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> Companies that employ workers below subsistence wages are actually being indirectly subsidized collectively by every single taxpayer. I don’t see what leads

> Companies that employ workers below subsistence wages are actually being indirectly subsidized collectively by every single taxpayer. I don’t see what leads you to this conclusion. It seems self-evident that people who get paid need less government-provided (ie taxpayer-provided) benefits.

XorNot 6y ago
Walmart's workers cost the public $6.2 billion (https://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/?sh=6f07422f720b https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...) in welfare. Some of this is food stamps. Which Walmart bills the government for when food is bought from their stores using them. Walmart moving into a small town and driving a bunch of small business's out doesn't make anything more efficient, it literally costs the taxpayer more, of which a bunch of that goes to Walmart's owners as revenue.
- CryptoPunk 6y ago
  Walmart would be employing these workers even without them receiving welfare. Have you ever lived in a developing country? If you have, you'd know how little people can subsist on and continue to work. In fact, without welfare, and programs like SSDI - which when it started in the 1950s, accepted only 200,000 people as a result of strict eligibility requirements, and has since grown into a massive social welfare program with over 10 million beneficiaries - far more people would be applying for the jobs offered by Walmart.
- LudwigNagasena 6y ago
  Are you saying that if Walmart fired these workers the budget would increase by $6 bln? If not then it is just a highly misleading statistic bordering on intentional misinformation.
  - TeMPOraL 6y ago
    Essentially, over time. If you could also prevent other existing competitors from offering Wallmart-level pay or worse. In this scenario, the demand for groceries didn't disappear - just Wallmart did, and now there's all these ex-Wallmart people looking for a job. New grocery stores would form, and if they paid enough to get these people off welfare, that would be (per GP) $6B of money freed to be allocated elsewhere. Food prices could raise a little bit, though, and food variety could get reduced (but these are not necessarily bad in the balance).
    - LudwigNagasena 6y ago
      That’s a lot of counterfactuals without any model and data to support such conclusions.
      - tekknik 6y ago
        It makes sense to me. Where’s your supporting evidence that these statements are “counterfactual”?
        LudwigNagasena 6y ago
        By counterfactual I mean something that was not observed, thus it can only be speculated about.
    - bigwavedave 6y ago
      I'm no economist so I may be missing something; let's talk through this bit by bit and maybe you can help me understand your plan better. > If you could also prevent other existing competitors from Walmart-level pay or worse. In this scenario, the demand for groceries didn't disappear - just Walmart did, and now there's all these ex-Walmart people looking for a job. You mention existing competitors would face the same regulation and control that Walmart would but the rest of your post reads like you only expect Walmart employees to be laid off. What makes you think that Smiths, Macey's, Kroger, Target, etc won't have to let workers go for the same reasons that Walmart workers would be let go? If you're instituting policies that result in Walmart cutting its workforce, those same policies will absolutely cause the same to happen in competing chains. Okay, so you've managed to flood the labor market with workers from a dozen grocery chains- what next? > New grocery stores would form How and why do you think new grocery stores that don't even have the established presence or infrastructure other chains had already built will be able to thrive once these other chains have disappeared? > And if they paid enough to get these people off welfare Where is the money coming from that allows these new stores to pay their workers $6.2b more than before? By a) raising prices on groceries and b) hiring fewer workers. So, to recap: a large part of the workforce has been laid off, prices have risen for everyone across the board, and because the new stores with the higher prices aren't hiring as many workers to compensate for the policies you've instituted, part of the workforce that was laid off in the first place will still be out of work! That's without even taking into consideration the effect this will have on the rest of the working class. Do you think the families who were on the cusp of needing welfare before the prices on groceries rose will magically have their food budgets increased? Of course not. Either they'll work more to increase their incomes, learn to live with less while keeping their grocery budgets static, or get the government to subsidize them which is the whole problem you wanted to fix in the first place. If you're instituting a policy that causes massive lay-offs for multiple corporations while increasing the cost of living for everyone (including the people you just got laid off), you're not going to free up $6.2b to be used elsewhere- you're creating a situation where a) even more people will need to take advantage of government subsidies to make ends meet; wasn't this what you were trying to fix? b) families will, as they always have, learn to survive on less while spending the same as before. c) permanently add to the unemployment pool because the new stores are hiring fewer employees than were laid off by the new policies you instituted. I don't like this solution. Am I wrong? I've never had any formal econ education so it's perfectly reasonable to believe I'm missing some key points here; this is just how it logically plays out in my mind.
- jeegsy 6y ago
  Isnt this one of those chicken and egg problems? Isnt the very existence of the welfare the reason why they can pay such low wages in the first place?

XorNot 6y ago

Walmart's workers cost the public $6.2 billion (https://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/?sh=6f07422f720b https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...) in welfare. Some of this is food stamps. Which Walmart bills the government for when food is bought from their stores using them. Walmart moving into a small town and driving a bunch of small business's out doesn't make anything more efficient, it literally costs the taxpayer more, of which a bunch of that goes to Walmart's owners as revenue.

CryptoPunk 6y ago
Walmart would be employing these workers even without them receiving welfare. Have you ever lived in a developing country? If you have, you'd know how little people can subsist on and continue to work. In fact, without welfare, and programs like SSDI - which when it started in the 1950s, accepted only 200,000 people as a result of strict eligibility requirements, and has since grown into a massive social welfare program with over 10 million beneficiaries - far more people would be applying for the jobs offered by Walmart.
LudwigNagasena 6y ago
Are you saying that if Walmart fired these workers the budget would increase by $6 bln? If not then it is just a highly misleading statistic bordering on intentional misinformation.
- TeMPOraL 6y ago
  Essentially, over time. If you could also prevent other existing competitors from offering Wallmart-level pay or worse. In this scenario, the demand for groceries didn't disappear - just Wallmart did, and now there's all these ex-Wallmart people looking for a job. New grocery stores would form, and if they paid enough to get these people off welfare, that would be (per GP) $6B of money freed to be allocated elsewhere. Food prices could raise a little bit, though, and food variety could get reduced (but these are not necessarily bad in the balance).
  - LudwigNagasena 6y ago
    That’s a lot of counterfactuals without any model and data to support such conclusions.
    - tekknik 6y ago
      It makes sense to me. Where’s your supporting evidence that these statements are “counterfactual”?
      - LudwigNagasena 6y ago
        By counterfactual I mean something that was not observed, thus it can only be speculated about.
  - bigwavedave 6y ago
    I'm no economist so I may be missing something; let's talk through this bit by bit and maybe you can help me understand your plan better. > If you could also prevent other existing competitors from Walmart-level pay or worse. In this scenario, the demand for groceries didn't disappear - just Walmart did, and now there's all these ex-Walmart people looking for a job. You mention existing competitors would face the same regulation and control that Walmart would but the rest of your post reads like you only expect Walmart employees to be laid off. What makes you think that Smiths, Macey's, Kroger, Target, etc won't have to let workers go for the same reasons that Walmart workers would be let go? If you're instituting policies that result in Walmart cutting its workforce, those same policies will absolutely cause the same to happen in competing chains. Okay, so you've managed to flood the labor market with workers from a dozen grocery chains- what next? > New grocery stores would form How and why do you think new grocery stores that don't even have the established presence or infrastructure other chains had already built will be able to thrive once these other chains have disappeared? > And if they paid enough to get these people off welfare Where is the money coming from that allows these new stores to pay their workers $6.2b more than before? By a) raising prices on groceries and b) hiring fewer workers. So, to recap: a large part of the workforce has been laid off, prices have risen for everyone across the board, and because the new stores with the higher prices aren't hiring as many workers to compensate for the policies you've instituted, part of the workforce that was laid off in the first place will still be out of work! That's without even taking into consideration the effect this will have on the rest of the working class. Do you think the families who were on the cusp of needing welfare before the prices on groceries rose will magically have their food budgets increased? Of course not. Either they'll work more to increase their incomes, learn to live with less while keeping their grocery budgets static, or get the government to subsidize them which is the whole problem you wanted to fix in the first place. If you're instituting a policy that causes massive lay-offs for multiple corporations while increasing the cost of living for everyone (including the people you just got laid off), you're not going to free up $6.2b to be used elsewhere- you're creating a situation where a) even more people will need to take advantage of government subsidies to make ends meet; wasn't this what you were trying to fix? b) families will, as they always have, learn to survive on less while spending the same as before. c) permanently add to the unemployment pool because the new stores are hiring fewer employees than were laid off by the new policies you instituted. I don't like this solution. Am I wrong? I've never had any formal econ education so it's perfectly reasonable to believe I'm missing some key points here; this is just how it logically plays out in my mind.
jeegsy 6y ago
Isnt this one of those chicken and egg problems? Isnt the very existence of the welfare the reason why they can pay such low wages in the first place?