Aid to corporations with dependent workers – Backbencher

Essential reading from Tim Noah on why welfare to full-time workers is really welfare to corporations and overpaid executives.

The ingenuity of American corporations in finding ways not to reward work begins with keeping them the hell off the payroll. As Brandeis economist David Weil observed in his book The Fissured Workplace, the much-discussed “gig economy,” which takes employees and reclassifies them independent contractors to whom not even the hourly minimum wage is owed, is only one of several means by which corporations wash their hands of low-wage workers. It isn’t even the most commonplace method.

More typically, corporations use subcontractors and franchisees to make low-wage workers somebody else’s problem, then apply their market power to minimize how much profit those subcontractors and franchisees will have to spend on labor.

Franchising, as I wrote eight years ago in Pacific Standard, is really just a modern equivalent to sharecropping. The result of all this fissuring is that you can work your ass off and still require food stamps to feed your kids and Medicaid to take them to the doctor.

A GAO report in October found that 70 percent of all beneficiaries of those programs worked full-time. Walmart, McDonald’s—these are the companies where bottom-rung workers require the government to supplement their income because their employers, or effective employers, won’t pay them a living wage. And many of these companies pay above the hourly minimum wage, which has been stuck at $7.25 for more than a decade.

The conservatives who like to complain about lazy people on the dole seldom point out that to a great extent it’s hugely profitable corporations that are placed on the dole when the federal government has to extend assistance to their underpaid workers. This problem is one reason why America has fallen out of love with the idea of ending welfare as we know it.

Aid to corporations with dependent workers – Backbencher

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