The “living wage” movement has been back in the news, fueled in part by a new report from Berkeley arguing that American taxpayers subsidize low-wage employers (like Walmart and McDonald’s) because many low-wage workers qualify for government assistance. I take on that argument in my latest column, out this morning.
Many liberals argue that the food, health-care and cash assistance she receives from the government amounts to a subsidy to her employer, which should be paying her a higher wage. Ken Jacobs, co-author of a book on the subject out this week that received a lot of attention, writes here in The Washington Post that “American taxpayers are subsidizing people who work … because businesses do not pay a living wage.” Citing a 2013 report from the National Employment Law Project (NELP), The Huffington Post writes that “low wages at the top 10 largest fast food chains cost taxpayers about $3.8 billion per year.” In testimony before Connecticut lawmakers last month, an NELP lawyer argued that “the low-wage business model practiced by many of the largest and most profitable employers in the country not only leaves many working families unable to afford the basics, but also imposes significant costs on the public as a whole.”
I argue not only that “living wages” would hurt much more than they would help, but also that “the government isn’t subsidizing Wal-Mart; it’s not exclusively Wal-Mart’s responsibility to make sure that Wal-Mart’s workers bring in enough cash every week.”
You can read the entire column here. I welcome your comments.






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