Friday, September 07, 2018

on the bezos bill

Senator Sanders so called Bezos bill has caused an interesting backlash. Some liberal economists, like Jared Bernstein, think that the bill will result in unemployment.

In brief, the bill proposes to charge those companies, like Amazon and Walmart, who make a habit of employing workers at such a low wage that they have to depend on foodstamps. Basically, Sanders bill calls this a social cost that the company should shoulder.

Bernstein’s worry is that the workers will be fired, since the company does not want to shoulder that cost. It is an interesting worry, because it depends on the assumption that there is enough slack in the logistical or clerical line that certain workers will be priced out. In other words, X company employs X amount of employees to get a certain task done – stock shelves, load packages onto trucks, etc. But they hire more than they need. Thus, they can fire some without endangering the process by which products are transported, shelved, checked out, etc. However, even if this is so – and in a near full employment situation, this is more plausible than in a less than full employment situation – they are still going to have to pay for the social costs or raise the pay for those employees doing these tasks. They can’t just not do them. So it is not at all clear to me that this argument works. Firstly, at the least slack in demand, these workers will go anyway. Secondly, the incentive to pay workers more, in order to avoid shouldering the government mandated costs, is good for the remaining workers.
Another argument, and frankly, a dumber one, has been presented by Dylan Matthews, at Vox. His argument is pretty much that we rely on big corporations to get the crummy social welfare that we already have. If we do this, who knows but that the corporations will turn against the whole idea of food stamps. As proof of this hitherto unseen altruism lurking in the corporate heart, Matthews adduces Walmart’s contribution to a think tank that leans towards increasing the social welfare net, and he tweets: “Walmart's strong support for food stamps (because it means more poor people can buy food at Walmart) is one of the few non-shit things about America's fucked up political economy, and something that ought to be encouraged rather than assailed.”

A funny thing about that strong support: according to a report in 2014 described on Huffington Post, “59 percent of the Walmart PAC’s contributions to House members who voted on the minimum wage increase went to candidates who opposed the increase, while 95 percent of the Waltons’ contributions went to candidates who opposed the increase.” Now, I know this is takin’ a big leap, but I’d guess, in America’s fucked up political economy, that you could draw a venn diagram of people who support food stamps and those who support restricting food stamps and freezing the level of them and the people who oppose increasing the minimum wage, and you would see a nearly total overlap. We could start with Arkansas Senator Tom Cotton, who is well known for wanting to squeeze out the number of people getting food stamps with various bureaucratic procedures weeding out those on disability.

So my idea is that no, Walmart’s eyes on the prize do not entail going to the mat about food stamps.
Now, to address what these liberals and neo-liberals don’t: the discouragement built into a system in which work gets you food stamps. The number of men who have opted out of employment over the past 20 years is a pretty significant factor in the Heartland. One of the reasons is that wages are low. You can make equal money by using the social welfare net. Charging corporations for using that social welfare net as a labor cost cutter might actually provide incentives for these men, as the wages rise to avoid the charges entailed by the surcharges created by corporate rentseeking.

This is one possibility, at least, and it is more likely than the possibility that Walmart, stung to its philanthropic core by the Bezos bill, will cease supporting food stamps.

There might well be a model or argument out there that makes a more plausible case for the Bezos bill having a downside. But these arguments surely aren’t it.

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