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walmart on health care reform

Walmart has joined the Center for American Progress and the Service Employees International Union in advocating for employer mandated health care coverage. In this letter to President Obama, the three organizations ask the government to consider legislating “an employer mandate which is fair and broad in its coverage.” The alternative, they argue, are higher taxes for everyone.

Pundits are surprised by Walmart’s backing of this kind of reform because they see it as clashing with Walmart executives’ class interests. For the most part, a vast business coalition, which includes the U.S. Chamber of Commerce, has opposed employer mandated health care coverage. Matthew Yglesias notes that Walmart’s position is a significant break from the “highly ideological behavior of the business community.”

I’m somewhat skeptical of that take. Walmart, more than most businesses, stands to gain a lot from health care reform of this type. As Jeffrey Young notes, 90% of Walmart’s employees already have health care coverage of some type. The companies that would be hurt the most by an employer mandate would be smaller businesses, not the large companies like Walmart that have the benefits of scale. Walmart’s competitive advantage over smaller companies would likely cement its position as the top retailer in the country/world.

Rather than seeing health care reform as a class-driven issue, I’m more inclined to see it as an issue that fragments the business community. As Jill Quadagno’s research on the New Deal showed, business interests are rarely unified. Instead, businesses use legislation as opportunities to advance their own organizational interests. While in this case a certain segment of business interests – especially those of the small business community – may be more aligned, there is significant variation in the extent to which businesses will benefit from health care reform.

Written by brayden king

July 2, 2009 at 3:34 pm

4 Responses

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  1. I’m glad the writers on this blog get it. In my view, too many sociologists attribute business actions to class interest when they disagree with the political stance and enlightened altruism when they agree. (Similarly, people didn’t raise an eyebrow when Philip Morris backed stricter regulation of tobacco products a couple weeks ago)

    Gabriel Kolko and Gordon Tullock are nodding in agreement somewhere…

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    Josh

    July 2, 2009 at 4:35 pm

  2. Well, I have to say, its definitely a “Nixon in China” kind of move.

    At the same time, its hard not to be a bit cynical about Wal-Mart’s intentions given their prior history.

    Which of course is what makes it noteworthy: it defies expectations.

    But it is interesting to watch how people — ourselves included — are attempting to shape the interpretation of this event. The Administration wants to portray it as the beginning of a movement toward pay-or-play. The Chamber wants us to believe that it is a blunt stick with which to trounce smaller competitors. Which view you believe (if either) is shaped by your own identity and lens.

    Whats important is that its these rationalizations that will shape behavior of observers, regardless of what Wal-Mart’s actual reasons for taking this action actually are.

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    Sean Safford

    July 2, 2009 at 9:13 pm

  3. Great point Sean. I’m really interested in seeing how this move is interpreted by other businesses and policymakers in the future. The framing of Walmart’s positioning will affect how much effect it has on other businesses’ stance on health care reform.

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    brayden

    July 3, 2009 at 2:10 pm

  4. “…business interests are rarely unified. Instead, businesses use legislation as opportunities to advance their own organizational interests.”

    Such an important point!

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    Michael Bishop

    July 3, 2009 at 4:58 pm


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