Union uses state in Wal-Mart fight

Health care bill marks group's first victory against retailer

April 15, 2005|By Andrew A. Green and David Nitkin | Andrew A. Green and David Nitkin,SUN STAFF

The groundbreaking legislation passed by the Maryland General Assembly this month requiring Wal-Mart to pay more of its workers' health care costs is the first victory in a nationwide effort by the Service Employees International Union to change the retail giant's labor practices.

The union doesn't represent retail or grocery workers in Maryland but has turned the state into a testing ground for its campaign to oppose Wal-Mart strategies that union President Andrew L. Stern says are driving down wages and benefits for other workers.

"Wal-Mart is the sewer pipe through which good jobs are being flushed," Stern, the union's charismatic leader, wrote last year in his anti-Wal-Mart blog.

The union, which is conducting parallel efforts in Washington state and Colorado, tackled Wal-Mart in Maryland with help from the United Food and Commercial Workers union, progressive political groups, sympathetic lawmakers - and from a Wal-Mart rival that provides more extensive health care benefits.

The bill faces a veto threat from Gov. Robert L. Ehrlich Jr. and is the object of national scorn from conservatives, including radio talk-show host Rush Limbaugh.

"This is the stuff that hurts us when we get into serious negotiations with companies who want to expand or bring business to Maryland," Ehrlich said Tuesday.

But proponents call it an important step in setting the ground rules for the relationship between business and government in the new economy.

"This is really a bill that's very much pro-taxpayer, and it's something that will benefit Maryland's families," said Stephanie Mueller, a spokeswoman for Americans for Health Care, the branch of the SEIU that worked on the bill.

The legislation requires a company with more than 10,000 employees to spend at least 8 percent of its payroll on worker health care. Otherwise, the company must pay the difference into a state fund to expand health coverage. Wal-Mart is the only firm that would be affected.

State governments typically have been quicker than the federal government to adopt new ideas. With conservative leadership in Washington, liberal groups have found success in recent years on issues such as gay rights in Vermont and medical marijuana in California.

The SEIU found a fertile climate in Maryland for its push for employee health care benefits because of previous work by the state's progressive groups and legislators.

Last year, the Maryland Citizens Health Initiative, a group seeking to help those without health insurance, proposed a tax on employers that don't provide health benefits. That idea didn't get far in the legislative process. But an effort to expand health coverage to uninsured Marylanders by taxing health maintenance organizations made more headway, narrowly failing in the state Senate.

"With the failure of that bill on the floor of the Senate last year and the failure to override the governor's veto on the living wage bill, there was a sense in the Senate that they needed to deliver on high-profile working family bills this year," said Tom Hucker, executive director of Progressive Maryland, which worked on the Wal-Mart bill.

The timing wasn't ideal. Months before the start of this year's legislative session, Wal-Mart announced it would build a new distribution center with 1,000 jobs in Somerset County - a project the company is rethinking in light of the legislation.

"You have to take a step back and call into question how business-friendly is a state like Maryland when they pass a bill that does not really even get at the health care crisis, but take a swipe at one company that provides 15,000 jobs in Maryland," Wal-Mart spokesman Nate Hurst said.

`Meaningful reform'

He added that Wal-Mart supports "meaningful reform for our health care system."

During debate on the bill, Senate Minority Leader J. Lowell Stoltzfus, who represents Somerset County, had begged his colleagues fto reconsider the measure because of the risk that his district could lose the biggest economic boost it's seen in years. Ultimately, he said, the Democrats who run the General Assembly couldn't stand up to the union pressure.

"It's a labor initiative on a national scale, and they viewed Maryland as an opportunity to begin," he said.

Sen. Thomas M. "Mac" Middleton, chairman of the Finance Committee, initially was skeptical of the bill. He said it wasn't labor pressure but the structure of Maryland's health care system that made the legislation attractive.

In Maryland, hospitals get to include in their rates the portion of costs they bear from treating people without insurance who can't pay the bills, Middleton said.

That means that people with health insurance and/or the means to pay on their own help pay the costs for those without the ability to pay. If Wal-Mart workers without health care go to emergency rooms, everyone else pays, Middleton said.

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