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Despite threats from the National Retail Federation, Target and Kelly Services are open to supporting an employer mandate on health care.

After Wal-Mart, Center for American Progress, and SEIU sent a letter to President Obama on June 30th expressing support for health care reform, many retailers were shocked by Wal-Mart’s show of solidarity with the labor movement on a contentious issue. However, some retailers began to realize that if Wal-Mart thinks it’s ok to support this, maybe we should think about it as well. When Wal-Mart leads, others will most certainly follow.

Over the years, we have implored Wal-Mart to use its power and influence for the greater good. Whether for health care reform, the Employee Free Choice Act, or wage increases, Wal-Mart can really make a difference if it wants to make the effort. Nevertheless, it’s sad that it took Wal-Mart over four years—with a hard push from organized labor—to realize it can make positive changes in this area. Wal-Mart is making the right choice by working with labor unions towards a goal of providing health care for all Americans.

But we hope Wal-Mart doesn’t think this is all it has to do to become a responsible company.  There is a lot left on the table, like its opposition to the Employee Free Choice Act, tax avoidance schemes, environmental destruction, deliberate efforts to destroy small businesses, and exporting jobs overseas. Supporting health care reform is definitely a step in the right direction but Wal-Mart still has a long way to go.

Target, Kelly Services May Back Mandated Health Care [Bloomberg]

July 14 (Bloomberg)—Target Corp. and Kelly Services Inc. said they may support Wal-Mart Stores Inc.’s call for mandatory medical insurance by large companies as part of a proposed overhaul of U.S. health care.

“Conceptually, we can accept an employer mandate,” said Kay Rubbelke, a spokeswoman for Minneapolis-based Target, the country’s second-biggest discount retailer after Wal-Mart.

Kelly Services, the Troy, Michigan-based provider of temporary workers, could support a mandate that has effective cost-containment provisions, said Jim McIntire, vice president of public affairs.

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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]

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Here are what the voices on the Internet are saying about Wal-Mart’s support of employer-mandated health care...not surprisingly, it hasn’t taken long for most to deduce that Wal-Mart is hardly acting in an altruistic way.

Number one on Wal-Mart’s hit list? Easy. Target. Because small businesses would either be exempt from the mandate or face a less-strenuous requirement, it would be Wal-Mart’s large competitors (and more specifically those who have to this point been better at managing health care costs than Wal-Mart) that would feel the brunt of the hurt.

Jonathan Cohn at The New Republic:

I don’t want to make too much of this: Wal-Mart may chicken out once the specifics of an employer mandate end up on the table. Even if they don’t, they may not lift a finger to help. And, make no mistake, Wal-Mart is acting--as it always does--out of pure self-interest.

My undestanding is that, after all of these years, Wal-Mart has suddenly found itself in the same situation its competitors once did: Dealing with unpredictable health costs and facing new competition from businesses that have found ways to spend even less on employee health benefits. Is there some justice there? You bet.

Reihan Salam with the National Review:

There is another way of looking at this. As a large, powerful, deep-pocketed firm, Wal-Mart can sustain regulatory burdens that mom-and-pops and new entrants can’t. And so burdensome regulations are invariably Wal-Mart’s ally. Jonathan Rauch explained this dynamic brilliantly in his book Government’s End. It makes perfect sense for Wal-Mart to back a regulatory initiative that hurts its bottom line as long as it hurts its competitors more.

Megan McArdle for The Atlantic:

Wal-Mart is always going to have a seat at the table when employer mandates are discussed, because Wal-Mart is the nation’s largest private employer.  Target and Macy’s probably won’t have a seat at the table.  So Wal-Mart can influence the rules in ways that benefit Wal-Mart at the expense of the competition.

Jeffrey Young in The Atlantic:

Based on the axiom that nobody in business or politics acts strictly out of altruism, it’s safe to assume that Duke and Wal-Mart’s board of directors concluded that backing the employer mandate would provide the company with some kind of competitive advantage. When I originally reported the story, it wasn’t immediately clear to me what that might be, though I suspected it must have had something to do with Wal-Mart’s calculation of how much money the mandate would cost them relative to other retailers.

Michael Cannon, for the Cato Institute:

A couple of years ago, I shared a cab to the airport with a Wal-Mart lobbyist, who told me that Wal-Mart supports an “employer mandate.” An employer mandate is a legal requirement that employers provide a government-defined package of health benefits to their workers...But it all became clear when the lobbyist explained the reason for Wal-Mart’s position: “Target’s health-benefits costs are lower.”

I have no idea what Target’s or Wal-Mart’s health-benefits costs are.  Let’s say that Target spends $5,000 per worker on health benefits and Wal-Mart spends $10,000.  An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart.  But it would cripple one of Wal-Mart’s chief competitors.

U.S. Chamber of Commerce, quoted nearly everywhere (here courtesy again, of Mr. Jeffrey Young):

The U.S. Chamber of Commerce took a pretty nasty swipe at Wal-Mart when I emailed them for a comment. Here’s the statement the Chamber’s press office sent me, attributed to James Gelfand, its senior manager for health policy: “Some businesses make the decision to use the government as a weapon against their competition. We do not agree with this method.” Ouch.

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HUGE CROWD COMES TO OPPOSE 'WILDERNESS WAL-MART' AT PUBLIC HEARING

• Opposition to Wal-Mart Near Va. Battlefield [Washington Post]
  Wal-Mart officials have a return date in Virginia to discuss their proposal to build a Supercenter near a Civil War battlefield.
  

• Public Speaks On Wal-Mart [Free Lance-Star (Va.)]
  A public hearing last night on a proposal to build a Wal-Mart Supercenter near the Wilderness Battlefield park drew a big crowd, but little noise and no vote.
  

• Orange Wal-Mart Plans Spark Debate [WCAV-TV (Va.)]
  Plenty of folks who live near the proposed Wilderness Wal-Mart are excited to see it coming; yet many others are fighting to keep it away.
  

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Is the Target board about to see real democratic change for the first time ever? Leading shareholder Bill Ackman—manager of the powerful hedge fund Pershing Square which holds a 7.8% stake in the retailer—thinks so. He’s put forth an “alternative” slate of candidates to Target’s current board, including experts from a number of industries, that he says will boost the company’s performance.

And make no mistake, Ackman doesn’t appear to be any kind of social justice saint. He’s not arguing for Target to improve its labor, environmental or human rights policies. But he is calling for something—more shareholder voice in Target’s decision-making—that has never occurred at the company’s main competitor Wal-Mart, which doesn’t even allow shareholders to nominate their own slate of candidates—only an up or down vote on a preselected set.

And we’ve documented how rushed and neglected that “vote” is at the only official chance shareholders have to get their voices heard: the company’s Annual General Meeting. During last year’s AGM, which was more circus than serious business affair, Wal-Mart shareholders overwhelmingly voted to reelect those candidates the Board itself picked, and rejected shareholder activist proposals. They also rubber stamped Walton family son-in-law Greg Penner into the Board. Key factors influencing this vote were:

1) According to the proxy ballot, If a shareholder doesn’t check the appropriate boxes or leaves the entire ballot blank, what the Board recommends wins
2) Those most likely to vote are those present at the AGM, and most of them are hand-picked Wal-Mart loyalists
3) Speakers for the activist proposals were limited to a few minutes each

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COALITION OF INVESTORS SPEAKS OUT FOR EMPLOYEE FREE CHOICE

• Social Investment Funds Back Labor Union Organizing Measure [Bloomberg News]
  A group of mutual and pension funds that invest in social causes is urging Congress to support legislation that would make it easier for workers to join unions.
  

• Leaders in Investment Community Speak Out for Employee Free Choice [AFL-CIO Now Blog]
  A coalition of investors, representing nearly $400 billion in assets, has stepped forward to say the Employee Free Choice Act is the right move right now to protect workers and strengthen the economy.

SEIU HEAD ANDY STERN SAYS EMPLOYEE FREE CHOICE 'ALIVE AND WELL'

• Stern: 'Card Check is alive and well' [Politico]
  "Card check is alive and well," Stern said, adding of Arlen Specter, "if he’s red on card check, I couldn’t get my members to vote for him. That’s like being against universal health care."
  

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$2 MILLION GETS WAL-MART OUT OF CRIMINAL CHARGES IN DAMOUR CASE

• Wal-Mart Pays $2M to Avoid Charges in New York Death Probe [Associated Press via Insurance Journal]
  Wal-Mart agreed Wednesday to pay nearly $2 million and improve safety at its 92 New York stores as part of a deal with prosecutors that avoids criminal charges in the trampling death of a temporary worker last year.

• Legal Eagle: Wal-Mart pays up [Capital News 9-TV (N.Y.)]
  A case out of Long Island where a trampling death of a temporary employee has Wal-Mart paying up.

• Valley Stream, NY. D.A. Lets Wal-Mart Buy Its Way Out of Criminal Charges In Trampling Death [Battlemart Blog]
  On January 3, 2009, Sprawl-Busters reported that the police in Nassau County, New York had released a new plan designed to prevent the recurrence of a trampling death that took place at a Valley Stream, Long Island Wal-Mart.
  

RETAIL SALES FINALLY STEADY?

• Retail Sales, Output Probably Steadied: U.S. Economy Preview [Bloomberg News]
  Retail sales in the U.S. probably stabilized in April and factory production fell at a slower pace, indicating the economic slump may be starting to ease, economists said before reports this week.
  

WAL-MART DUKING IT OUT WITH OTHER RETAILERS FOR ONLINE SHOPPING MARKET SHARE

• Store Names Wal-Mart, Safeway, Lowes Drive Consumers to Online Shopping [Bnet Retail]
  According to ForeSee Results, Wal-Mart is an example of a retailer whose established business is driving online sales.

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Surrounded by the enemy, with a story vaguely reminiscent of Frodo’s trek into Mordor (that’s for you Lord of the Rings fans - you know who you are), Target is wading into Benton County, Arkansas, home of America’s retail behemoth. A new store is scheduled to open tomorrow right in Wal-Mart’s backyard, with seven Wal-Mart supercenters, five Neighborhood Market grocery stores and two Sam’s Club outlets located within a 25-mile radius.

Like Wal-Mart, Target has steadily slowed its store growth, a trend that may continue depending on economic conditions. Ironically enough, the demographics in Benton County appear to be a good match to the template of Target’s average customer:

“Those demographics there [in Benton County], people have slightly more income on average, discretionary, and will tend to trade up from pure discounters...” And Target “is known very well for their housewares and apparel.” The typical Target “guest,” as the company calls its customers, has a median age of 42 with a median household annual income of $60,000, said Katie Benscoter, a spokesman at Target headquarters. A third of them have children at home and just over half have a college degree.

The store could have an ace in the hole - its new manager, Chuck Simmons, started his retail career at Wal-Mart and is familiar with the area. Still, to put things in perspective, Wal-Mart currently has five supercenters and 12 discount stores within 25 miles of Target’s home office in Minneapolis. And despite prices that are within 1-2% of Wal-Mart’s markdowns, Target continues to battle the perception that it is the more expensive of the two discount retailers.

Target set to open store in Wal-Mart’s backyard [Arkansas Democrat Gazette]

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