I’ve seen some interesting research suggesting that higher minimum wages lead to lower turnover, which can lead to some very real cost savings. I had an interesting epiphany while watching a business lecture about calculating costs associated with hiring, that there are very real points in the minimum wage curve (which should be laffer shaped) where raising the minimum wage has the potential to both increase labor participation and decrease total labor costs.
I now like to joke that minimum wage laws are subsidies for businesses too dumb to factor in hiring and turnover costs.
Welfare is also kind of a subsidy for low paying employers.
If Walmart doesn’t pay enough for its employees to afford to live, then the government steps in with ebt and housing vouchers, etc. to make up the difference.
That’s money Walmart isn’t paying. In fact, they get to kind of double dip. As those employees will likely shop there. So the ebt gets spent there. The government essentially pays Walmart to feed its employees.
The employees are being double hit. Because their income is still taxed, then they essentially get scrip that they’ll likely have to spend at the place where they work.
It’s why you’ll also never see any real movement on the welfare issue. It’s a way to funnel tax money to the rich via poor people.
I now like to joke that minimum wage laws are subsidies for businesses too dumb to factor in hiring and turnover costs.