Maryland Vote Hits Wal-Mart

Maryland legislators voted Thursday to enact a first-in-the-nation requirement that Wal-Mart Stores Inc. spend more on employee healthcare. The measure, touted as a money-saver for the state-supported Medicaid program, takes effect despite the governor’s veto of the bill.

Labor unions have said they are seeking similar legislation this year in at least 30 other states. Supporters say the retailing giant unfairly takes advantage of taxpayer-funded healthcare plans because some workers can’t afford Wal-Mart’s health insurance.

“The taxpayers are giving a healthcare subsidy to the largest retailer on Earth,” Democratic delegate Kumar Barve argued. The House and Senate, both controlled by Democrats, notched the three-fifths margins needed to override a veto last May by Republican Gov. Robert L. Ehrlich Jr.

The bill requires companies with more than 10,000 Maryland employees to spend at least 8% of their payroll on employee healthcare or pay the difference into the state’s Medicaid fund.

Currently, only Wal-Mart would meet the criteria in Maryland. The company employs about 17,000 Marylanders at more than 40 Wal-Mart and Sam’s Club stores, and about 1.3 million people nationwide.

Critics of the legislation called it a dangerous precedent that ultimately would cost jobs.

A Wal-Mart executive called the bill a poorly worded mandate for a single company. Wal-Mart spokeswoman Mia Masten said the bill “could be the beginning of a slippery slope.”

“We believe everyone should have access to affordable health insurance, although this legislation does nothing to accomplish that,” Masten said, adding that the retailer may partially pull out of Maryland if the bill becomes law.

She said Wal-Mart was unfairly singled out because of “partisan politics” and that Medicaid’s problems go beyond the behavior of one company.

The veto override had been one of the session’s most intensely lobbied, with business groups taking out print ads supporting a veto and labor groups rallying and taking out ads siding with backers of the bill.

The decision is being closely watched by labor unions and legislatures around the country.

“We expect that today’s vote will generate important momentum in many other state legislatures,” said Nu Wexler, a spokesman for Washington-based Wal-Mart Watch, which is funded by a union.

The unions have said the states they would focus on include Colorado, Connecticut and Washington.

Some Maryland Democrats had harsh words for Wal-Mart.

“Don’t dump your employees that you refuse to insure into our Medicaid system,” said the bill’s sponsor, Sen. Gloria Lawlah.

In the House, delegate Anne Healey compared Wal-Mart to a schoolyard bully. But House Republican leader George Edwards called the bill an unwarranted intrusion into private enterprise.

“If you don’t want to work for Wal-Mart, no one’s twisting your arms,” he said. “Go somewhere else and work.”