Subsidizing the Rich

Lawmakers and pundits continue to beat up on poor folks. The latest effort in Indiana is Democrat Terry Goodin’s proposal to drug test welfare recipients–never mind that such efforts elsewhere have been a colossal waste of money, since savings from the minuscule number of abusers haven’t begun to offset the costs of testing everyone getting benefits.

As I noted in an earlier post, it’s all about shaming and humiliating the “takers.”

But here’s what drives me up the wall: we not only don’t shame those who are ripping us off for more money than welfare recipients could ever dream of, we admire them. We accord them (undeserved) respect, because we think they’re smart businesspeople!

Once again, an academic study has documented what we all know: low-wage business enterprises depend upon taxpayers to support their workers and give them an unearned competitive advantage.

U.S. taxpayers pay roughly $153 billion each year to supplement employers who refuse to pay a livable wage, according to report published Monday by the University of California, Berkeley, Center for Labor.

As the Minnesota Post has noted,

The study most likely understates the degree to which taxpayers subsidize low-wage workers. It was limited to the cost of four major public-assistance programs:  medical assistance, food stamps, Temporary Assistance to Needy Families and the Earned Income Tax Credit, a refundable credit to working people with low and moderate incomes.

It did not include the cost of housing assistance, child-care assistance, free school lunches and other programs also available to low income families.

Let’s be clear: there are entrepreneurs and businesspeople who make a lot of money “fair and square.” They don’t offload costs onto taxpayers, either through externalities (dumping pollutants that we must pay to clean up), or paying wages that we must supplement. Those are the good guys, and they’re entitled to enjoy all the benefits their hard work and creativity have generated.

But the so-called “Captains of Industry” who profit at the expense of the public–those whose fat bottom lines depend upon the generosity of taxpayers–are the ones who deserve the scorn that instead gets directed at the single mom who has fallen on hard times, or the factory worker whose job vanished during the last recession.

The real “addicts” are the companies like Walmart and McDonalds whose business models  are dependent upon the drug called other people’s tax dollars.

A lot of us could be successful businesspeople if someone else was paying our employees.



  1. An interesting argument that I hadn’t really considered, but when a business plan uses very unskilled labor, and does not have any trouble hiring willing workers for the salary offered, why would a business pay more in salary? Just seems counter-intuitive to ignore the supply v. demand equation and instead rely on some type of charity intent.

  2. Very High on the List of Welfare Recipients are the Colts, Pacers, and soon to be the Indy Eleven. Will we drug test the players, and owners since they receive directly or indirectly Corporate Welfare. Will we drug test the members of the General Assembly??

    Recently we had a fight for $15, that is nation wide protests that desire the Minimum Wage be raised to $15.00 an hour. Needless to say the resistance to increasing the Minimum Wage is always a battle.

  3. And now our legislature has once more moved to drive wages DOWN for working people in IN. This time construction workers are their enemy. These legislators are really nuts.

  4. Most of us are old enough to remember the glory days for America. Businessmen with vision who pursued growth benefitting all. The GOP as a legitimate political party offering growth for the country and a haven for businesses that fueled the American Dream for everyone.

    We all here almost daily mourn the passing of those days and the devolution of the Grand Old Party to the Great Oligarchy Plot and we all have our favorite villains.

    It seems to me though that more and more experts are concluding that the real villian in all of this is not the growth of greed but the end game of the great gift of the distant past, fossil fuels and their limitless cheap energy replacing our muscles for doing our work.

    It’s over and what has started is to some degree the collapse of the civilization built on those shifting sands as well as the consequences of their use; we/they have rendered the climate that civilization was built to accommodate a relic of the past too.

    We have inadvertently rendered both our physical infrastructure and our culture unfit for continued service at a time when there has never been more of us and the power of technology for war, the final solution most often employed to resolve crises of too little for too many, capable of destroying everything on earth. The ultimate do over for life.

    Dystopia vs drastically different are now our only options yet the vast majority of us cannot imagine any different. We demand the return of the past as we are creating conditions that obsolete all that we ever knew.

    It is impossible to predict winners and losers in building the culture and civilization adapted to the new earth that is now unavoidable. It’s a race never run before. We have no models, only wild guesses.

    To me though what is inescapable is that the transition will be based either on empathy or compitition from which there are no winners.

    Extreme Christians are hoping for the Second Coming. Something big is coming for sure but I fear not Him but 7B+ of us locked into an unsustainable civilization and culture.

    We’ll either choose to follow leaders who help build what works for the vastly different future or leaders who eliminate our competition for way too few resources.

    It still boils down to liberals vs conservatives.

  5. Can we buy back the state legislature and our congress or has the cancer metastasized and we’re in the hospice stage?

  6. We are all very aware of corporate welfare. They have managed to accumulate such massive wealth that it enables them to buy the politicians who keep passing legislation that provides them access to even more wealth and power. How can we possibly ever take back control of this country and make it a better place for the majority of people, rather for just a few? Money buys power and the 1% (or fewer) seem to have all of the power.

    I know that getting more people out to vote has been discussed many times on this blog, but more importantly how do we educate the masses that the politicians that they have been voting into office are the very people that have been destroying their good paying jobs their membership in the middle class? How do we convince them that the truly expensive welfare queens/kings are large corporations and not the people that have lost their jobs?

  7. If we could only shut down the legislature, and tell them that they have met their quota for damage to the common good, and will have until next January (or when they start meeting again) to atone for what they have done. Maybe they can try again next year and see if they can get it right then.

  8. Your examples of Walmart and McDonalds are two places I refuse to shop at or eat at. I’ve already provided (through tax dollars support) funds that assist their employee’s salary, subsides for food, housing and health care. I don’t support those corporations and why I shop locally. The fact that they are willing (finally) to raise their starting pay shows that they have lost the battle as more and more people like me stay away. There are enough of us that have done this that is it now affecting their bottom line. Sam Walton is surely rolling over in his grave.

  9. Let’s not forget tax incentives to corporations to relocate their low wage jobs and to factory farms and other millionaires

  10. Although nearly all of the heartless and/or insane and/or spiteful and/or pandering legislators these days are Republican, there are a few exceptions to the rule. Goodin should be ashamed, and I’m ashamed he claims to support the same political party that I do.

  11. It used to be that people who attained wealth on their own, as opposed to inheriting it, did so because they were willing to take the necessary risks to develop their creativity into something that would sell, be it a product, invention, idea or professional reputation. Nowadays, the corporate welfare recipients lack talent, are lazy and unwilling to take risks. They don’t have either the work ethic or creativity to earn money the old-fashioned way, so they court politicians. Taxes must be paid, so they try to find some way, any way, to help themselves to tax money, such as pushing to privatize everything possible and to cut sweetheart deals. Beats being smart and working hard, but it flies in the face of the theory that business knows best.

  12. We really cannot identify or identify with inanimate objects, logos, brand names or trademarks. This country has 315,000 present or absent persons’ names that computer agents need to access by April 15 annually. Fiction writers at least give names for their main characters. Shakespeare had his “Wall” — my dog’s favorite character costume to attack in backyard drama games.
    Such is business in emergency markets.

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