With SNAP funding in the news, we\u2019re seeing a revival of a familiar complaint against big business. The reason millions of Americans need public benefits like SNAP, critics say, is that their employers don\u2019t pay them enough.<\/p>\n
As one columnist recently put it<\/a>, corporations \u201chave taken advantage of Medicaid, food stamps, and other safety net programs for years to get out of paying their workers a living wage by sticking the taxpayers with the expense.\u201d These corporations are to blame for people\u2019s need for public assistance, and they should pay their workers more so that they\u2019ll rely less on safety net programs funded by taxpayers.\u00a0<\/p>\n But this complaint is morally confused. To see why, let\u2019s start with a simple point: an employer is a buyer of labor. So when critics say that big corporations should raise their employees\u2019 wages to the point where they don\u2019t need public assistance, what they\u2019re really saying is that corporations should pay more for what they buy. But we shouldn\u2019t assume that merely buying something from someone obligates you to pay them so much that they never need public assistance, rather than simply paying them the mutually agreeable price.\u00a0<\/p>\n Here\u2019s an analogy. Scarlett likes to buy scarves from Wes on eBay. Whenever Wes lists a scarf for auction, Scarlett makes the highest bid. In short, she\u2019s his best customer. But times get tough for Wes. He begins to struggle to pay rent and buy groceries. Scarlett keeps winning the auctions for Wes\u2019s scarves and sending payments his way, but it\u2019s not enough to keep him off SNAP. <\/p>\n Politicians and commentators learn about Wes\u2019s situation and place the blame squarely on one person: Scarlett.<\/p>\n If only she had paid more than the auction price for his scarves, they argue, Wes wouldn\u2019t need SNAP benefits. According to one columnist, \u201cScarlett is taking advantage of the government\u2019s safety net to get out of paying Wes enough to live on and sticking taxpayers with the expense.\u201d\u00a0<\/p>\n The moral condemnation of Scarlett would be downright bizarre, and it\u2019s not hard to see why. Remember, Scarlett is Wes\u2019s best customer \u2014 she offers more for his scarves than anyone else. If anything, we should have the least<\/em> complaint against her. She\u2019s already given Wes thousands of dollars while other customers have given him less or nothing at all. Scarlett is doing more than anyone else to benefit Wes, so it\u2019s strange to single her out for blame.\u00a0<\/p>\n Now turn back to big businesses like Walmart and Amazon. Just as Scarlett is Wes\u2019s best customer, so too is Walmart its employees\u2019 best customer \u2014 that is, it made them the best offer for their labor.<\/p>\n We know this because if Walmart hadn\u2019t<\/em> made them the best offer, those employees would be working somewhere else instead. Workers accept the best offer for their labor just as weavers accept the best offer for their scarves. So, as with Scarlett, we should have the least complaint against Walmart, not the most. Other employers either made Walmart workers worse offers or made them no offer at all. Since Walmart is doing more than anyone else to benefit Walmart workers, it\u2019s strange to single it out for blame.\u00a0<\/p>\n You might reply that I\u2019m overthinking things. The simple truth is that Walmart should pay its employees more because it can afford to pay them more. But this view assumes you\u2019re obligated to pay more for something simply because you can afford to do so \u2014 and that\u2019s a dubious assumption.\u00a0<\/p>\n Think back to Scarlett. Suppose that she could afford to pay Wes more for his scarf than what turned out to be the winning bid. While it might be generous of her to do so, that seems more like charity than fulfilling an obligation. When someone sells you a scarf, a cup of coffee, a gym membership, or an hour of labor, you don\u2019t thereby incur a duty to pay them whatever it takes to fix their personal finances. You simply owe them the agreed-upon price.\u00a0<\/p>\n And that agreed-upon price isn\u2019t arbitrary \u2014 it reflects supply and demand in the case of labor just as it does for anything else. A scarf sells at a price where someone is willing to buy it and someone else is willing to let it go. Labor is no different: wages settle where workers are willing to offer their time and employers are willing to buy it. <\/strong>If the wage is set too high, people will be less likely to hire workers; if it\u2019s too low, people will be less likely to work.<\/p>\n Even if you insist that rich customers like Scarlett do have a moral obligation to pay Wes more for his scarves, it doesn\u2019t follow that government officials should force<\/em> her to do so. The mere fact that you should do something \u2014 be it paying more for a scarf, driving a good friend to the airport, or visiting your sick sibling in the hospital \u2014 doesn\u2019t establish that it\u2019s the government\u2019s job to make you do it. Plus, forcing Wes to raise his prices would likely backfire: if the government required Scarlett and other customers to pay more for his scarves, they\u2019d be less likely to buy them, leaving Wes even worse off than before.\u00a0<\/p>\n The parallel to employers is clear. Even if you think that buyers of labor should pay more if they can afford to do so, it doesn\u2019t follow that the state should make them. And here again, the proposed policy would probably backfire: by making workers costlier to hire, it would discourage employers from buying their labor at all<\/a> \u2014 leaving them not with higher wages, but with no job. At the bare minimum, we should ensure that any policy intended to benefit workers doesn\u2019t harm the very people it aims to help.\u00a0<\/p>\n The post Why Blaming Walmart and Amazon for Public Assistance Is Misguided<\/a> was first published by the American Institute for Economic Research (AIER)<\/a>, and is republished here with permission. Please support their efforts.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" With SNAP funding in the news, we\u2019re seeing a revival of a familiar complaint against big business. The reason millions of Americans need public benefits like SNAP, critics say, is that their employers don\u2019t pay them enough. 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