Low Wages Leave Public to Pick up Tab with Food Stamps, Medicaid

Last week, Marketplace spotlighted a new study from the UC Berkeley Labor Center, which finds that poverty-level wages cost taxpayers $152.8 billion each year in public assistance.

Looking at South Dakota, the Berkeley researchers calculate that each year, 24,000 working families use SNAP/food stamps, 50,000 get the Earned Income Tax Credit, and 68,000 use Medicaid (see page 6 of the full report). Working South Dakota families receive $286 million in federal assistance, 56% of the total assistance Uncle Sam spends on these programs in South Dakota (p. 7). Looking at state costs, the researchers find that South Dakota spends $48 million out its $89 million (56%) for Medicaid/CHIP and TANF on working families.

When employers don’t respect the dignity of their workers with wages that can cover basic needs, we decent citizens step in with food stamps, Medicaid, and other assistance to make sure those workers and their children can survive. Public assistance will always be less efficient than direct wage payment: individuals have to apply, public officials need to administer. It would be fairer and more efficient for employers to directly pay employees a living wage than to let employers shift the cost of doing business to the rest of us taxpayers.

12 Responses to Low Wages Leave Public to Pick up Tab with Food Stamps, Medicaid

  1. larry kurtz

    You poor bastards.

    The fight against Obamacare isn’t just political. Rather, it’s become a cornerstone of conservative governance — and it’s left red states poorer and residents of red states sicker, and might get a lot worse if the Supreme Court rules against Obamacare this year.


  2. Jeff Barth

    Responsible businesses who pay a living wage along with their workers and investors are taxed to subsidize the low wage operators. Societal parasites like those who pay poverty-level wages, the tobacco business and the booze business should not be subsidized.

  3. mike from iowa

    korporate amerika doesn’t give a flying phig where their profit comes from or who gets hurt making profits. Uncle Sam needs to raise korporate taxes to where korp. amerika pays for the welfare they cause.

  4. Francis Schaffer

    mike from iowa – think tax code. Businesses who pay living wages in their geographic location receive more deductions or lower tax rate than businesses who don’t. Also, since I continue to hear about job creation, I wonder in what sectors people want those jobs created? I think tool and die myself as all other manufacturing is based off those businesses so give them immigration preference for employees and above expense deductions on their taxes. It is always follow the money.

  5. Parasites! There’s a word I want to hear on the campaign trail (says the guy who will never get hired as a campaign consultant ;-) ).

  6. Francis—tax code—ah! If I own a business, I get to deduct wages from my taxable income, right? The more I pay my workers, the less I pay in taxes. But wait: I get to deduct more if I hire immigrants?

  7. Jeff Barth


    But corporate taxes could be lower without WIC, food stamps, low income school lunches, indigent medical care, indigent burial costs (we don’t leave bodies in the park just because they have no money), public paid legal defense and MORE!

    If people made enough money to cover rent, food, health care and child care, we could all feel better about ourselves and the condition of the working poor.

  8. Deb Geelsdottir

    Jeff, this is a great phrase I want to remember: “Societal parasites.”

    The First Family of Societal Prarsites? The Waltons of Arkansas!

    They perfected their blood-sucking skills decades ago. Their role models include the Carnegies, Rockfellers, MN’s own J.J. Hills, the Morgans, and other slime balls.

    I’ll stop ranting. Jeff, your last comment was brilliant too.

  9. Jeff Barth

    Deb, you are kind.

  10. Deb Geelsdottir

    Jeff, you are succinct.

  11. In the last 5 years, how many of you actually perused the job boards or talked to employment agencies? Do you think employers are paying for experience and good references? Do you think basic jobs have wages that have increased in the last 10 – 15 years, which pay for cost of living increases?
    Are you seeing jobs, which indicate the company is increasing jobs, or are they just replacing positions because of their turn over? You know… because they have people leaving for another low paying job, but might have another crumb than the last? You get to start at the bottom for another $.50/hr., but have hope your wage will increase quickly?
    Look at the positions in smaller to medium companies, which are offered again after a year. What about the people who do not want to work for the large financial corporations or hospitals? What does SF have to offer? Supposedly there are jobs in SF. If you look at the job boards, you will see many of the employment agencies are offering jobs from the job boards. Then there is the new siouxfallshasjobs.com board, which basically gives you jobs from the job boards. What a farce.
    How many of you have been force to quit or let go because you are making too much money, then been replaced by someone who works for very little? How about that grey ceiling? Let’s talk about the laws to protect employees are no longer in existence.

  12. Francis Schaffer

    CAH, I was targeting one business sector for skilled immigrants. Yes, use the tax code.