Wal-Mart Sides With Obama on Health Care

Last Updated Jul 2, 2009 1:37 PM EDT

Wal-Mart made waves with its recent announcement that it supports requiring large employers to offer health insurance benefits to their workers. Wal-Mart has long been a favorite villain for activists, and there are multiple websites dedicated to critiquing the company's actions on numerous issues, including employee health care.

Some are wowed by the company's sudden about-face -- "A kinder, gentler Wal-Mart?" one headline asked -- while others are sneering that Wal-Mart is merely trying to screw over its competitors.

Or not sneering. "I like Wal-Mart," Todd Sullivan writes at Seeking Alpha. "I shop there quite a bit. Let's not read anything into this like a sudden altruistic bent or support for the current administration's policies."

Wal-Mart provides health care to it employees. Much of the competition does not. Should they then be required to do so, the company's cost basis for its business suddenly rises... considerably.

...It is as simple as "whatever hurts your competition helps you".

As I said yesterday, I think similar logic applies to food safety legislation. The current system doesn't give much benefit to companies that choose to voluntarily invest more in food safety -- if your competitors wind up with a problem, the confused public will most likely avoid the your products as well. Stronger safety requirements would help the companies that are already doing a good job.

Anyway, regardless of Wal-Mart's motivation, the move is significant. As the Wall Street Journal described it, this is "a major break with most other large companies."

The support of Wal-Mart, the nation's largest private employer, could give momentum to one of the most-contentious aspects of legislation taking shape in Congress to fix the health system.
  • Katherine Glover