California Bill Mimics Maryland Law Targeting Wal-Mart

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The New York Sun

Wal-Mart Stores Incorporated and other large companies operating in California would be forced to spend a minimum amount of money on health care for employees in the most populous American state under a bill to be proposed this week.


The California bill, to be introduced by Democratic State Senator Carole Migden, is modeled after a Maryland law adopted last month. It would require companies with 10,000 or more workers in California to spend at least 8% of their total wages on health care or reimburse California’s state-run medical program by a similar amount, an aide to the senator said.


“When you talk to people they feel that a company as large as Wal-Mart, pulling in something like $10 billion a year, should be providing health care for their employees,” the aide, deputy chief of staff Eric Potashner, said.


Wal-Mart, the world’s largest retailer and the second-largest corporation by sales, has faced scrutiny over its employment practices as officials across America seek ways to cope with the rising ranks of those without health insurance. Ms. Migden’s office said the bill would require Wal-Mart, with 70,000 California employees, to spend at least $50 million a year for employee health care.


More than two years ago, California passed a more comprehensive law making health insurance coverage mandatory, only to see it overturned by voters in 2004 after companies including Wal-Mart and McDonald’s Corporation funded a campaign to defeat it.


Shares of Wal-Mart, which had income of $11.2 billion in the year that ended last month, rose 4 cents to $45.78 at 2:03 p.m. New York time in trading on the New York Stock Exchange.


California Governor Arnold Schwarzenegger, a Republican, supported overturning the previous health care law and has vetoed measures that would raise the cost of doing business in the state. He vetoed a bill in 2004 that would have required retailers to study the economic impact before they could open stores bigger than 130,000 square feet, such as Wal-Mart’s so-called supercenters. Democrats control both houses of the California legislature.


A message left for a Wal-Mart spokeswoman in California wasn’t immediately returned. The Bentonville, Arkansas-based company criticized the Maryland law, saying it was a unionsupported and politically partisan measure that would do little to remedy the problem of uninsured residents in the state. Wal-Mart, on its Web site, says it provides health insurance to more than 1 million people.


Backers of the California bill, which Ms. Migden plans to submit by the February 24 deadline for new bills, planned a rally in Oakland this afternoon. Mr. Potashner, the aide, said the bill would affect 69 employers in California, though some of those already spend the minimum required under the bill.


“Many of those already provide health insurance,” he said. Wal-Mart is “the poster child for this, but it would affect other companies,” he said.


A study by researchers at the University of California, Berkeley Labor Center published in 2004 found that employees of Wal-Mart cost the state $86 million a year in public assistance such as food stamps, including $32 million in health-care-related expenses.


The New York Sun

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