# Corporate profits, employee wages, and government assistance: is it really this simple?? **URL:** \ **Category:** Factual Questions\ **Created:** [October 24, 2013, 6:24pm UTC](https://boards.straightdope.com/t/corporate-profits-employee-wages-and-government-assistance-is-it-really-this-simple/672142 "2013-10-24T18:24:07Z")\ **Posts on this page:** 1\ **Showing post:** 40
**Author:** ![CoastalMaineiac](https://avatars.discourse-cdn.com/v4/letter/c/e8c25b/32.png) [@CoastalMaineiac](https://boards.straightdope.com/u/CoastalMaineiac)\ **Post date:** [October 25, 2013, 3:46pm UTC](https://boards.straightdope.com/t/corporate-profits-employee-wages-and-government-assistance-is-it-really-this-simple/672142/40 "2013-10-25T15:46:52Z")
> [@Kyomara](#): > > The recent activity among fast food workers in favor of higher wages, as well as the ongoing debate over how much assistance the government ought to offer the people, have got me thinking: > > With things as they currently are, corporations make profits and pay their employees what the market will bear. Since the object is to maximize profit, they have no reason to pay their employees any more than they absolutely have to. > > Accordingly, you end up with a class of citizens who can barely afford to live despite working full-time. The slack is (hopefully) taken up by the government in the form of government assistance. The ultimate result seems to be that the corporations are allowed to keep as much of their profit as the system will allow, while taxpayers are forced to support their less-fortunate fellow citizens out of their own pocket. > > My question is: how vastly over-simplified is the above understanding of how the system currently works? And if I’m not actually that far off the mark, would there be any detriment to the economy if corporations were required to put more of their profits into a living wage, basic healthcare, etc., thus nullifying the current argument over size of government? > > If we did force corporations to share more wealth with their employees, at what point do we cross the line over to socialism, and what would be the detriment in it? > > Thanks! This is a tough one to find a solution to. The seemingly obvious situation would be to raise the minimum wage. On the one hand, a lot of fast-food type jobs are filled by high-school kids. They aren’t working to put a roof over their heads or food on their tables, as those things are provided to them by their parents. Those kind of jobs are often a teenager’s very first introduction to the working world, so it can be a valuable experience for them. If you raise the minimum wage, there would be less of an incentive for those restaurants to hire teenagers, and so more teenagers might not be getting that work experience which can be one factor to lead to higher paying jobs later on. On the other hand, it isn’t right for a business to expect full-time employees to work without paying them enough to live on. A person should not be expected to spend every waking hour on work, and only sleep four hours per night, just to make enough money to survive. It certainly isn’t right that the rest of us have to pick up the tab to support someone because employers don’t want to pay a livable wage. I think a minimum wage increase is the best way to go about solving the issue, but I don’t think it will be without near-term consequences; I just think the long-term benefits will outweigh them, especially if we index it to inflation. --- _[View the full topic](https://boards.straightdope.com/t/corporate-profits-employee-wages-and-government-assistance-is-it-really-this-simple/672142)._