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Friday, January 20, 2006

Walmart, Government Employees & Other Questions

The Maryland State Legislature just passed a law requiring Walmart to pay a minimum of 8% of Walmart employees’ payroll towards health insurance for the employees.

I don’t support this type of legislation because it really targets and singles out one company. And I am just not convinced Walmart is evil though I am aware that idea is the current conventional wisdom being spread by the left-leaning political class and its grass-roots lapdogs.

But if you drill down deep enough, you will find a substantial chasm between what the state legislators are requiring of Walmart and what taxpayers “contribute” towards health insurance for state/local government employees (a group which generally includes state legislators). And few are discussing this chasm because it is not part of the news du jour.

Statistics show the average government employee is paid significantly more than the average non-government employee and their benefits cost considerably more than the average non-government employee. For example, according to the Bureau of Labor Statistics (published in USA Today on January 17, 2005):

  • The average state/local government employee is paid $24.52 per hour and gets health insurance worth another $3.82 per hour. That totals $28.34.

  • So, the state/local govt. employee’s health insurance is 16% of his hourly pay.

  • The average non-government (private) employee earns $17.23 per hour and gets health insurance worth another $1.66. That totals $18.89.

  • So the private employee’s health insurance is 10% of his hourly pay.

  • The cost of health insurance for govt. employees is more than TWICE the cost paid for the average private employee ($3.82 vs. $1.66).
As I said above, the Maryland legislation requires Walmart to pay at least 8% towards employee health insurance.

Whether you agree with the legislation or not, it is fair to ask why the legislators require only 8% when taxpayers pay 16% for its beloved government employees and private employers pay only 10%. And you may also ask why does the average government employee’s health insurance cost the taxpayers so much? Depending on how well you like the answer to that question, it could be time for a change!

(In the interest of full disclosure, I don’t have a dog in this fight. I am self-employed and pay100% of my own health insurance premiums.)

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