Wal Mart Backs Mandated Employer Health Insurance

Wal Mart backs political plans for mandated employer-paid health care insurance.  A few quick thoughts:

1. The article notes that this may be Wal Mart management realizing that the federal government is going to do something regarding health care, and this may be a "choose between two evils" kind of support.  Perhaps they'd rather pay for employee health insurance than have a public option.
2. Wal Mart is known for supporting the minimum wage because it hamstrings its competitors.  Mandated employer health care (Wal Mart already provides health care insurance to its employees) also has a negative effect on competitors, especially smaller ones.
3. This can also be seen as a way for Wal Mart to fight off unionization attempts.

My sense is that #2 is the dominant reason for Wal Mart's backing. 

Note also that if employers are forced to pay for health insurance, employees, on average, are probably going to see lower earmnings than otherwise.  This is because mandated health insurance contributions would substitute for other types of compensation, such as earnings, contributions to retirement funds, or some other mode of pay. 

The only way this would not happen is if the provision of health insurance made employees more productive.  If such provision did improve employee productivity and if employees preferred this type of compensation than other types of compensation, then the question is why must employer-paid insurance be mandated by government?  Wouldn't employers have an incentive to pay for health insurance voluntarily and wouldn't employees accept this type of compensation voluntarily?

Comments

[Mark S.]

You assume that people will think beyond their wallets, bank accounts and 4 walls of their homes. Not everyone is going to make the logical leap that having health insurance makes them a better employee or that being healthy makes them a better employee, thus worth more to their employer.

Many see health insurance as a 'right' that somebody else should pay for.

[Ihsuan]

On average, I think Phil is correct, in that if employers were to pay for the health insurance, some other fungible benefits will decrease for the employees, and employees will be indifferent to either choices. To arrive at this result you need not require employees make the logical leap, as you put it. Most consumers, or people in general, are very capable of weighing pros and cons without knowing any math or logical arguments, and correctly in the long run arrive at the logical conclusion, don't you think?