Government Assistance Increases Wages!

All too frequently the argument is made that government assistance programs subsidize low wage employers. That is, firms like Wal-Mart, McDonalds and Target, to name just a few, are able to pay very low wages precisely because management knows that their low paid employees will qualify for Medicaid, food stamps (officially known as the Supplemental Nutritional Assistance Program) and other such public assistance. As a result, it’s assumed that these public programs allow firms to pay lower wages than would be possible were these programs not to exist. To be blunt, this position is completely wrong.