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View Diary: "Dead Peasants" at Wal-Mart (19 comments)

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  •  Employees & families getting screwed too (4.00)
    By a company that now has a vested interest in their death.

    Think about that for a second. They not only keep wages so low that medical care for employees' families is subsidized by our tax dollars, but if they do work one of their cheap labor serfs to death, they get a bonus.

    Wal-Mart, the home of baldfaced corporate feudalism at its finest.

    Resistance to tyranny is obedience to God.-Thomas Jefferson
    We are the resistance.

    by boadicea on Mon Apr 04, 2005 at 10:07:25 AM PDT

    [ Parent ]

    •  From the point of view of the employee (none)
      they weren't promised anything and didn't get anything.  From the point of view of Wal-Mart this is a financial transaction not an incentive to have employees die.

      Almost every employer is already indifferent economically to employees dying or not, since almost all states prohibit employees from suing employers for an individual death in the workplace, which is paid for with worker's compensation.

      But, worker's compensation and life insurance rates based on experience pretty much eliminate any windfalls for an employee dying prematurely.  If more people die, they pay more in premiums next time, so they don't make any money from it, which if fine with Wal-Mart since it didn't enter into the transaction because it cared about how many or few employees were dying or with any costs actually associated with that happening.  Moreover, Wal-Mart is in the retail business, so death rates are very low in any case.  It is right up there with office workers.  Most health and safety violations in a retail workplace cause possibly disabling injuries (like carpel tunnel and hernias) rather than death.  If Wal-Mart were a roofing company, it might be a different story.  The vast majority of Wal-Mart employees who died, died for reasons totally unconnected to their employment.

      The Dead Peasant insurance system worked for Wal-Mart precisely because there was virtually no link between individual cases and the annual insurance payout.  It really isn't all that different from Wal-Mart trying to insure the life of every man, woman and child in Cincinnati.  They did it for the taxes, and I doubt that many of the managers at a level where safety was addressed were even aware that the policies existed.

      •  The Wisconsin experience (none)
        with injuries by industry is found here.
      •  According to the Bureau of Labor Statistics (none)
        there were 343 workplace deaths in the entire retial sector in 2003 (a number which is fairly accurate since worker's compensation claims are routinely made in the event of a workplace death).  See here:

        Also, about 60% of deaths in retail are due to homicides:

        Wal-Mart with 350,000 employees makes up less than 3% of U.S. retail employment (14.89 million according to the 2004 New York Times Alamanac, hard copy).

        Thus, if Wal-Mart had 8-9 work related employee deaths per year, it would by average for the retail sector, and if it were typical 5-6 of those would be homicides.

        The incentive of managers to not be killed by homicidal maniacs pretty much outweighs any life insurance considerations in terms of how the busienss is run.

        The overall death rate per 100,000 people ranges from 80 for those age 15-24, to 964 for those age 55-64 years old.  At the low end, something like 280 Wal-Mart employees should die per year.  The reality is almost certainly higher.

        Thus, about 97% of Wal-Mart employees who die in a given year die of non-workplace related injuries.  And, even if Wal-Mart has triple the number of work related deaths of the average employer and an overwhelmining number of 15-24 year old employees (both very conservative assumptions), you still have 90% of Wal-Mart employee deaths due to non-work related causes.  I suspect that the real number that closer to 1-2% of Wal-Mart employee deaths are work related, and that less than 1% are non-homicide work related deaths.

        In short, Dead Peasant insurance by Wal-Mart is really just a form of gambling in which the odds are in its favor and the law of averages insurances that it will win.  The tax treatment, and not worker safety issues, is what drives the transaction.  That is still a gyp but the problem isn't the one commonly identified as being a problem.


        •  I see where you're coming from... (none)
          ...but there are still two problems with this argument:

          1.  If you treat your employees like galley slaves it increases the odds that you collect on these policies.  So while taking out life insurance policies on your employees is despicable and a ripoff to regular taxpayers, doing this AND working them to death at the same time is especially despicable.

          2.  The BLS can't track the number of people who have had massive coronaries at home.  I'm not even sure having a heart attack on the job would count  for these numbers.  Also, on a related note, everyone knows how good Wal-Mart is at reporting workplace "injuries."


          How can you consider shopping at Wal-Mart if you have other choices?

          by JR Monsterfodder on Mon Apr 04, 2005 at 11:59:11 AM PDT

          [ Parent ]

          •  If you work your employees to death (none)
            your mortality experience goes up, so your COLI premiums go up, so it still doesn't do Wal-Mart any good.

            Now, just to be clear, I'm no fan of Wal-Mart, and COLI is a sneaky gyp.  But, the solution to COLI abuse is to change the tax code (or even pass a tax regulation that disallows the tax benefits of this activity).  A flaw there is why it was invented, and if you change the tax code, it will vanish overnight.

            Also, while Wal-Mart isn't great at reporting workplace "injuries", the reality is that most small businesses are just as bad.

            My main beefs with Wal-Mart are:
            (1) Its one time jingoistic buy-American approach.
            (2) Its anti-union stance.
            (3) Its willingness to give in to far right censors in its media and pharmacy businesses.
            (4) The tax breaks it gets because its stores are large, from local governments.

    •  Creditors get screwed too (none)
      The insurance payouts are shielded from bankruptcy courts.

      New idea for Comedy Central game show: Kick Ben Stein's Ass

      by bobinson on Mon Apr 04, 2005 at 11:36:00 AM PDT

      [ Parent ]

      •  Depends on how you think about it. (none)
        True, the employee's creditors don't get anything.  But, neither would the employee have gotten anything. (Besides which, the employee is dead, and hence doesn't need to go bankrupt, probate takes care of that).

        The proceeds of the life insurance payouts do go to the employer, and thus are available to the employer's creditors when paid (unless the COLI is in an employer's retirement fund, which wouldn't make sense, because the retirement fund is tax exempt anyway, eliminating the tax benefit for COLI).  

        So, if Wal-Mart goes bankrupt, the funds are available to its creditors.

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