Bernie Sanders has proposed an Act of Congress whereby companies get charged a tax equal to the amount of welfare their employees receive. We’re even seeing admiring glances at this idea here in the UK - when a more silly and counter-productive idea is difficult to envisage.
The major effect here will be that those who might gain welfare payments will not get hired. Which really isn’t the point at all now, is it?
Sanders has also been highlighting some of the 19th-century working practices used by Amazon to control and discipline its workforce inside of its fulfilment centres. Sanders’ bill – the Stop Bad Employers by Zeroing Out Subsidies Act, or the ‘Stop Bezos Act’ – would tax employers like Amazon when their employees require federal benefits.
The Senator is right to push Amazon on this.
If an employee of a large company gets welfare then the company is charged that welfare bill. Idiocy.
First, the assumption is that SNAP (food stamps), Medicaid, school lunches and Section 8 housing (the programs mentioned) are subsidies to the employer. They’re not, all are paid upon the basis of income, not work status (some SNAP excepted). Thus they don’t lower wages and cannot be subsidies to employers. Quite the contrary, they raise the reservation wage and thus are anti-subsidies to employers. A simple test of this, abolish those benefits and wages will rise will they?
It’s also true that such benefits are granted upon household circumstances, not individual. So, that single mother of the sick child is never going to gain employment if an employer is on the hook for the Medicaid bill, is she?
But as ever weirdness and foolishness cross the Atlantic so it won’t be long before we have more applauding this idea. Better to stamp on it right now than wait. It’s a very silly idea indeed - but then we’ve election season over there which is why it’s being suggested in the first place.