On Walmart, And Who Bears Responsibility For the Poor

Note: Origi­nally posted in Dis­cus­sion, ed­ited to take com­ments there into ac­count.

Yes, poli­tics, boo hiss. In my defense, the topic of this post cuts across usual tribal af­fili­a­tions (I write it as a liberal crit­i­ciz­ing other liber­als), and has a cou­ple strong tie-ins with main LessWrong top­ics:

  • It’s a tidy ex­am­ple of a failure to ap­ply con­se­quen­tial­ist /​ effec­tive al­tru­ist-type rea­son­ing. And while it’s prob­a­bly true that the peo­ple I’m cri­tiquing aren’t con­se­quen­tial­ists by any means, it’s a case where failing to look at the con­se­quences leads peo­ple to say some par­tic­u­larly silly things.

  • I think there’s a good chance this is a poli­ti­cal is­sue that will be­come a lot more im­por­tant as more and more jobs are re­placed by au­toma­tion. (If the pre­vi­ous sen­tence sounds ob­vi­ously stupid to you, the best I can do with­out writ­ing an en­tire post on that is vaguely ges­tur­ing at gw­ern on neo-lud­dism, though I don’t agree with all of it.)

The is­sue is this: re­cently, I’ve seen a meme go­ing around to the effect that com­pa­nies like Wal­mart that have a large num­ber of em­ploy­ees on gov­ern­ment benefits are the “real welfare queens” or some­such, and with the im­plied mes­sage that all com­pa­nies have a moral obli­ga­tion to pay their em­ploy­ees enough that they don’t need gov­ern­ment benefits. (I say men­tion Wal­mart be­cause it’s the most fre­quently men­tioned villain in this meme, but oth­ers, like McDon­alds, get men­tioned.)

My ini­tial aware­ness of this meme came from it be­ing all over my Face­book feed, but when I went to Google to track down ex­am­ples, I found it com­ing out of the mouths of some fairly promi­nent con­gress­crit­ters. For ex­am­ple Alan Grayson:

In state af­ter state, the largest group of Med­i­caid re­cip­i­ents is Wal­mart em­ploy­ees. I’m sure that the same thing is true of food stamp re­cip­i­ents. Each Wal­mart “as­so­ci­ate” costs the tax­pay­ers an av­er­age of more than $1,000 in pub­lic as­sis­tance.

Or Bernie San­ders:

The Wal­mart fam­ily… here’s an amaz­ing story. The Wal­mart fam­ily is the wealthiest fam­ily in this coun­try, worth about $100 billion. own­ing more wealth than the bot­tom 40 per­cent of the Amer­i­can peo­ple, and yet here’s the in­cred­ible fact.

Be­cause their wages and benefits are so low, they are the ma­jor welfare re­cip­i­ents in Amer­ica, be­cause many, many of their work­ers de­pend on Med­i­caid, de­pend on food stamps, de­pend on gov­ern­ment sub­sidies for hous­ing. So, if the min­i­mum wage went up for Wal­mart, would be a real cut in their prof­its, but it would be a real sav­ings by the way for tax­pay­ers, who would not hav­ing to sub­si­dize Wal­mart em­ploy­ees be­cause of their low wages.

Now here’s why this is weird: con­sider Grayson’s claim that each Wal­mart em­ployee costs the tax­pay­ers on av­er­age $1,000. In what sense is that true? If Wal­mart fired those em­ploy­ees, it wouldn’t save the tax­pay­ers money: if any­thing, it would in­crease the strain on pub­lic ser­vices. Con­versely, it’s un­likely that cut­ting benefits would force Wal­mart to pay higher wages: if any­thing, it would make peo­ple more des­per­ate and will­ing to work for low wages. (Cf. this this ex­cel­lent cri­tique of the anti-Wal­mart meme).

Or con­sider San­ders’ claim that it would be bet­ter to raise the min­i­mum wage and spend less on gov­ern­ment benefits. He em­pha­sizes that Wal­mart could take a hit in prof­its to pay its em­ploy­ees more. It’s un­clear to what de­gree that’s true (see again pre­vi­ous link), and un­clear if there’s a prac­ti­cal way for the gov­ern­ment to force Wal­mart to do that, but ig­nore those is­sues, it’s worth point­ing out that you could also just raise taxes on rich peo­ple gen­er­ally to in­crease benefits for low-wage work­ers. The idea seems to be that morally, Wal­mart em­ploy­ees should be pri­mar­ily Wal­mart’s moral re­spon­si­bil­ity, and not so much the moral re­spon­si­bil­ity of the (the more well-off seg­ment of) the pop­u­la­tion in gen­eral.

But the idea that em­ploy­ing some­one gives you a gen­eral re­spon­si­bil­ity for their welfare (be­yond, say, not trick­ing them into work­ing for less pay or un­der worse con­di­tions than you ini­tially promised) is also very odd. It sug­gests that if you want to be vir­tu­ous, you should avoid hiring peo­ple, so as to keep your hands clean and avoid the moral con­ta­gion that comes with em­ploy­ing low wage work­ers. Yet such a policy doesn’t ac­tu­ally help the peo­ple who might want jobs from you. This is not to deny that, plau­si­bly, wealthy on­wers of Wal­mart stock have a moral re­spon­si­bil­ity to the poor. What’s im­plau­si­ble is that non-Wal­mart stock own­ers have sig­nifi­cantly less re­spon­si­bil­ity to the poor.

This meme also wor­ries me be­cause I lean to­wards think­ing that the min­i­mum wage isn’t a ter­rible policy but we’d be bet­ter off re­plac­ing it with guaran­teed ba­sic in­come (or an oth­er­wise more lav­ish welfare state). And guaran­teed ba­sic in­come could be a re­ally im­por­tant policy to have as more and more jobs are re­placed by au­toma­tion (again see gw­ern if that seems crazy to you). I worry that this anti-Wal­mart meme could lead to an odd left-wing re­sis­tance to GBI/​more lav­ish welfare state, since the policy would be branded as a sub­sidy to Wal­mart.