Wal-Mart, union push universal health care

World's largest retailer, together with service employees' union, others, calls for universal coverage.

By Parija B. Kavilanz, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- In a partnership of unlikely allies, Wal-Mart's CEO, other corporate leaders and the head of the Service Employees International Union (SEIU) called Wednesday for universal health care coverage for all Americans by 2012.

During a news conference in Washington, the group announced the formation of a coalition called "Better Health Care Together" and listed several objectives. They included achieving "quality, affordable health insurance coverage" for every American and "having businesses, governments, and individuals all contribute to managing and financing a new American health care system."

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Strange bedfellows? Wal-Mart CEO Lee Scott and Service Employees International Union (SEIU) head Andrew Stern join forces in a bid to reform health care.
What do you think of Wal-Mart's call for universal health care?
  • It's just PR
  • It's a good first step
  • Too soon to tell

The coalition members, which also included former Reagan administration chief of staff Howard Baker and John Podesta, former chief of staff to President Bill Clinton, pledged to convene a national summit by the end of May to recruit other leaders from business, labor, government and nonprofit organizations.

Other companies represented at the news conference were Intel (up $0.20 to $21.51, Charts) and AT&T (down $0.35 to $37.16, Charts).

"Wal-Mart is committed to high quality, affordable and accessible health care. But our current system hurts America's competitiveness and leaves too many people uninsured," Wal-Mart CEO Lee Scott said during the conference.

The event was monitored via webcast in New York.

"Government alone won't and can't solve this crisis," Scott said. "We have to work together - business, labor, government and our communities. We also need to empower people to take more responsibility and more control over their own health care.

"By following this campaign's principles we can slow the growth of health care costs in this country and guarantee the uninsured access to good health coverage," he added.

But Scott was ambivalent when asked whether Wal-Mart plans to increase health care spending as part of its intention to expand coverage to all its workers.

"We're joining this coalition to move health care forward ... to implement changes by 2012. The costs will be what they are," he said.

According to Wal-Mart, the world's largest retailer and the largest nonunion private sector employer in the country currently provides health care coverage for about 47 percent of its 1.3 million U.S. employees.

Unions divided

Wal-Mart (Charts) remains a lightning rod for critics, who say that the company provides inadequate healthcare coverage for its workers, thereby forcing taxpayers to pick up the burden of health care costs for those that are uninsured.

"My headline for this healthcare campaign would be 'Wal-Mart jumps on the big government bandwagon,'" said Michael Cannon, director of health policy studies with Cato Institute.

"So much of this is self-congratulatory puffery from Wal-Mart. What Scott is saying is a serious misunderstanding of how the healthcare system operates," he said. "The government and corporations don't bear the cost of healthcare. Only workers and consumers do."

Watchdog group Wakeupwalmart.com, which is funded by the United Food and Commercial Workers Union, continues to be critical of Wal-Mart's labor, pay and health care policies.

In fact, the group's spokesman, Chris Kofinis, told CNNMoney.com ahead of the announcement that he regarded the proposal as another "publicity stunt" by Wal-Mart.

"Lee Scott will say that Wal-Mart supports the goal of universal health care in the future but we don't expect him to say that Wal-Mart is immediately changing its own health care plan to provide coverage to all its employees," said Kofinis.

UFCW spokeswoman Jill Cashen said the union was aware of the discussions between Wal-Mart and the other coalition members but decided not to join the partnership.

A statement from UFCW released after the news conference said the group felt "it is not appropriate to take the stage with a company that refuses to remedy its mistreatment of workers, among other irresponsible practices."

"Wal-Mart is actually decreasing health care coverage to employees and facing the largest gender discrimination case in the history of this country. Wal-Mart is changing its public posture, but it also needs to change its actual corporate practices. And that practice begins with taking responsibility for its own employees," the statement said.

However, SEIU chief Andrew Stern told the gathering that despite his opinions about Wal-Mart's policies, he was supporting the proposal and ready to work with Wal-Mart.

"I am also here for America's, and our children's, future," Stern said. "Health care is no longer just a moral crisis. It has become an economic crisis as well. More people went to work today in retail than in manufacturing. It is time to admit that the employer-based health care system is dead. It is a relic of the industrial economy," he added.

"American business by 2008 will pay more for health care than they will make in profits. That is untenable," Stern said.

Said Cato's Cannon: "I am an irony junkie. The unions attack Wal-Mart because they say its healthcare policy forces a lot of employees on to government health programs. Now it seems Wal-Mart wants even more employees to be on government programs. But all of a sudden, unions love Wal-Mart."

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.