Is the government subsidizing Amazon and Walmart by giving welfare benefits to their low paid employees? True or False?
Earlier today we posted THIS VIDEO from Tucker Carlson.
Econ professor Donald J. Boudreaux sent a message to Tucker Carlson challenging Carlson’s assertion that the government subsidizes Amazon by providing welfare benefits to the low paid workers. He argues that the wages are low because the workers are not sufficiently productive to earn more. He ends on a dismissive note: “I really do wish that Fox News would hire a competent economist to help you avoid making such economically illiterate arguments.”
Boudreaux seems to be one of those academics who follows his logic right over the cliff. He also pulls some Bernie Sanders proposals into the discussion which Carlson has not endorsed and which therefore are what in logic is called a red herring. He is right that Sanders’s proposal to recover from corporate employers any welfare benefits to their employees is a bad idea. This would function as another form of minimum wage and would lead to people losing their jobs.
However, that does not make Boudreaux right on his central assertion. If government welfare benefits were not available, fewer people would apply for the low wage job, because they couldn’t live on it. With a lower supply of workers, demand for those remaining would increase and wages rise. So Carlson is right.