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Low wages means the State subsidies

I read a very interesting article on the Forbes web site this morning by Clare O'Connor about a report by the Americans for Tax Fairness - that suggests that Walmart Workers cost taxpayers $6.2 billion in public assistance.

The report argues that by paying low wages the State is therefore subsidizing the company and any company with food stamps, Medicaid and subsidized housing.

It is isn't something that I had seen so starkly put before but I think as we look more and more at the growing income inequality and the attacks on the state by some on the political right it is something people should be more aware of. Although the article focuses on Walmart it applies to so many companies that are paying around the minimum wage while at the same time making huge profits and paying their top management/directors very well. To put it very starkly your taxes are enabling companies to continue to pay low wages.

In 2012 the gap between the richest 1 percent and the remaining 99 percent was the widest its been since the 1920s. In the last twenty years the percentage of American workers represented by unions has dropped from 23.3 percent to 12.5 percent (2012) according to the Labor Department.

This growth in income inequality is one the challenges not just in the US but around the world. The future looks very challenging with an estimate of over 2 billion job losses with new technology over the next 20 years will add pressure as job availability will drop as the new jobs will not outweigh those lost and the world’s population will also grow by 1 billion.

Last November Pope Francis attacked unfettered capitalism as "a new tyranny" and called for global leaders to fight poverty and growing inequality he went on to say:

“Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills,”

Addressing income inequality now could help us through those difficult times. How we deal with inequality will tell a lot about the kind of society we are, what values we have and that perhaps is something we should reflect on this Easter.


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