Wal-Mart and the Employer Mandate


Wal-Mart in West Hills, CA (wikimedia)

Wal-Mart in West Hills, CA (wikimedia)

I just wanted to briefly re-address the issue of Wal-Mart’s joint call alongside the Service Employees International Union and the Center for American Progress for an employer mandate combined with a “trigger mechanism” to control health care costs as part of an overall health reform package. Various reform skeptics have sort of pushed back against progressives touting this by observing that, hey, Wal-Mart is probably doing this because they think it will give them a business advantage.

To which one can only say: I certainly assume so! The company’s not a charity. In an interview with Ezra Klein, Wal-Mart spokesman David Tovar explains that the firm thinks these proposals “will eliminate waste and increase competitiveness,” that Wal-Mart thinks the “present system is not sustainable” and they “wanted to lend our voices to the momentum behind reform” presumably in order to help shape it. They say that “for our business, this is the right thing to do.” To speculate a bit, if I were Wal-Mart I would be concerned that a mandate of some kind is a very appealing policy option but that it might be implemented in a way that put the firm at a competitive disadvantage relative to other firms. By getting on the bandwagon, Wal-Mart can push for a mandate whose terms are relatively favorable to its own situation.

But the point for progressives is not, at the end of the day, about Wal-Mart at all. The point for progressives is that given that the name of the game is to do reform in a way that expands access and controls costs without blowing up people’s status quo arrangements (a big and somewhat unfortunate given), that an employer mandate is a very appealing policy option. As we see with the CBO’s score of the new HELP bill the inclusion of such a mandate makes the overall structure work much better—more coverage and less cost. But one worries that such a proposal will meet a solid wall of opposition from business. Now, though, it turns out that at least one very large business won’t oppose a mandate. That’s significant, not because Wal-Mart’s endorsement tells us a ton about the merits of the policy, but because it tells us that a policy with some merits may be feasible to enact.