Unlike Navigators who give false assurances to those who qualify for Medicaid, private industry consists of people who are properly motivated to deliver goods. It is a completely different world from the government system where goods are available that the qualified never hear about.
So naturally, when McDonald’s and Walmart take an interest in the well-being of their employees, they produce real results. In this case, they show their employees what the government (without any lobbying on the part of McDonald’s or Walmart!) has said it wants to give to people who don’t make much money.
Naturally, this is all turned into an accusation against those companies; Barry Ritholz labels them “welfare queens.”
This issue has become more known as we learn just how far some companies have gone in putting their employees on public assistance. According to one study, American fast food workers receive more than $7 billion dollars in public assistance. As it turns out, McDonald’s has a “McResource” line that helps employees and their families enroll in various state and local assistance programs. It exploded into the public when a recording of the McResource line advocated that full-time employees sign up for food stamps and welfare.
Walmart, the nation’s largest private sector employer, is also the biggest consumer of taxpayer supported aid. According to Florida Congressman Alan Grayson, in many states, Walmart employees are the largest group of Medicaid recipients. They are also the single biggest group of food stamp recipients. Walmart’s “associates” are paid so little, according to Grayson, that they receive $1,000 on average in public assistance. These amount to massive taxpayer subsidies for private companies.
Why are profitable, dividend-paying firms receiving taxpayer subsidies? The short answer is, because they can. The longer answer is more complex and nuanced.
Both McDonald’s and Walmart are engaging in perfectly legal behavior. The system was set up long ago in ways that failed to imagine companies doing this. Yes, they are taking advantage of the taxpayer, but they are also operating within the law.
Which means it is time to change those outdated rules.
It is not only legal, it is exactly what the welfare state wanted and expected. It is sickening hypocrisy to favor the welfare state (which Ritholz does) and pretend that such support does not empower employers to pay their employees less. It isn’t just McDonald’s and Walmart. It is every independent convenience store franchise owner. McDonald’s didn’t create this situation. Walmart didn’t dream up welfare entitlements and then lobby to get them passed as a long-term strategy to pay employees less. If you don’t want people to benefit from free stuff, then stop offering it to them.
Ritholz won’t even consider stopping the poison at the source. No, we must establish a higher minimum wage law or bill corporations for every cent spent on their employees in welfare aid or else the government should give a yearly free income to every person.
No. Minimum wage will spread unemployment and inflation. The other two proposals will just destroy the economy. End the welfare state. Lower, or eliminate, taxes. Cut spending. That is the only way.