- Oct 23, 2012
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Barry Ritholtz has a column up arguing that welfare subsidies to low paid employees at firms like WalMart and McDonalds are in fact subsidies to those firms themselves. Rather than being what they actually are, which is subsidies to the low paid workers. Theres a simple way to show this too.....
And its here that we start to have a problem with the thesis as it is. For the corporations are paying what they can get away with: yes, it really is true that rapacious capitalists will pay as little as they can for anything in order to maximise their profits. But the extension of this is that given the supply of that low skill labour in the US and the demand for that low skill labour then those companies are paying what that low skill labour is actually worth. This is definitional: in a market economy something is worth what someone will pay for it.
But...what about those commercials about how they all get cheap health insurance, tuition assistance, and make decent wages?
What have you been watching????
Really? :\
I typically avoid Walmart, but I reserved an Xbox there.... fuck....
Quoting an article: But the extension of this is that given the supply of that low skill labour in the US and the demand for that low skill labour then those companies are paying what that low skill labour is actually worth.
...and thus welfare to low wage workers is not really a subsidy (or so the argument goes).
But what if we do some critical thinking? Is it possible that these mega corporations may have done things to influence the market for labor and depress wages? What if large corporations lobbied for policies that allow and promote Global Labor Arbitrage, effectively dramatically increasing the supply of labor (for the production of goods and services for domestic American consumption) and thus decreasing American wages?
It was probably some Walmart executive's brain fart of an idea to attempt to promote a sense of community in the stores, or some such thing."associates" hahaha newspeak FTL
I guess the PR campaign is still cheaper for the company. (Given the number of employees....yeah.) And it still functions as basic advertising.They actually have "look how great Walmart is!" commercials airing now.