Wal-Mart, Union Join Forces on Health Care

Alliance's Goal Is to Improve Coverage

Washington Post Staff Writers
Thursday, February 8, 2007; Page D01

Two once-implacable foes in the business world found common ground yesterday, at least for a few minutes, as they publicly pledged to work together for the first time to fix what they called the nation's health-care crisis by 2012.

At a news conference on Capitol Hill, Wal-Mart chief executive H. Lee Scott sat at one end of a table and vowed to put aside differences to "drive this debate forward." On the other end was Andy Stern, president of the Service Employees International Union (SEIU) and frequent Wal-Mart critic, declaring he had made a "tough choice" in the goal to improve coverage.

How this unlikely alliance came about illustrates the deepening concern that businesses, labor groups and lawmakers have over skyrocketing health-care costs. The issue has divided the nation's largest retailer and the SEIU, which founded a group called Wal-Mart Watch that has harshly criticized the company's wages and benefits. But yesterday they said they could come together under the broad umbrella of universal health care. And each realized it could not be achieved without the other's help.

"That's what makes it powerful," Stern said in a phone interview. "It's risky, and it's right."

Wal-Mart used to be noticeable for its absence from business coalitions calling for government help with the health-care crisis. As the rising cost of employee medical care staggered other large companies, Wal-Mart, which did not provide health coverage for the majority of its employees, was silent. But during a national crisis over the growing ranks of uninsured workers, Wal-Mart quickly became a target.

The barrage of criticism over the past two years by the SEIU's Wal-Mart Watch and another group, Wake-Up Wal-Mart, backed by the United Food and Commercial Workers Union, has frequently put the retailer in the hot seat. Maryland's Fair Share Health Care legislation, nicknamed the "Wal-Mart bill," was crafted with input from the unions and required large companies to spend part of their payroll on health coverage or contribute to a state fund for the poor, giving rise to similar initiatives in more than two dozen states even though the law was eventually struck down. The union groups have galvanized political and grass-roots opposition to Wal-Mart through bus tours and nationwide conference calls.

The dispute left Wal-Mart increasingly isolated, particularly as it tried to move into urban areas critical to its growth. Public outrage from Southern California to the East Coast prompted local and state governments to block the company from planting superstores in one metropolitan area after another.

"Wal-Mart has actually been defeated in metropolitan America," said labor historian Nelson Lichtenstein of the University of California at Santa Barbara. "It makes a lot of business sense for them to try to get health care off the table."

Change began in 2005 after Wal-Mart created a health-care plan with premiums of $11 per month. In a speech to the National Governors Association a year ago, Scott announced other major concessions, including reducing the eligibility requirement for part-time employees from two years to one and adding coverage for their children. But he also wanted help from government leaders and other groups to make substantive changes to the country's health policies.

The speech caught Stern's attention. He was also impressed by Wal-Mart's efforts in environmental sustainability, in which it had worked with activist groups such as the Rocky Mountain Institute and TransFair USA. He took it as a sign the retailer was committed to changing not just its reputation but its practices.

"This was a company that was willing to create partnerships with people they might not normally agree with," Stern said. "It's always important to me that people don't just say things, they do things."

In his 2006 book, "A Country That Works," Stern wrote admiringly of how Dennis Rivera, president of the New York City Health Care Workers Union 1199, "taught us a great deal about how to tango" when he sent his members to join hospital operators in persuading the New York state legislature to raise insurance reimbursement rates. While the hospitals' pleas were viewed as self-serving, the workers won over lawmakers. Those billions of dollars of reimbursements found their way into better wages and "the gold standard of benefits for the hospital workers," Stern wrote.

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