Poverty and Public Assistance: The Public Cost of Private Prosperity

As everyone probably knows by now, I’m fairly anti-low wage, evidenced in the editorial I wrote for The Torch last week that attacked the administration’s decision to slash the wages and benefits of the housekeepers in 2012 by contracting, essentially, the Burger King of housekeeping companies.

Certainly, most intellectual and moral energy should go to interrogating the day-to-day lives of those subjected to live in poverty — the stress, psychological trauma, food insecurity, unhealthy means of getting by, and the broader implications of these phenomenon. That was indeed the aim of my piece, though I’m not sure that’s the outcome it yielded.

Nevertheless, I also think it’s useful to spend some time looking at the cost these low wages accrue on the public. More specifically, sub-living wages force workers who earn them to rely on public assistance programs — most namely: SNAP (food stamps), Medicaid, the Earned Income Tax Credit [EITC], among many others — to make ends meet.

Indeed, as the numbers and figures below indicated, this amounts to an essential subsidy to large corporations who pay these low wages:

The Cost

•  Fifty-two percent of non-managerial fast-food workers are enrolled in at least one public assistance program
• Fast-food workers make up 73 percent of public assistance enrollees
• The total public cost of families who work in the fast-food industry is $7 billion
• Wal-Mart alone, by the same measure, receives an estimated $6.2 billion annually in mostly federal taxpayer subsidies
•  A single Wal-Mart Supercenter costs taxpayers between $904,542 and $1.75 million per year
•  Springfield houses two of these stores, which costs Americans between $1.8 million and $3.5 million per year

•  Just last week, the Economic Policy Institute [EPI] released a study that holds that raising the minimum wage to just $10.10 would save American taxpayers $7.6 billion: 

(Info-graphic Courtesy of the Economic Policy Institute [EPI]) 

Thus, the profits of these large corporations and franchises, in short, come at the expense of (1) people who are materially poor; and (2) taxpayers.

Certainly, the bulk of this public aid is subsidizing the large corporations like Wal-Mart — Wal-Mart alone costs taxpayers $6.2 billion per year — McDonalds, Burger King, etc., etc. But it’s also well worth recognizing, as I’ve done before, that Wittenberg is implicated in this, too.

But let’s not spend too much time dwelling on the plight of the taxpayer; the real victims here are low-wage workers who are subjected to live below or just above the poverty line. 

Indeed, folk like those who clean our facilities.