Sunday, July 17, 2016

Corporate subsidy fact of the day

FT has this article on the struggle to increase minimum wages in the US,
Walmart’s founding family, worth a net worth $130bn according to Forbes, has been a target in the debate over inequality, which has gained traction in this presidential election year. It has also highlighted the extraordinary wealth of one family while many of its staff struggle to make ends meet. Nita Fischer, a single mother, says she was coerced into leaving her Walmart job paying $10.14 an hour when she was pregnant and to reapply after three months. She said she is earning $9 an hour and is reliant on the US government to pay her $294 a month in food stamps — which are spent at Walmart.
Such transfers must constitute one of the largest corporate subsidies in the history of the world!

In this context, I have blogged earlier that, contrary to conventional wisdom, even including all the direct welfare subsidies, the rich benefit disproportionately more from government spending than the poor. In fact, even leaving aside the things that people like Mariana Mazuccato talk about, a very large proportion of corporate fortunes are directly built on the foundations of tax payer financed systems. And this is true for countries across the world - developed and developing, democratic and autocratic, capitalist and socialist, eastern and western. 

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