Key Quotes from the Secret Wal-Mart Memo

ON ASSOCIATES … Chambers wrote, "Most troubling, the least healthy, lease productive Associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart." [Wal-Mart Secret Memo, Page 4, http://walmartwatch.com/memo; New York Times, 10/26/05]

ON SPOUSES … Chambers wrote, "Decrease cross-subsidization of spouses through higher premiums or other charge. Spouses are by far the most expensive plan members to cover, and Wal-Mart pays more per spouse than per Associate." [Wal-Mart Secret Memo, Page 6, http://walmartwatch.com/memo; New York Times, 10/26/05]

ON CHILDREN … Chambers wrote, "We also have a significant number of Associates and their children who receive health insurance through public-assistance programs. Five percent of our Associates are on Medicaid compared to an average for national employers of 4 percent. Twenty-seven percent of Associates’ children are on such programs, compared to a national average of 22 percent. In total, 46 percent of Associates’ children are either on Medicaid or are uninsured." [Wal-Mart Secret Memo, Page 6, http://walmartwatch.com/memo; New York Times, 10/26/05, emphasis added]

ON "UNHEALTHY PEOPLE" … Chambers wrote, "A healthier workforce will lead to lower health insurance costs, lower absenteeism through fewer sick days, and higher productivity. It will be far easier to attract and retain a healthier workforce than it will be to change behavior in an existing one. These moves would also dissuade unhealthy people from coming to work at Wal-Mart. Even a healthier workforce could result in significant savings: $220 million to $670 million in FY2011." [Wal-Mart Secret Memo, Page 10, http://walmartwatch.com/memo; New York Times, 10/26/05, emphasis added]

ON HEALTH SAVINGS ACCOUNTS … Chambers wrote, "Move all Associates to ‘progressively designed’ consumer-driven health plans to help control cost trends while allowing Associates to build up savings in Health Savings Accounts. … The primary reason for making this transition would be to reduce future benefits costs, and those savings would be significant: $400 million to $700 million in FY2011, all from reduced trend." [Wal-Mart Secret Memo, Page 9, http://walmartwatch.com/memo; New York Times, 10/26/05, emphasis added]

ON BANKRUPTCY … "On the Family plan, an Associate must spend between 74 and 150 percent of household income on healthcare (approximately $13,000 to $27,000) before insurance takes over completely. Though few associates reach this level of spending, those who do almost certainly end up declaring personal bankruptcy" [Wal-Mart Secret Memo, Page 6, http://walmartwatch.com/memo; New York Times, 10/26/05]

ON RETIREMENT SECURITY … "Given the impact of tenure on wages and benefits, the cost of an Associate with 7 years of tenure is almost 55 percent more than the cost of an Associate with 1 year of tenure, yet there is no difference in his or her productivity…Moreover, because we pay an Associate more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart." [Wal-Mart Secret Memo, Page 3, http://walmartwatch.com/memo; New York Times, 10/26/05]

ON ITS CRITICS BEING CORRECT … "Our healthcare offering is also vulnerable to attack ...Wal-Mart’s critics can also easily exploit some aspects of our benefits offering to make their case; in other words, our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of Associates and their children on public assistance." [Wal-Mart Secret Memo, Page 5, http://walmartwatch.com/memo; New York Times, 10/26/05, emphasis added]

WAL-MART ON SHOPPING CARTS ... "Given the significant savings from even a small improvement in the health of our Associate base, Wal-Mart should seek to attract a healthier workforce. … The team is also considering additional initiatives to support this objective, including: Design all jobs to include some physical activity (e.g., all cashiers do some cart gathering)" [Wal-Mart Secret Memo, Page 10, http://walmartwatch.com/memo; New York Times, 10/26/05, emphasis added]