Walmart and McDonalds have most workers on food stamps and Medicaid, study shows(washingtonpost.com)
washingtonpost.com
Walmart and McDonalds have most workers on food stamps and Medicaid, study shows
https://www.washingtonpost.com/business/2020/11/18/food-stamps-medicaid-mcdonalds-walmart-bernie-sanders/
46 comments
The notion that extended benefits during a pandemic to unemployed workers caused greater/continued unemployment in the US service industry is a theory that has yet to be proven. Some early data[0] suggests that the theory fails to accurately predict behavior.
[0] https://www.cnbc.com/2021/08/04/early-end-to-federal-unemplo...
[0] https://www.cnbc.com/2021/08/04/early-end-to-federal-unemplo...
There are definitely cases where the benefits are greater than the pay for many employees.
> The enhanced payments create a tricky situation for restaurant owners, especially in states such as Georgia and Alaska that are looking to restart businesses in the coming weeks. Nationally, median hourly pay in food-service occupations was $11.65 in 2019, or $466 for a 40-hour week. In some states, restaurant workers could be receiving double their usual pay on unemployment benefits.
Natural experiments and studies are very difficult and easy to manipulate. So I think we can use first principles to tell us that if you pay people not to work, they will be more inclined to not work. I think you would need to definitively prove this not to be the case
https://www.wsj.com/articles/coronavirus-relief-often-pays-w...
> The enhanced payments create a tricky situation for restaurant owners, especially in states such as Georgia and Alaska that are looking to restart businesses in the coming weeks. Nationally, median hourly pay in food-service occupations was $11.65 in 2019, or $466 for a 40-hour week. In some states, restaurant workers could be receiving double their usual pay on unemployment benefits.
Natural experiments and studies are very difficult and easy to manipulate. So I think we can use first principles to tell us that if you pay people not to work, they will be more inclined to not work. I think you would need to definitively prove this not to be the case
https://www.wsj.com/articles/coronavirus-relief-often-pays-w...
[deleted]
There was a great deal of study on the effect extended unemployment benefits during the great recession, and that seemed to show that it reduced people's propensity to apply for (and get) jobs. It would seem that the effect will be similar in this episode, though it certainly warrants further examination.
> Considering that McDonalds and Walmart are #1 and #2 employers in America (after the federal government), this isn't surprising.
Indeed. This article says nothing about the total number of employees McD's and Walmart have. It's committing the same error as heat maps that aren't adjusted for population (See https://xkcd.com/1138/)
> This relies on a mistaken theory on how wages get set. No one gets paid based on what they need. If that were true, lottery winners would continue to work for free.
IMO, every for-profit corporation bases pay on one thing: How easy you are to replace.
Unless you work a job that pays commission, you are not paid based on the value and profit generated by your work. Software engineers don't have high salaries because their work is profitable, they have high salaries because finding good SEs is difficult.
> If federal benefits to their employees were cut, the employees wouldn't have any more bargaining power to demand higher wages.
Workers that are easily replaced will always have zero bargaining power. Unionizing may help, but they still won't have much.
> On the contrary, they'd probably be inclined to work longer or take on additional work to make up for the loss in benefits, pushing wages further on.
More likely, they'd be looking for a second job. But that's hard, since a lot of retail and fast food jobs try to keep people under 30 hours/week so they don't have to pay benefits, while also expecting full-time availability, with a schedule that changes every week.
> You saw exactly that relationship when unemployment benefits were extended during the pandemic and many people chose not to work because it would cut off their benefits or they had enough in benefits to not work for the time being.
And some are quitting because they're tired of being treated like garbage.
https://pdx.eater.com/2021/9/1/22652642/portland-restaurant-...
Indeed. This article says nothing about the total number of employees McD's and Walmart have. It's committing the same error as heat maps that aren't adjusted for population (See https://xkcd.com/1138/)
> This relies on a mistaken theory on how wages get set. No one gets paid based on what they need. If that were true, lottery winners would continue to work for free.
IMO, every for-profit corporation bases pay on one thing: How easy you are to replace.
Unless you work a job that pays commission, you are not paid based on the value and profit generated by your work. Software engineers don't have high salaries because their work is profitable, they have high salaries because finding good SEs is difficult.
> If federal benefits to their employees were cut, the employees wouldn't have any more bargaining power to demand higher wages.
Workers that are easily replaced will always have zero bargaining power. Unionizing may help, but they still won't have much.
> On the contrary, they'd probably be inclined to work longer or take on additional work to make up for the loss in benefits, pushing wages further on.
More likely, they'd be looking for a second job. But that's hard, since a lot of retail and fast food jobs try to keep people under 30 hours/week so they don't have to pay benefits, while also expecting full-time availability, with a schedule that changes every week.
> You saw exactly that relationship when unemployment benefits were extended during the pandemic and many people chose not to work because it would cut off their benefits or they had enough in benefits to not work for the time being.
And some are quitting because they're tired of being treated like garbage.
https://pdx.eater.com/2021/9/1/22652642/portland-restaurant-...
Not disagreeing with most of your points, but:
> This article says nothing about the total number of employees McD's and Walmart have. It's committing the same error as heat maps that aren't adjusted for population
If you have evidence that the percentage of employees on government assistance in WM and McDs is lower than that for other large employers (or even the same), I'd very much like to see it.
I strongly suspect that the evidence will show the opposite - that it will confirm the rankings
> This article says nothing about the total number of employees McD's and Walmart have. It's committing the same error as heat maps that aren't adjusted for population
If you have evidence that the percentage of employees on government assistance in WM and McDs is lower than that for other large employers (or even the same), I'd very much like to see it.
I strongly suspect that the evidence will show the opposite - that it will confirm the rankings
Regarding the last point, if you're a taxpayer paying for these benefits it certainly feels unfair that you are paying for the workers benefits.
I'd rather pay people to not work, personally.
I'd rather pay people to not work, personally.
This comment made me think a bit. There is some minimum level of wage + benefits that a worker needs to survive. And the tendency is for wages for unskilled workers to fall to exactly that level. In other words wages + benefits = bare minimum living expenses. So that supports sanders statement. In that case, if you start giving people benefits, they will just displace wages.
BUT, your statement that increased benefits give leverage to workers to demand more pay also rings true. If the worker can simply quit, and go looking for a new job, without becoming homeless, then that’s leverage. So that would increase wages.
I think maybe both are true but in different situations: if you start at zero benefits, and start adding benefits, at first wages will decrease in equal measure. But then once the benefits become great enough that the worker can live on them alone for some period of time, it starts to push wages back up again.
That would be my guess as to what’s going on.
BUT, your statement that increased benefits give leverage to workers to demand more pay also rings true. If the worker can simply quit, and go looking for a new job, without becoming homeless, then that’s leverage. So that would increase wages.
I think maybe both are true but in different situations: if you start at zero benefits, and start adding benefits, at first wages will decrease in equal measure. But then once the benefits become great enough that the worker can live on them alone for some period of time, it starts to push wages back up again.
That would be my guess as to what’s going on.
“Choose to work” what planet are you from no one chooses work its like “choosing to breath” or “choose to eat”
How long does early retirement from breathing or eating generally last?
(That's the point)
Still not getting it. I eat, I breathe and I work. If I stop eating, I die. If I stop breathing, I die. If I stop working...life goes on the same as before. I currently live off of 4% of my net worth per year. If I decide not to go back to work on Tuesday, I could live for another year, or another decade or another half century.
How is that the same as eating and breathing?
How is that the same as eating and breathing?
> I currently live off of 4% of my net worth per year
What percentage of the population do you think can do that?
This thread is about WalMart and McDonalds employees. The vast majority of them can't go a month without an income source (a paycheck). Zero percent of them can live off 4% of their net worth per year
What percentage of the population do you think can do that?
This thread is about WalMart and McDonalds employees. The vast majority of them can't go a month without an income source (a paycheck). Zero percent of them can live off 4% of their net worth per year
I was one of those type of employees, worked fast food jobs for years, did manual labor for half a decade. To go from that to where I am now is hard, but it is not "learn to live without food or air" type hard.
Some things you might want to look in to:
- https://www.lesswrong.com/tag/typical-mind-fallacy
- https://en.wikipedia.org/wiki/Fundamental_attribution_error
- https://www.lesswrong.com/tag/typical-mind-fallacy
- https://en.wikipedia.org/wiki/Fundamental_attribution_error
I can link to wikipedia pages too. This does not constitute an actual argument.
> the employees wouldn't have any more bargaining power to demand higher wages.
That's what you get for demolishing every ounce of bargaining power of the unions. Corporate overlordship where workers are exploited like it 1870. (Slight hyperbole, of course.)
That's what you get for demolishing every ounce of bargaining power of the unions. Corporate overlordship where workers are exploited like it 1870. (Slight hyperbole, of course.)
>> Sanders accused companies such as Walmart and McDonald’s of relying on “corporate welfare from the federal government by paying their workers starvation wages.”
>This relies on a mistaken theory on how wages get set. No one gets paid based on what they need.
Is that what Sanders' statement implies - that wages are set based on worker needs? I don't think he needs to be interpreted that way.
>This relies on a mistaken theory on how wages get set. No one gets paid based on what they need.
Is that what Sanders' statement implies - that wages are set based on worker needs? I don't think he needs to be interpreted that way.
That's deliberately disingenuous. We've had a minimum wage in the US for decades. It hasn't tracked worker productivity in years (if it did, it would be over $21 and hour).
When we allow the minimum wage to stagnate, we indeed make a national decision to absorb the impact with federal programs.
When we allow the minimum wage to stagnate, we indeed make a national decision to absorb the impact with federal programs.
"Walmart was one of the top four employers of SNAP and Medicaid beneficiaries in every state"
Walmart is a top 4 employer in every state. That stat is meaningless.
"Walmart was found to have employed about 14,500 workers receiving the benefit, followed by McDonald’s with 8,780"
This is a ridiculously small number of people relative to the total headcounts. The reason is because if you work a reasonable number of hours at Walmart or McDonalds, the only way you qualify for government aid is if you are disabled or a single parent.
If we were to tax Walmart and McDonalds an extra levy for each employee that receives benefits (as the article says Bernie Sanders wants), it would simply be giving these employers a financial incentive to stop hiring disabled people and single moms.
I don't see that as a good thing. I look at it from the opposite point of view. It's a good thing these employees are getting government aid. It's clearly helping them get employment and be productive members of society. If anything, I think the benefits should be expanded and we should subsidize more low skill individuals. The Negative Income Tax is a commonly cited method of faciliting this.
Walmart is a top 4 employer in every state. That stat is meaningless.
"Walmart was found to have employed about 14,500 workers receiving the benefit, followed by McDonald’s with 8,780"
This is a ridiculously small number of people relative to the total headcounts. The reason is because if you work a reasonable number of hours at Walmart or McDonalds, the only way you qualify for government aid is if you are disabled or a single parent.
If we were to tax Walmart and McDonalds an extra levy for each employee that receives benefits (as the article says Bernie Sanders wants), it would simply be giving these employers a financial incentive to stop hiring disabled people and single moms.
I don't see that as a good thing. I look at it from the opposite point of view. It's a good thing these employees are getting government aid. It's clearly helping them get employment and be productive members of society. If anything, I think the benefits should be expanded and we should subsidize more low skill individuals. The Negative Income Tax is a commonly cited method of faciliting this.
I understand where you are coming from when you say that " It's a good thing these employees are getting government aid" but that's only because the alternative is not having any aid.
Which is obviously worse. I support increasing the amount of government aid available but the companies are obviously taking advantage of it. These companies don't care about hiring disabled people and single parents. They aren't a charity, if they could hire people to work for even less money they would.
The companies need to be taxed for every single employee that is on benefits. If the tax is high enough they will either increase how much they pay or fire the struggling employees, I doubt future employees will be in a different set of circumstances. Companies are incentivized by profit. If there is a behavior that you don't want to happen tax or fine it. If the behavior remains, increase the tax/fine. Instead these companies get slaps on the wrist or even rewarded.
The companies need to be taxed for every single employee that is on benefits. If the tax is high enough they will either increase how much they pay or fire the struggling employees, I doubt future employees will be in a different set of circumstances. Companies are incentivized by profit. If there is a behavior that you don't want to happen tax or fine it. If the behavior remains, increase the tax/fine. Instead these companies get slaps on the wrist or even rewarded.
> The companies need to be taxed for every single employee that is on benefits.
That's...stupid. Taxing employment just encourages more capital intensive, less labor intensive business models, further straining public support systems. Specifically targeting employment at the low end is even worse than general employment taxes.
Instead, payroll taxes should be eliminated with the revenue replaced by raising progressive income taxes and/or equalizing capital income taxes with general income taxes, so that labor isn't a specially tax-disfavored income source. This will make it cheaper to employ workers at any after-tax income level, and also make labor-intensive business models less tax-disfavored compared to capital-intensive models, redistributing gains of economic activity to labor.
That's...stupid. Taxing employment just encourages more capital intensive, less labor intensive business models, further straining public support systems. Specifically targeting employment at the low end is even worse than general employment taxes.
Instead, payroll taxes should be eliminated with the revenue replaced by raising progressive income taxes and/or equalizing capital income taxes with general income taxes, so that labor isn't a specially tax-disfavored income source. This will make it cheaper to employ workers at any after-tax income level, and also make labor-intensive business models less tax-disfavored compared to capital-intensive models, redistributing gains of economic activity to labor.
I mean we should be moving to less labor intensive business models anyway. Companies that already embrace automation are getting rid of the workers. We as a society should get ahead of this and ensure that the people who need help are able to get it.
I'm also curious why we need to make it cheaper to employ workers? What does society gain from having people work for 40 hours a week but still live in poverty?
> I mean we should be moving to less labor intensive business models anyway.
It's true that technological progress will makes that naturally more sensible over time without using tax policy to make labor artificially more expensive through extra taxes.
> Companies that already embrace automation are getting rid of the workers
That's...tautologically true, yes.
> We as a society should get ahead of this and ensure that the people who need help are able to get it.
Shifting the tax burden from labor by not taxing labor income more than regular income (via payroll taxes) which in turn is taxed more than capital income (which, as well as not paying additional psytoll taxes, has a special, lower rate) of a fairly simple way to do that, or to reduce the number of people that need help, depending on how you look at it. Punitive taxes on labor income and employment make the problems worse. Additional punitive taxes on employment aren't a solution.
> I'm also curious why we need to make it cheaper to employ workers?
The reason we need to make it cheaper to employ workers at any given level of take-home pay is that it directly increases effective wages and reduces poverty.
> What does society gain from having people work for 40 hours a week but still live in poverty?
It... doesn't. That's why need to have the government stop taking a bigger chunk out of pay to workers than any other income-generating transaction.
It's true that technological progress will makes that naturally more sensible over time without using tax policy to make labor artificially more expensive through extra taxes.
> Companies that already embrace automation are getting rid of the workers
That's...tautologically true, yes.
> We as a society should get ahead of this and ensure that the people who need help are able to get it.
Shifting the tax burden from labor by not taxing labor income more than regular income (via payroll taxes) which in turn is taxed more than capital income (which, as well as not paying additional psytoll taxes, has a special, lower rate) of a fairly simple way to do that, or to reduce the number of people that need help, depending on how you look at it. Punitive taxes on labor income and employment make the problems worse. Additional punitive taxes on employment aren't a solution.
> I'm also curious why we need to make it cheaper to employ workers?
The reason we need to make it cheaper to employ workers at any given level of take-home pay is that it directly increases effective wages and reduces poverty.
> What does society gain from having people work for 40 hours a week but still live in poverty?
It... doesn't. That's why need to have the government stop taking a bigger chunk out of pay to workers than any other income-generating transaction.
If we tax Walmart for every employee on government aid, they're going to throw away every application from disabled people and single parents, because they're going to cost hourly wage plus the additional welfare tax.
Who is that helping?
Who is that helping?
That makes sense. But why can't walmart just pay the bare minimum so that their employees don't qualify for welfare?
They do, unless you have additional circumstances which qualify you for aid (such as being a single mom, or having a disability).
The data clearly show that jobs at Walmart and McDonalds are the route that millions of people choose to improve their financial well-being and to kick a dependency on government handouts. We should want to see more employers raise the fraction of their workers on welfare benefits, not less.
Then why are these workers dependent on food stamps?
It's self-evident that someone working full time should earn enough to support themselves and their family.
> We should want to see more employers raise the fraction of their workers on welfare benefits
Why would you want that? That just means subsidizing worker salaries for these companies.
It's self-evident that someone working full time should earn enough to support themselves and their family.
> We should want to see more employers raise the fraction of their workers on welfare benefits
Why would you want that? That just means subsidizing worker salaries for these companies.
Holding down a job develops a work ethic and pride in one's accomplishment. These are things that a chronic benefit recipient may have in short supply, and are vital investments that will pay off many times over in a lifetime.
Very nice! And if they get paid an honest pay, they can even have a full belly and a roof over their head along with the work ethic an the pride in their accomplishments. And all of that without corporate-socialism.
Win-Win!
Win-Win!
High five! I love capitalism!
High five!
The question is, how are we going to get the corporations to pair a honest salary? Because I don't think they are going to do so by themselves. Just think of how much they are willing to spend on lobbying against a minimum wage of $15/h.
The question is, how are we going to get the corporations to pair a honest salary? Because I don't think they are going to do so by themselves. Just think of how much they are willing to spend on lobbying against a minimum wage of $15/h.
If we lower taxes and minimize regulations on employers, the market will settle on a stable clearing price for labor.
A stable price, yes. Not necessarily a honest one. Otherwise there would never have been a need for food stamps, right?
The US has fairly low regulations with regards to employment of workers and also quite low taxes, but struggles with honest worker wages.
Germany on the other hand has high worker regulations and not particularly low taxes. Worker payment there is quite honest.
The US has fairly low regulations with regards to employment of workers and also quite low taxes, but struggles with honest worker wages.
Germany on the other hand has high worker regulations and not particularly low taxes. Worker payment there is quite honest.
"Workers on Medicaid" doesn't sound so bad. Here in Spain everyone who works is on the community medical system :) Which is really great by the way.
Food stamps is awful though.. But I thought that McDonalds employees can take unsold food home? I know they can here, one of my friends worked there when he was young and he'd often bring home a big bag of burgers ;)
Food stamps is awful though.. But I thought that McDonalds employees can take unsold food home? I know they can here, one of my friends worked there when he was young and he'd often bring home a big bag of burgers ;)
The problem here is that the interests of the companies are not aligned with the interest of the workers.
That's why you have vast expenditures in the management that go largely unquestioned while there's a constant pressure to pay workers as little as possible.
That's why it is beneficial for McDonald's to spend millions on lobbying instead of raising the pay for their workers by once cent.
McDonalds made $1.76 in the third quarter of 2020 billion over the same period. That's 9000 USD per worker. I'm pretty sure that there are a lot of families that could make good use of that money.
That's why you have vast expenditures in the management that go largely unquestioned while there's a constant pressure to pay workers as little as possible.
That's why it is beneficial for McDonald's to spend millions on lobbying instead of raising the pay for their workers by once cent.
McDonalds made $1.76 in the third quarter of 2020 billion over the same period. That's 9000 USD per worker. I'm pretty sure that there are a lot of families that could make good use of that money.
Computing that ratio is challenging here because the franchisees are the ones hiring most of the lower wage employees, and their profits aren’t included in McDonald’s corporate. There are about 3 million people working at a McDonalds worldwide.
Giving McDonald’s corporate raises of $9k/quarter would mostly just move middle class and upper middle class further up, excepting a few corporate stores.
Giving McDonald’s corporate raises of $9k/quarter would mostly just move middle class and upper middle class further up, excepting a few corporate stores.
I don't really understand the global corporate structure. I guess you're right that much of these profits comes from other countries. Here's an idea; how about the workers in these countries get a pay raise?
Seriously. All that money these companies are making; it is exploitative profit. Even if distributing it among workers "only" rises the middle class a bit higher, at least that money goes into hands that have an immediate need for it. It not going to corporate buy-backs would be a win in itself.
Seriously. All that money these companies are making; it is exploitative profit. Even if distributing it among workers "only" rises the middle class a bit higher, at least that money goes into hands that have an immediate need for it. It not going to corporate buy-backs would be a win in itself.
Sure, I'd like to see it on some level. Probably the best way to increase the pay of entry-level McDonald's workers is to improve education outcomes so there isn't as much demand for unskilled positions.
That's a sound proposition.
> Sanders accused companies such as Walmart and McDonald’s of relying on “corporate welfare from the federal government by paying their workers starvation wages.”
This relies on a mistaken theory on how wages get set. No one gets paid based on what they need. If that were true, lottery winners would continue to work for free. If federal benefits to their employees were cut, the employees wouldn't have any more bargaining power to demand higher wages. On the contrary, they'd probably be inclined to work longer or take on additional work to make up for the loss in benefits, pushing wages further on. You saw exactly that relationship when unemployment benefits were extended during the pandemic and many people chose not to work because it would cut off their benefits or they had enough in benefits to not work for the time being.