The Problem With Getting Your Way

At some point, it became an issue that Wal-Mart helps its low-wage employees learn how to qualify for food stamps. This is old news; see, for example, this CNN article dated June 5, 2013.

The argument against this sort of thing runs as follows: Wal-Mart can only get away with paying its employees such a low wage because the federal food stamps program "makes up the difference." In absence of food stamps, Wal-Mart would not be able to attract workers at such low wages, and would thus have to raise their wages. The difference between Wal-Mart's current wage rates and what they would otherwise have to pay represent a net gain to Wal-Mart. Thus, the food stamps program effectively subsidizes Wal-Mart's labor costs.

Jason Brennan at Bleeding Heart Libertarians responded to this criticism:
Isn’t it more plausible to think that if there’s some enforceable positive duty to provide Bob with enough stuff to lead a life, that all of us, together share this burdensome duty, rather than just Bob’s employer? Why should Bob’s employer, specifically, be the one that has to bear the burden and lose all this money to keep him alive (at whatever level you consider decent)? This just seems like a kind of moral outsourcing to me. Why not instead Bob’s neighbors, parents, friends, or sexual partners? Bob does McBurger a service, and McBurger pays him for that service.
Brennan makes a good point. That some people in our communities are not fully capable of providing for themselves is indeed a moral quandary for the rest of us. If we can take care of ourselves, and even have something left over, the virtue of charity suggests that we ought to rise to the occasion by helping out those who are worse-off than we are. If you require a more utilitarian justification for this, then allow me to suggest that communities are happier overall when everyone's friends and family members are also happy. I'm in favor of happiness, and so I count making others happy a net-benefit to all those who interact with the other people around them.

However, one problem that now arises is, why did we create a food stamps program to begin with? From my recollection of it, food stamps and other parts of "the social safety net" were created because American society felt morally compelled to do something about those who were worse-off. Against the wishes of the free marketeers, America developed a system into which we all pay tax money. From that pool of money, government programs dole out food stamps and other funds and services to those who cannot afford them of their own accord. The safety net was developed alongside a progressive tax scheme that ensures that those people and businesses that are most-able to pay, do indeed pay the most, both in terms of absolute contribution and relative (percentage) contribution.

Wal-Mart, being one of the largest tax-paying entities in the country, therefore heavily supports the social safety net. It is one of the safety nets' principal benefactors.

How is it, then, that we can say that Wal-Mart is being subsidized by the government?

One of the problems with getting your way in the political arena is that you no longer have the ability to complain that you didn't get your way. This Wal-Mart situation is a case in point. Because those who favor a social safety net funded by the rich actually did end up with a social safety net funded by the rich, they can no longer argue that the safety net doesn't exist. They can no longer argue that Wal-Mart isn't making its fair and moral contribution to the safety net. Because the existence of the safety net was an outcome of representative democracy - and we free marketeers thus have to suck it up and deal with it - so advocates of government intervention must also suck it up and deal with the fact that Wal-Mart's level of contribution in to the social safety net is fair and proper, according to what we all agreed to.

To now argue that Wal-Mart is being subsidized by a system that was specifically designed to ensure that Wal-Mart financed a social safety net by actually financing and promoting the use of that system is totally disingenuous. All such arguments are invalid and, in fact, totally dishonest.

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