Essentially, a low minimum wage adds up to a massive stealth subsidy for corporate America. A recent University of California, Berkeley study reveals that the nation's largest fast-food chains earn $7 billion a year in inflated profits because the rest of us pick up the tab for the food stamps, housing vouchers, tax credits and Medicaid benefits that the businesses refuse to cover by paying adequate wages. Big-box stores get an even sweeter deal. A federal analysis of a Walmart Supercenter in Wisconsin found that safety-net subsidies ran approximately $5,500 per low-wage associate. If that's representative, every Supercenter in America is enjoying a rolling bailout of nearly $1 million a year.
Taxpayer subsidies to the working poor make welfare queens of some of the world's most profitable corporations. "The large restaurant chains, the Walmarts – they hold themselves up as captains of the free-enterprise system," Rep. Miller says, "but their whole business plan is dependent on using the social safety net."
One of the most expensive programs that taxpayers fund is the Earned Income Tax Credit – which doles out $60 billion in welfare payments to poor working parents every year at tax time. The EITC lifts millions out of poverty. But thanks to the inadequacy of the minimum wage, it also creates a perverse incentive. The EITC subsidizes poverty-wage work, so businesses can – and do – drive wages even further below the poverty line.
More than one-third of the EITC is pocketed by employers through artificially low labor costs, according to a Princeton economic analysis. Worse: The EITC actually hurts many single workers without kids, who don't qualify for the subsidy and are made strictly worse off by its existence.
Well I never, the taxpayer funds the shortfall in a/ incomes of the lowest paid workers on minimum wage b/ the profits of those companies who employ those workers. They therefore have no desire to increase the minimum wage.
What do the home grown "think tank" have to say about that?
