“Wal-Mart Returning To Full-Time Workers”: Obamacare Not Such A Job Killer After All
Wal-Mart, the nation’s largest employer, announced Monday that 35,000 part-time employees will soon be moved to full-time status, entitling them to the full healthcare benefits that were scheduled to be denied them as a result of Wal-Mart’s efforts to avoid the requirements of Obamacare.
While some analysts believe that the move comes as Wal-Mart is attempting to deal with the negative view many Americans have of its worker benefits program, a closer look reveals the real reason for the shift—
Wal-Mart’s business is going south due to the company’s penchant for putting politics and the squeeze on Wal-Mart employees ahead of the kind of customer satisfaction that produces prosperity over the long-term.
In fact, Wal-Mart’s unwillingness to pay most of their workers a livable wage, while avoiding enough full-time employees to properly run a retail outlet, has led to the company placing dead last among department and discount stores in the most recent American Customer Satisfaction Index—a position that should now be all to familiar to the nation’s largest retailer given that Wal-Mart has either held or shared the bottom spot on the index for six years running.
For anyone who has not been following the Wal-Mart saga, sales have been sinking dramatically at the retailer as the company has turned to hiring mostly temporary workers (those who must reapply for a job every 180 days) to staff their stores while cutting full-time employees’ hours down to part-time status in order to avoid providing workers with healthcare benefits.
The result?
Empty shelves, ridiculously long check-out lines, helpless customers wandering through the electronics section and general disorganization at Wal-Mart store locations.
This is hardly a recipe for success.
A recent description of a Wal-Mart store in Newark, New Jersey published by Bloomberg, says it all—
“Three days earlier, about 10 people waited in a customer service line at a Wal-Mart in Secaucus, New Jersey, across the Hudson River from New York, the nation’s largest city. Twelve of 30 registers were open and the lines were about five deep. There were empty spaces on shelves large enough for a grown man to lie down, and a woman wandered around vainly seeking a frying pan.”
The description pretty much sums up what you will find at the typical Wal-Mart store in the United States these days.
While the company’s trend toward temporary employees has allowed the retailer to avoid its responsibilities under the Affordable Care Act—a law that Wal-Mart publicly supported only to turn around after passage and work to avoid providing health care benefits to employees—they’ve managed to tank their store sales in the process.
Who would have guessed that a well-staffed store filled with competent and reasonably paid employees might actually have an impact on the success of a company?
Home Depot—that’s who.
According to Zeynep Ton, a retail researcher and associate professor of operations management at the MIT Sloan School of Management, in the early 2000s, Home Depot’s CEO, Robert Nardelli, moved to cut full-time staffing levels while increasing part-time employees in an effort to boost profits by trimming the expense that comes with employing full-time workers. It worked for a short while. However, as Ton notes, eventually customer service declined—and with it, customer satisfaction—leading to a severe decline of same-store sales.
Wal-Mart’s penny wise-pound foolish approach to its business was further well documented in the Bloomberg article referenced earlier where they told the story of Margaret Hancock, a retired accountant from Newark, Delaware, who has always viewed Wal-Mart as her “one stop shopping destination”.
While Ms. Hancock had, for years, been able to get everything she needed at her local Wal-Mart store, recent visits resulted in her failing to locate numerous items as the products were simply not out on the shelves and available for purchase.
As Hancock explained it, “If it’s not on the shelf, I can’t buy it. You hate to see a company self-destruct, but there are other places to go.”
And ‘go’ is exactly what Ms. Hancock did—no doubt to Wal-Mart’s competitor, Costco, a company that experienced a 19 percent increase in profits in Q2 2013 while paying its employees 40 percent more on average (the average Costco wage is $21.96 per hour) than what a Wal-Mart worker can earn. In that same quarter, Wal-Mart numbers revealed the company is going nowhere fast given its current state of operations.
So, where is all that product that once filled Wal-Mart shelves?
Oh, the goods are in the store—either in the back room or in the unopened boxes lining the aisles as they await the availability of a store clerk to get to the rather critical job of moving the merchandise from the box to the shelf where a customer can actually purchase it. But when there are insufficient numbers of store clerks available—due to Wal-Mart’s commitment to using temporary workers or busting its full-time employees down to part-time so as to avoid worker benefit—the products Wal-Mart sells stay off the shelves and unavailable for customers to purchase.
Of course, Wal-Mart’s efforts to keep its workers from earning a decent living while achieving health care benefits has created some full-time work for some.
The company now hires people to work with its employees to help them sign up for Medicaid, the government program that makes healthcare available to Americans who neither get coverage at work or are able to afford it without public assistance.
What that means is that you and I are subsidizing Wal-Mart’s poor treatment of its employees as we pay for their workers health care coverage with our tax dollars and all so Wal-Mart can feather and mask its sinking profits by allowing you and I to pay for their responsibilities, whether we shop at Wal-Mart or not.
The moral to the story?
Wal-Mart is finally learning what all American businesses who seek to avoid their health care responsibilities to employees will soon learn.
It may be a clever enough dodge to cut employees below the 30 hours per week in order to avoid the expectations of Obamacare, but the move comes at a substantial price to be paid in lost revenue and profits. Given that the entire point of business is to show a profit, it is only a matter of time before employers learn what Home Depot learned some years ago and what Wal-Mart is slowly beginning to figure out—you get what you pay for.
Cut back on employees and you will, eventually, cut back on your profits as the savings a business creates by cutting worker hours leads to greatly decreased sales as customer satisfaction disappears.
While there are no shortage of Americans who enjoy deriding the Affordable Care Act as a ‘job killer’, what will soon emerge—and sooner than you may think—is an understanding that the losses experienced by businesses that cut worker hours will far exceed whatever is gained by avoiding giving employees the healthcare benefits their families so badly require.
Don’t believe it?
Just ask Wal-Mart.
By: Rick Ungar, Op-Ed Contributor, Forbes, September 25, 2013
“Incentivizing Harmful Behavior”: Sabotaging Obamacare Is A Lucrative Endeavor For Many Republicans
To gain steam for his initiative to tie funding of the government to defunding Obamacare, Senator Ted Cruz appeared at events over the summer with the Tea Party Express, a political action committee. “Either continue funding the government without giving one more dime to Obamacare, or shut down the government,” demands Tea Party Express chair Amy Kremer.
The Tea Party Express, in turn, has sponsored fundraising drives to help “elect more leaders like Ted Cruz.”
One problem for Cruz-acolytes hoping to make their way into office? The Tea Party Express PAC has spent nearly every dollar of the $2.1 million it has raised this year on campaign consultants and fundraising fees, but not a dime in transfers to candidates or on independent expenditures. In previous years, the PAC has funneled much of its proceeds to Russo Marsh and Rogers, a Republican consulting firm in Sacramento, California.
The frantic crusade to screw up the launch of the Affordable Care Act is a sad tale in American politics. If conservatives are successful, even with a short-term government shutdown Cruz and his House GOP allies might achieve, patients will suffer. If young people fail to sign up for health insurance—the stated goal of one Koch-backed front group now airing television advertisements—more will drown under crushing debt if they find themselves in need of serious medical care. But Washington, DC, has a bizarre way of incentivizing harmful behavior, and the sabotage Obamacare campaign is not without its winners.
A set of campaign consultants and insurance agents stand to profit from confusing Americans on the eve of the healthcare reform enrollment date.
The conservative media frenzy over the defunding debate has invigorated donors to many PACs, not just Tea Party Express. The Senate Conservative Fund PAC recorded its largest-ever fundraising hauls last month, though it spends way more on candidates and on candidate ads than the Tea Party Express. Still, the Jim DeMint–linked PAC expended nearly half its coffers on administrative, research and fundraising payments this year. FreedomWorks, the RNC and the Club for Growth have hopped on the Cruz campaign to raise funds by advocating the repeal of Obamacare. For a non-federal election year, at least these PACs are doing well.
The rigid anti–healthcare reform politics of the Koch brothers is also having a stimulative effect upon a small circle of Republican consultants. Americans for Prosperity, the largest Koch-owned front, pays the traditional 15 percent commission rate on all their television buys—the latest round going to Target Enterprises, a Sherman Oaks, California-based GOP media company. And with a seemingly endless appetite for anti-Obamacare paid media and anti-Obamacare grassroots organizers, Koch makes good on its claim of being a stellar job-creator, at least for jobs in right-wing political advocacy.
The New York Times rightfully notes in an editorial that many other conservative advocacy groups, like the National Liberty Federation, have latched onto the Obamacare fight, viewing the healthcare reform debate as little more than opportunity to raise a few bucks.
The second and less noticed benefactor of some of the more malicious attacks upon healthcare reform are health insurance brokers. Health insurance brokers make a living by selling health insurance and collecting a commission for every person or group they enroll. With healthcare reform set to provide easy access to health insurance options, free of charge, many in the health insurance agent industry view the Obamacare rollout as a death sentence. In recent months, the broker industry has mobilized to erect obstacles for the dozens of community group “navigators,” organizations tapped to spread the word about how to enroll in the exchanges.
In Georgia, under influence from health insurance agent lobbyists, the state passed a law that prohibits navigators from providing advice “concerning the benefits, terms, and features of a particular health benefit plan.” Other states have thrown up licensing laws in an effort to curtail navigators from being able to do, well, anything.
The Center for Public Integrity’s Nicholas Kusnetz has done some of the most interesting investigative reporting on this side of the story, revealing that the Independent Insurance Agents and Brokers of America and the National Association of Health Underwriters have orchestrated a multi-pronged attack on Affordable Care Act navigators. The industry, which has secured anti-navigator laws in sixteen states, has poured some $7.5 million into state campaigns since 2010.
While brokers claim they seek only to ensure patients are not scammed by “unlicensed” navigators, in reality, blocking competition seems to be the primary motivation. Last month, the Independent Insurance Agents and Brokers of America released a statement endorsing an effort by Congresswoman Cathy McMorris-Rodgers (R-WA) to repeal all of the funding for the navigators programs. Notes from a lobbying association for insurance agents in California warned brokers before a visit to Sacramento: “If we don’t [lobby lawmakers] they will not think it will matter that much when they allow the unlicensed “navigators” to solicit your book of business!!”
Several community groups that had signed up to participate in the navigators program have now backed out, citing political pressure from Republican politicians. The House Oversight Committee, led by Congressman Darrell Issa (R-CA), and Republican attorneys general have harassed several navigator groups with lengthy questionnaires and other demands.
Some anti–healthcare reform activists are truly motivated by their convictions. But others stand to gain financially from making sure their fellow Americans have problems signing up for health insurance.
By: Lee Fang, The Nation, September 25, 2013
“Imaginary Armies Of Voices”: The “American People” Who Only Exist In Ted Cruz’s Head
Texas Republican Sen. Ted Cruz spoke seemingly endlessly about Obamacare yesterday and today, repeatedly demanding that Washington listen to “the American people.” But to which people exactly is Cruz listening? And is he willing to follow his own advice?
I ask because the latest New York Times/CBS News poll shows that an astonishing majority disapproves of the kind of shutdown-showdown tactics the tea party legislator is pushing in his effort to stop the Affordable Care Act. According to the Times:
Eight in 10 Americans find it unacceptable for either President Obama or members of Congress to threaten to shut down the government during budget negotiations in order to achieve their goals, according to the latest New York Times/CBS News poll. Fewer than 1 in 5 think the stalemate between Mr. Obama and the Republicans in Congress is acceptable.
These results jibe with a host of other polls showing that Americans want cooperation in Washington and don’t want a government shutdown. But that’s precisely what Cruz and House Republicans are threatening to do with their “defund” stand: shut down the government unless President Obama and Senate Democrats grant them a win by extortion that the American people – the real ones, not Cruz’s imagined armies – denied them at the ballot box less than a year ago.
And it also bears repeating that for all of Cruz’s sanctimonious blather about how Congress should be more attuned to “the American people,” he flatly opposes their will on other critical issues. As I wrote last week:
For example 86 percent of Americans support background checks for people buying guns; on immigration reform, 64 percent of Americans support the comprehensive bill that the Senate passed and 78 percent support a qualified path to citizenship for illegal immigrants. … For those keeping track at home, those figures are more impressive than the 50-something opposed to Obamacare – perhaps no one has told Cruz, Lee et al. about these judgments from “the American people?”
So which “American people” is he talking about exactly? And will he listen to the ones that exist outside of his imagination?
By: Robert Schlesinger, U. S. News and World Report, September 25, 2013
“A Fanatical Group Of Nihilists”: The Upcoming Shutdowns And Defaults Are Symptoms Of A Deeper Republican Malady
Congressional Republicans have gone directly from conservatism to fanaticism without any intervening period of sanity.
First, John Boehner, bowing to Republican extremists, ushers a bill through the House that continues to fund the government after September 30 but doesn’t fund the Affordable Care Act. Anyone with half a brain knows Senate Democrats and the President won’t accept this — which means, if House Republicans stick to their guns, a government shut-down.
A shutdown would be crippling. Soldiers would get IOUs instead of paychecks. Hundreds of thousands of federal employees would be furloughed without pay. National parks would close. Millions of Americans would feel the effects.
And who will get blamed?
House Republicans think the public hates the Affordable Care Act (Obamacare) so much they’ll support their tactics. But the fact is, regardless of Americans’ attitudes toward that Act — which, not incidentally, passed both houses of Congress and was signed into law by the President, who was re-elected with over 50 percent of the vote, and constitutionality was upheld by the Supreme Court — Americans hate even more one party using the United States government as a pawn in their power games.
According to a recent CNN poll, 51 percent of Americans say they’d blame the Republicans for a shutdown; 33 percent would blame the President. They blamed Republicans for the last shutdown at the end of 1995 and start of 1996 — contributing to Republican losses of seven out of 11 gubernatorial races in 1996, 53 state legislative seats, 3 House seats, and the presidency.
So what are Senate Republicans doing about this impending train wreck for the country and the GOP?
Senator Ted Cruz is now trying to round up 40 Senate Republicans to vote against — not for, but against — the House bill when it comes to the Senate floor next week. Why? Because Cruz and company don’t want the Senate to enact any funding bill at all. That’s because once any bill is enacted, Senate Democrats can then amend it with only 51 votes — striking out the measure that de-funds Obamacare, and even possibly increasing funds in the continuing resolution to keep the government running.
So if Ted Cruz gets his way and the Senate doesn’t vote out any funding bill at all, what happens? The government runs out of money September 30. That spells shutdown.
The only difference between the Cruz and Boehner scenarios is that under Boehner we get a government shutdown and the public blames the GOP. Under Cruz, we get a shutdown and the public blames the GOP even more, because Republicans wouldn’t even allow a spending bill to come to the Senate floor.
In truth, the fanatics now calling the shots in the Republican Party don’t really care what the public thinks because they’re too busy worrying about even more extremist right-wing challengers in their next primary — courtesy of gerrymandering by Republican state legislators, and big-spending right-wing gonzo groups like the Club for Growth.
The Republican Party is no longer capable of governing the nation. It’s now a fanatical group run out of right-wing states by a cadre of nihilists, Know-nothings, and a handful of billionaires.
But America needs two parties both capable of governing the nation. We cannot do with just one. The upcoming shutdowns and possible defaults are just symptoms of this deeper malady.
By: Robert Reich, The Robert Reich Blog, September 21, 2013
“Making The Law Look Better”: How Not To Argue Against Obamacare
One of the more talked about pieces in conservative media yesterday came by way of Forbes, and it caused quite a stir. If you missed it, the article, based on American Enterprise Institute research, said the typical American family of four should expect $7,450 in additional health care costs, all because of the Affordable Care Act.
If true, that certainly sounds problematic. With a weak economy and stagnant wages, an average household would struggle to afford those increased costs.
The problem, as Igor Volsky explained, is that the Forbes piece is entirely wrong.
To translate that number to a “typical American family,” [the AEI’s Chris Conover] took “the latest year-by-year projections, divided by the projected U.S. population to determine the added amount per person,” multiplied that result by four and voila: Obamacare will add $7,450 to average health spending for a family of four between 2014 and 2022!
One economist interviewed by ThinkProgress, the Center for Budget and Policy Priorities’ Paul Van de Water, described this calculation as one of the stupidest things he’s read in a long time and likened it to arguing that college costs will increase for a “typical” family if the federal government adopts policies that help lower-income Americans afford college educations. Yes, the nation will spend more on education if more students enroll in colleges and universities, but the “typical” student already attending college won’t; she or he will continuing paying tuition at more or less the same rate, while the newly-enrolled student will presumably benefit from some sort of subsidized tuition rate.
The same is true here. The so-called “typical” family that Conover describes already receives health care insurance through their employer. The existence of 30 million newly-insured people — many of whom will receive tax credits if they purchase insurance in the law’s exchanges — won’t do much to move their premiums in one way or another.
MIT’s Jonathan Gruber went on to Volsky, “This is a typically misleading use of data by opponents of Obamacare.”
I no longer find myself surprised by developments like these. Conservative opponents of the Affordable Care Act have been pushing easily discredited attacks for quite a while, in some cases because conservative wonks just aren’t very good, and in other cases because the right feels justified in making claims they know to be untrue.
But I’m always left with the same question: if “Obamacare” were really so awful, shouldn’t conservative criticism be a lot easier?
Much to the chagrin of the right (and to Politico), most of the news surrounding the Affordable Care Act has been pretty encouraging of late. That said, if the law’s critics want to focus on areas of concern, there are legitimate criticisms they can point to.
We’re already seeing, for example, some glitches in the Obamacare exchanges. As Jonathan Cohn explained, they’re not worth freaking out over, but if you’re a Republican desperate to shine a light on implementation problems, you can seize on something like this to advance a partisan cause.
There are also legitimate concerns about the law pushing private insurers to restrict provider options for those who get coverage through exchanges. If conservatives wanted to jump up and down about this, too, they’d at least be dealing with reality. Does it mean the law is a fiasco, doomed to failure? No. Is it a real problem worthy of attention? Sure.
But our discourse has become so stunted and unproductive that we’re instead stuck with nonsense such as the Forbes piece, which had been thoroughly debunked before close of business. (Of course, if recent history is any guide, the fact that the claims have been discredited won’t stop Republican members of Congress from repeating them on national television every day for the foreseeable future.)
Note to Obamacare’s detractors: when you cling to evidence that’s wrong, you make the law look better, not worse. If the law was as bad as you claim, you’d have real defects to point to, not made-up stuff.
By: Steve Benen, The Maddow Blog, September 24, 2013
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