By  on July 15, 2009

WASHINGTON — In the high stakes political game over health care reform, the centerpiece of President Obama’s domestic agenda, Wal-Mart Stores Inc. stands to gain considerable ground in its public image and labor relations.

The country’s largest retailer has long been cast as antiworker after a series of negative incidents and a vigorous effort against unionizing its stores, but in recent times has improved its stance through better employee benefits. Now, Wal-Mart has inserted itself into a game-changing debate of historical proportions that promises to burnish its reputation and establish the company as a model corporate citizen in the eyes of workers and consumers.

At the same time, business groups, including the retail industry’s major lobbying group, the National Retail Federation, find themselves on the other side of public sentiment by opposing several of the health care proposals, including an employer mandate. Such a stance in this economic climate is loaded with public relations headaches.

The retail industry employs 24 million people, 50 to 60 percent of whom are eligible for health care benefits, according to industry figures. That means 10 million to 12 million retail employees, many of them working part-time, are not eligible for employers’ health coverage.

A new USA Today/Gallup poll out Tuesday said 56 percent of Americans favor a health care reform bill, 33 percent oppose it and 12 percent do not feel strongly either way. To finance the bill, 61 percent believe employers who do not provide insurance should pay a fee.

Also on Tuesday, House lawmakers unveiled their comprehensive health care reform legislation. It includes an employer mandate that gives employers the option of providing health insurance to all employees or contributing funds on their behalf. The legislation would exempt small employers, defined as payrolls under $250,000, from the employer mandate.

The NRF took an aggressive stance against Wal-Mart’s position in a letter to its members. Tracy Mullin, NRF president and chief executive officer, said: “Although the move may provide a short-term public relations boost to Wal-Mart, it could have long-standing, devastating consequences to retailers throughout the country.”

A Wal-Mart spokesman declined to comment directly on Mullin’s statement, but he noted Wal-Mart believes the focus should be on health care reform and providing ideas to contribute to the discussion. “The question is what other proposals are being forwarded by the NRF or other interested parties,” he said.

Some experts said the NRF and other business groups could run the risk of being isolated in the debate. But the NRF doesn’t see it that way and is fighting back.

“From my perspective, this strengthens our position in the debate by showing we’re willing to even go as far as to criticize a retailer [Wal-Mart], albeit a nonmember retailer, for an odd and peculiar position they have taken,” said Neil Trautwein, NRF’s vice president and employee benefits policy counsel.

Asked whether it would hurt the NRF’s image, Trautwein said: “I’m not concerned that we have lost image. If anything, I think this has helped protect the NRF as a positive player in the health care reform debate.”

As for a burnished Wal-Mart image — the corporate giant’s identity as a defender of workers’ rights might be far from fully formed — the nation’s largest private employer has already scored points with President Obama, longtime critics, neutral observers and even some labor groups for endorsing, in conjunction with the Service Employees International Union, the controversial employer mandate provision in health care reform legislation being drafted on Capitol Hill.

White House Press Secretary Robert Gibbs praised Wal-Mart in his daily briefing with reporters on Monday.

“And obviously Wal-Mart came out as the nation’s largest employer and discussed the importance and the need for health care that cuts costs now,” Gibbs said.

But while Wal-Mart continues to bask in the glow of the positive attention, labor-management experts warn that the temporary détente the retailer has with organized labor is likely just that: temporary.

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