More Backdoor Corporate Welfare

In the last election one party chose to portray people who receive public assistance as lazy moochers and takers. But the fact is, the companies that employ those same people are mooching off the government. More than half of fast-food workers are forced to receive some sort of public assistance, according to a study from the UC Berkeley Labor Center. That includes SNAP (food stamps), Medicaid, earned income tax credits, and Temporary Assistance for Needy Families. The McDonald's employee help line McResources even advises workers to go on food stamps and Medicaid.

The total cost to American taxpayers is $7 billion a year.

And it's not just McDonald's. It's Wendy's and Burger King and Walmart, whose employees also suck up billions of dollars of public assistance annually.

These are highly profitable companies that have grown almost exponentially over the past few decades. Walmart has put thousands of smaller retailers of all types across the country out of business, sending the profits to Arkansas. McDonald's has replaced thousands of independent restaurants with franchisees who are pressured to treat employees like cattle, siphoning billions of dollars of local profits to Chicago. Profits that had previously been spent and taxed locally and contributed to the local economy.

The business models of McDonald's and Walmart are based on paying workers slave wages, forcing federal and local governments step in to make sure these workers and their children are clothed and housed and don't starve. That is an indirect government subsidy to those companies: these people couldn't work at McDonald's and Walmart without government help.

If you buy what McDonald's pretends is food or the cheap cost-reduced junk that Walmart pawns off on their customers, you too are getting a handout from the federal government. Because these companies couldn't provide you these products at the prices they do if they paid their employees what they actually cost the economy at large.

Well, actually they could quite handily: but it would require lowering their profit margins. Other companies, like Costco, Trader Joe's and QuickTrip, give their employees decent wages and benefits and still make a profit. Not quite as much as Walmart and McDonald's, admittedly. But WMT/MCD business practices are costing all of us money, not just the people who buy their stuff.

If we really need the products that those companies sell, we should be willing to pay their actual costs. It's not right that our tax dollars subsidize the incomes of the McDonald's and Walmart employees who actually do the work, while all the profits go into the pockets of the guys at the top.