Walmart's Symbolism Won't Pay The Bills

The big business news of the moment is that Walmart, the nation's largest private employer, will extend health benefits to same-sex partners of its U.S. and Puerto Rican employees.

Aside from holdout conservatives who will hate gays until the day they die, most people agree that Walmart's move carries a lot of cultural weight. Chad Griffin, president of the Human Rights Campaign, said Walmart's embrace of same-sex couples is "a cultural signal that equality for LGBT people is the simplest of mainstream values." It is a "historic move." And Bloomberg reporters Renee Dudley and Chris Burritt suggest that Walmart's move may push other large companies to do extend their health benefits, too. "The switch after years of opposition may help tip the balance at companies such as trucker YRC Worldwide Inc. (YRCW), which is considering partner benefits for 2014, or Exxon Mobil Corp. (XOM), one of the biggest firms left without such coverage." But how impactful is this decision for workers? You can't spend symbolism.

According to Walmart, staffers who have been with the company for over a year and work at least 30 hours a week can pay $36.40 a month for the lowest quality health insurance. The company currently has 1.3 million employees, which is impressive, but many of these workers are part-timers for whom $40 is a significant amount of money. Lucas Handy, a former employee who made about $9/hour, told USA Today, "The real issue with Walmart's health care is that most of us are unable to afford the coverage." He claims he was fired for speaking out against Walmart's labor practices. The company says he was let go for nebulous "policy violations." Meanwhile, Bloomberg reported in June that about ten percent of Walmart workers -- up from 1% two years ago -- are temporary hires contracted for 180-day periods and then forced to reapply. These men and women do not get benefits.

But back to the full-time and part-timers who do get benefits, who are offered the $36.40/month deal. Walmart is increasingly paying them with pre-paid cards that federal watchdogs and investigators say save employers money at the employee's expense. From the New York Times:

"...In the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.'s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.

"These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators."

In explaining its same-sex partner decision to the press and its employees, Walmart cited the end of DOMA, a Supreme Court decision that's creating a hodge-podge of marriage laws. "[This is] a business decision, not a moral or political decision," read an internal Walmart memo. "By developing a single definition for all Walmart associates in the U.S. and Puerto Rico, we are able to ensure consistency for associates across our markets." And President Obama's Affordable Care Act is also part of the equation. "The Affordable Care Act (commonly referred to as "ObamaCare") inextricably linked health insurance with employment. As such, for our associates for whom we offer health insurance, we want to be sure we are providing access to as many individuals and their families as possible," read the memo first published at Towleroad. According to Walmart, their decision "appeals to the contemporary workforce."

But this is not Walmart embracing same-sex couples or even leading the way. Sixty-two percent of Fortune 500 companies already have same-sex benefits. This is just Walmart making a symbolic business decision under political pressure, a decision that earns them lots of good will but may ultimately hurt its employees in the long run. If Walmart really cares about same-sex couples, they would lend their weight to the ongoing battle for full equality, which they have not. In fact, Walmart CEO Mike Duke has done the opposite: he signed a 2008 petition to stop same-sex adoption in Arkansas.