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SQUEEKY2's avatar

Who is the Government really subsidizing when it comes to minimum wage?

Asked by SQUEEKY2 (5708 points ) January 20th, 2014

Is the Government subsidizing the minimum wage earner with welfare and food stamps, just so they can live, or are they subsidizing the Businesses and Corporations, so they don’t have to pay a wage that a person can live on, putting more revenue into company coffers ?

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15 Answers

flip86's avatar

I’d say a mix of both. It benefits both sides.

SQUEEKY2's avatar

So you would say if benefits the minimum wage earner so they can eat,and the companies so they can save on not having to pay a living wage,ok guess I can sorta agree with that.

flip86's avatar

I doesn’t benefit equally though. The companies are still the ones reaping most of it.

SQUEEKY2's avatar

@flip86 Now that I totally agree with.

flip86's avatar

It is ridiculous the way companies treat part timers. The US should have stricter laws to protect part time workers from greedy corporations.

ARE_you_kidding_me's avatar

I hate it when they raise minimum wage, everyone increases their prices 5 times what the actual increased labor costs are and use that as an excuse. The workers still get screwed.

SQUEEKY2's avatar

@ARE_you_kidding_me I can see that , the companies showing their true greed and still as you said screwing the working joe.

CWOTUS's avatar

It’s not a subsidy; there is no benefit paid to either workers or business owners. However, the drive to “increase the minimum wage” plays to a constituency that has low education and (obviously) low income, because those are the people that this most appeals to. Since there are so many of those people, unfortunately (unfortunate that they are both under-educated and poor, that is, not “unfortunate that these people exist”), there are a number of votes to be had in that appeal.

Somewhat paradoxically, it also appeals to many owners of large businesses, who welcome this (even as they appear to militate against it) as another barrier to entry to potential startup competitors, who now have an additional hurdle placed in their way.

flip86's avatar

When I got hired at my current job, they told me I’d average 25 to 30 hours a week. At first, I did. Over the last few months they have cut me down to averaging 18 to 20 hours a week. It is ridiculous. It isn’t just me they have done this with. All their part timers have had their hours cut.

YARNLADY's avatar

There is no subsidy involved in minimum wage. Employers are required to pay a certain amount, and that is one of their business expenses.

stanleybmanly's avatar

Since food stamps are government certification that one doesn’t earn enough to eat, any full time employee who qualifies for food stamps should report his employer to the government . The government should then bill the employer for the expense, thereby transferring the cost from the general population to those responsible for hungry working people.

ragingloli's avatar

Both, but mainly businesses.
Sure the poor will have something to eat, but the real winners are the corps.
They not only get to increase their profits by paying their employees shit, but they also get additional income from the government by taking the foodstamps and welfare money from the same employees that they pay almost nothing.

The real welfare abusers are corporations.

But, of course, all the conservative slander against poor people as moochers caters to a constituency that has no education and obviously no empathy.

LuckyGuy's avatar

When the gov’t subsidizes a minimum wage worker with food stamps and welfare it is not just subsidizing the business that hire the workers. That money ends up in the pockets of other businesses as well. Usually a minimum wage earner spends everything they have. They go from paycheck to paycheck. They do not put cash into a 401k or send it to an off-shore tax free account or shelter it in a trust for their grandkids. They spend it. On what? Rent, utilities, food, car insurance. and other necessities.
Virtually every dollar the government “gives” to the minimum wage earner goes directly to the landlord, utility company, grocery store chain, insurance company, and the local WalMart.
So,... who is really being subsidized?

ARE_you_kidding_me's avatar

@LuckyGuy that is the best to the point explanation of what is going on. As prices inflate and taxes go up the middle class give up more and more ground also.

Yetanotheruser's avatar

The vast majority of any government subsidies (federal, state and local) go to the corporations who convince the government entities that they “need” tax breaks in order to come into a community, lowball all local competition, (mostly mom-and-pop shops) and provide low-paying part time jobs for the residents of that community.

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