It isn’t just government subsidies that are in effect when a company doesn’t pay enough to keep workers alive.
The company can also be indirectly subsidized by draining the social and other capital of families, relatives, kind strangers, and whoever keeps those employees alive.
This is “efficient,” not actually efficient.
The alternative is to openly embrace social darwinism, which also deprives society and the economy in general all future value of the worker based on what their feasible value is right now, which may cause a rather significant net loss.
( @collapsedsquid may know if someone has explicitly studied this )
Making it impossible to fire people isn’t a good idea, but letting companies free ride on society’s / the country’s generosity isn’t such a great idea, either.
Now, you may say that direct wage subsidies have to come out of taxes, but those taxes likely aren’t going to come from the scarce poor-families-capital currently subsidizing Walmart, and it significantly reduces the competitive advantage of such behavior. Additionally, with more jobs profitable for more workers, there is more competition between employers to quit being jerks to the working class, which is currently distorted by the massive power imbalance between the working class as individuals and corporations with their collective bargaining power. It’s also less expensive than welfare since it stacks public funding with private funding, instead of running a straight loss, and if structured correctly, it still strongly incentivizes these workers to pursue higher-paying, more economically valuable work.
Or we could start billing Walmart for the billions of dollars in public assistance their workers receive, but that would be a much less efficient solution with similar effects to raising the wage floor.
If walmart vanished, those workers would still be getting public assistance. They are purely making the situation better. If there was anyone around who would be paying those workers better, or enough to NOT need public assistance, they would be working there instead. This is a common progressive instinct: Making the perfect the enemy of the good. It’s far far better that walmart exists and pays the wages it does than if it didn’t. And the most important beneficiaries of Walmart’s low wages aren’t even Walmart’s profits: It’s everyone, primarily poor people, who shops there.
By subsidizing Walmart’s cheap goods and convenience (having a huge selection and being open 24 hours), the USG is actually helping out the poor people a lot!
If you put a bomb in someone’s skull, you have a lot of leverage and can get them to do just about anything, up to the point that they are willing to die to refuse your demands.
And if they’ll merely be homeless? Well that’s not quite as much leverage, but it’s still a lot of leverage. Walmart can walk away with only a few less hours served, but the workers may not necessarily be able to. This imbalance in the amount of skin in the game may mean that Walmart wages are artificially low, even without Medicare preventing their employees from dying of medical conditions.
In this case, I feel it would be better for the workers and their working conditions if we made the subsidies more explicit, so Walmart and everyone else could stop pretending they aren’t being effectively subsidized. And while the effective hourly wages might not rise as much due to not generating that much value, the influx of competing job options into the marketplace would likely result in competition over working conditions, which are one of the things that makes life for the working class so unbearable.