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10/26/2005

Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs

Source: Wake Up Wal-Mart.Com

From NY Times 10/26/05 Story:

An internal memo sent to Wal-Mart's board of directors proposes numerous ways to hold down spending on health care and other benefits while seeking to minimize damage to the retailer's reputation. Among the recommendations are hiring more part-time workers and discouraging unhealthy people from working at Wal-Mart.

In the memorandum, M. Susan Chambers, Wal-Mart's executive vice president for benefits, also recommends reducing 401(k) contributions and wooing younger, and presumably healthier, workers by offering education benefits. The memo voices concern that workers with seven years' seniority earn more than workers with one year's seniority, but are no more productive.

To discourage unhealthy job applicants, Ms. Chambers suggests that Wal-Mart arrange for "all jobs to include some physical activity (e.g., all cashiers do some cart-gathering)."


The memo acknowledged that Wal-Mart, the world's largest retailer, had to walk a fine line in restraining benefit costs because critics had attacked it for being stingy on wages and health coverage. Ms. Chambers acknowledged that 46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid.

Statement by Paul Blank, campaign director, WakeUpWalMart.com:

An internal Wal-Mart memo, released by the New York Times this morning, exposes what a farce the last two days have been. Wal-Mart’s CEO had the gall to come out this week and try to spin Wal-Mart as a company changing. Wal-Mart is not a company trying to change. Today’s memo proves Wal-Mart’s announcements are nothing more than a publicity stunt by exposing the truth behind Wal-Mart’s culture of greed and moral corruption.

The memo, authored by Susan Chambers, Executive Vice President for Benefits, robs Wal-Mart workers of their human dignity and instead treats them like products in their stores. It is simply appalling that Wal-Mart’s senior management would actually write a memo suggesting not to hire certain workers because they may be unhealthy or obese.

Most startlingly, Wal-Mart, for the first time, admitted there is a Wal-Mart health care crisis in America. The memo specifically states, ‘Wal-Mart has a significant percentage of associates and their children on public assistance.’ In fact, Wal-Mart revealed 46% of the children of Wal-Mart employees are either uninsured or on taxpayer funded public health care programs. No wonder Wal-Mart so vehemently opposes legislators’ efforts to expose the truth about the true cost of the Wal-Mart economy. It is inexcusable and unconscionable for a company, with $10 billion in profits, to know 1 out of every 2 of their employees’ children has no health care or is forced to rely on our public safety net and do nothing about it.

The key question becomes: What else does Wal-Mart know and when will they reveal it? Wal-Mart’s great American deception of the past two days will not stand and Lee Scott ought to be ashamed of himself for perpetuating such a fraudulent image to the American people.”

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