin to recognize same-sex marriage — it's possible that employers providing benefit coverage only to opposite-sex spouses will face legal challenges under federal discrimination law. So, rather than being progressive, perhaps Walmart is merely protecting itself from future lawsuits.
And, according to Reuters, just more than half of Walmart’s 1.3 million U.S. employees use its health insurance, which also means hundreds of thousands do not. To even qualify for Walmart's plan, part-time employees must work at Walmart for at least one year and maintain an average of 30 hours per week. There's a catch: After the passage of the Affordable Care Act in 2010, Walmart joined the large number of businesses hiring far more part-time employees than full-time, as well as cutting workers' hours to just under 30 per week, in order to avoid having to offer them the coverage that will be mandated by the law in 2015.
Although many qualifying Walmart workers are millennials or senior citizens that may be covered under a parent's insurance or Medicare, respectively, many others who don't opt into Walmart’s plan likely can't afford it. In 2011, family coverage cost as low as $32.70 every two weeks, or $850.20 per year, but the plan had a high annual deductible of $4,400. Also in 2011, IBISWorld determined Walmart sales associates — of which there are far more than managers — made an average wage of $8.81, or about $13,743 annually before taxes. Without even incorporating taxes, the deductible alone is more than 30% of what the average employee makes.
As one commenter wrote in regard to ThinkProgress' story about the benefits, "What good is a 401K when you have no money to put in it? What good is insurance if you can't get their catastrophic insurance unless you've worked there over a year AND can afford it?"
So, while Walmart’s latest move provides benefits more progressive than those offered by 32 state governments, they're only available to some of its employees, and they were only enacted for business reasons. Sure, the move is still good for LGBT community members who can afford it, but to praise Wal-Mart for being a progressive company is more than a stretch.