Friday, August 28, 2015

Make low-wage employers pay for their workers’ welfare

Almost 75% of the folks who get aid for the poor are in families headed by someone who works. 
That’s right. Most of the $150 billion that state and federal governments give to poor people goes to poor people who live with a working head of household.

Let’s call it what it is: public assistance for the poor is a great big subsidy to employers who pay low wages.

As the New York Times editorial board put it:
“…the safety net, though strained and inadequate, is functioning. Low-earner tax credits, for instance, create an incentive to work by tying cash assistance to earnings. Other programs enable people to work by subsidizing health care, child care and transportation.
“The problem is that as labor standards have eroded, allowing profitable corporations to pay chronically low wages, taxpayers are not only supporting the working poor, as intended, but also providing a huge subsidy for employers by picking up the difference between what workers earn and what they need to meet basic living costs. The low-wage business model has essentially turned public aid into a form of corporate welfare.”

This isn’t doubletalk. If all those actually poor workers earning minimum wage at McDonald’s weren’t getting a welfare check, they’d be too sick and too undernourished to show up for work.

The low wage employers are taking full advantage of the fact that many of their workers have a welfare check to fall back on so they can pay the rent and feed the baby. If welfare did not exist, these companies would have to pay higher wages to get a work force that could actually show up for work.

Let’s start thinking about how to charge the cost of welfare back to these employers, and stop subsidizing their bottom line.

Copyright © Richard Carl Subber 2015 All rights reserved.

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