Friday, January 12, 2018

282. Wealthy companies, welfare workforce

A report from Policy Matters Ohio detailed that Amazon, now one of Ohio’s largest employers, has risen among the ranks of companies that find their employees receiving government assistance due to low or unsustainable wages.

Research director Zach Schiller noted there were 1,430 Amazon employees or family members getting assistance under the Supplemental Nutrition Assistance Program as of last August, according to the Ohio Department of Job and Family Services. “That ranked the company 19th among all Ohio employers. Just months before, it wasn’t even in the top 50,” he said.

Of course, it’s not just Amazon, as other companies such as Wal-Mart often leave their employees needing more. Plain Dealer reporter Janet Cho wrote in 2016 that Ohio’s median wage is over $16 an hour, and “it’s clear that Wal-Mart remains a force pulling that median wage downward. As of last year, 14,114 Walmart employees and family members qualified for food stamps in Ohio, because the family member who worked at Wal-Mart was paid so little.”

You may recall that last year Amazon accepted proposals from across the country to build their second headquarters. “We expect to invest over $5 billion in construction and grow this second headquarters to include as many as 50,000 high-paying jobs – it will be a full equal to our current campus in Seattle,” the company announced. “In addition to Amazon’s direct hiring and investment, construction and ongoing operation of Amazon HQ2 is expected to create tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community.”

Desperate for jobs, cities from Lorain to Atlanta sent in proposals offering Amazon billions in tax breaks and other incentives. PBS reported, “Some candidates have focused their bids on generous incentive packages. In pitching Newark, N.J., offered $7 billion in tax incentives, property tax abatements, and breaks from the local wage tax. California will offer $300 million in tax incentives over several years if one of its cities is picked.”

It is the evolution of a market economy, or perhaps the result of it, that local governments have to compete for businesses that offer jobs and tax revenue. And while the resulting public and private partnerships and agreements may be good for the local economy, too often local governments serve at the mercy of businesses.

As complicated as that can be, it is inexcusable that these businesses — often very profitable international corporations — do not pay their employees a level above public assistance.

This country flourishes with a strong middle class. And a strong middle class means that workers of major corporations should not need to be subsidized by taxpayers to cover their basic needs. Henry Ford paid his employees $5 per day (more than double the average factor wage at the time, and about $15.40 per hour in today’s currency when adjusted for inflation) to not only stabilize his workforce, but also create a class of people who could afford his product.

Yet, here we are. Cities compete for companies through tax breaks and other incentives and the federal government made life even easier by giving corporations a tax break. Shareholders, CEOs, and other executives make millions while their employees cannot afford to feed their families. And the thought of a $15 minimum wage (which is barely more than $30,000 per year) with affordable health care is somehow considered absurd.

It is far from absurd, in fact, it should be a requirement for any company receiving corporate welfare. If governments are asked to create favorable business environments, then businesses should take care of their employees. Government shouldn’t have to do both.


  1. Yes, of course, businesses should take care of their employees, since government shouldn’t... It's absolutely clear!