Wall Street Journal Takes Wal-Mart to the Woodshed

Earlier today, we gave you a rundown on Internet reaction to Wal-Mart’s support of employee-mandated health care. Well, now yet another voice has weighed in, and this one has a fairly large pedestal.

In its Opinions section, The Wall Street Journal writes that by throwing its support behind the controversial measure, Wal-Mart may have bought itself some protection by selling out its competitors in the business community.

The employer-mandate endorsement falls into the same self-interest department. A boost in the minimum wage helps Wal-Mart because most of its workers already earn well over the wage floor, and it hurts smaller, less-profitable competitors that can’t afford to pay more. On health care, an employer mandate will also reduce the margins of their rivals. This is especially true for businesses of a slightly smaller size that cannot insure on the same scale or currently don’t reach the 55% of the 1.4 million Wal-Mart employees who are insured through the company. (Another 40% or so are covered by spouses or the likes of Medicaid.)

The piece also offers more speculation as to additional motives for the move:

Businesses are going along with this and other gambits in part because of a prisoners’ dilemma: They’re terrified of being shut out of Democratic health negotiations lest they get stuck with the bill. Wal-Mart may also be trying to pre-empt an employer mandate the Senate is considering that would target companies with predominantly low-wage, low-skilled or entry-level work forces.

Everyday Low Politics [The Wall Street Journal]

Posted by Corey Himrod on Thursday, July 02, 2009

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