Monday, February 10, 2014


I keep hearing a claim that goes like this: 

"Wal-Mart costs taxpayers billions of dollars a year in welfare payments because they don't pay their employees a living wage"

This argument is utterly fallacious. The people making this argument fail to recognize that without Wal-Mart employing the employees in question, these people would likely be in a lower paying job or be unemployed. Either way, these latter options would cost the taxpayers even more money than if Wal-Mart employed them. It's also worth noting that worker compensation is based on worker productivity, not a worker's needs or wants.

Here is a thought experiment to consider: Suppose a potential worker applies for employment at two stores, Wal-Mart and Costco. Costco is not willing to hire this person but Wal-Mart is, for a relatively low wage of $8/hr. What store is worthy of condemnation by the public? The one that refused to hire the potential worker or the one that employees him at a low wage? Also, are not the taxpayers and the potential worker better off thanks to Wal-Mart's hiring of said worker? Or should Wal-Mart have denied the fellow a job as well and left him to apply for unemployment or welfare?

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