Welfare Costs Not The Responsibility Of The Companies


Bernie Sanders is back in the news, as is his new tax grab, Er, I mean “Legislation” regarding the welfare costs of workers under major employers. Sanders had previously hinted at releasing a bill aimed at big corporations over the costs of assistance programs offered by the state to the workers. Companies such as Walmart and Amazon, to name a few, have come under fire both in Sanders promotions of this bill and over the years in general from both the left and right.

The Stop Bad Employers by Zeroing Out Subsidies, or Stop BEZOS Act (real subtle there Bernie) aims to make employers directly accountable and subsequently taxed directly for any assistance used by staff; dollar for dollar. If an employee takes $1000 in government aid the company will be forced to pay an additional $1000 in taxes to reflect that.

The move has gotten praise as expected from the left, but more surprisingly from the right as well. Watch below as you see Tucker Carlson from Fox News come out against the amount of aid that the government is granting and, similar to Bernie, why the companies are at fault.

Why The Welfare Argument Is Wrong

To start off, most of that welfare is already covered via the massive taxes that are levied against companies already. Take Amazon for example. Last year they paid $412 Million, contrary to popular belief they paid nothing. Much of the complaints come from the rising levels of listed Amazon employees that are participating in the SNAP program. There’s an issue here too. Amazon has come out and stated that the majority of those listed on the program are either part-time workers, or previous workers that are being accounted in that year. So in effect Amazon is being judged for their part-time workers, or people who don’t even work for them anymore.

The next big issue with this Act is the utter lack of economic and social understanding. Sanders and the like want these companies to pay for the assistance programs that the state is giving the staff, under the guise that the companies aren’t paying enough. Now let’s unpack this. Do companies try to save on labor as much as they can? Yes. But companies usually do this by restricting and reducing hours rather than actually holding wages back. Secondly, due to competition wages tend to balance out near their productive value. It’s unsustainable to force a company to pay a wage of $15 for work that’s only worth $9.

This act effectively forces companies to do so, and worse still incentivizes and in some cases forces welfare recipients to remain on the programs. I’ll explain. You have a part-time job at Amazon and are on welfare. Now you want to work more and earn more money independently, but, because Amazon now has to pay the extra in taxes for every employee currently using such programs they can’t offer you those extra hours. You continue to work part time and get the rest from the government because you don’t have a choice now. Somehow in these populists’ minds, this helps you. Yes, their argument is that stupid.

Conclusion: Remove The Welfare

The worst part of this is the notion that the companies are to blame. Why are Walmart and Amazon responsibly for fixing poverty nationally all of a sudden? They sell stuff, need people to stock it and help customers and offer a wage. The employees choose to take these jobs that have been offered and wouldn’t have existed without these companies. Now they’re responsible for all of their staff’s finances? No.

Considering the amount of actual corporate welfare companies receive from incentives, grants, and subsidies, it’s understandable. People want them to pay back into the system, and that additional money going towards workers is hard to hate. That said the fix isn’t fighting fire with fire, or in this case government with government. The fix is to remove the corporate welfare entirely and reduce welfare in general. The only real reason companies “get away” with offering below the line wages is because the slack get’s picked up elsewhere. Remove the state interference and let the market do its thing.

You can read more by Killian Hobbs on Think Liberty here.