COMMENTARY | People often criticize government workers as overpaid, receiving comfortable salaries, generous benefits, and iron-clad job protections in exchange for reduced competitiveness. However, not all government funds for job creation are being spent so lavishly: According to NBC, the public policy group Demos claims that government grants and subsidies to private-sector employers for job creation purposes are often misused, being utilized to create and fill jobs paying $12 per hour or less rather than fair, prevailing wages. This is worrisome because it contradicts the basic purpose of government-funded employment.
Government-funded employment is supported as a tool of middle-class reinforcement, with government workers typically receiving stable wages and salaries with comprehensive benefits. Critics, however, have long decried government hiring as inefficient, alleging that government workers make too much money for too little productivity. Certainly, the negative stereotypes of the government bureaucrat are oft depicted in the media, entrenching critics’ views of the lazy public-sector drone.
Now something even worse than the bureaucrat drone stereotype is occurring: The government-sponsored wage slave. Instead of hiring workers directly and paying them fairly, government funds are going, inadvertently, to hire minimum wage employees for private-sector companies. These employers are grossly misusing these government grants and subsidies to line their own pockets. Instead of hiring a dozen decently-paid employees, a corporation may use a government grant to hire a score of part-timers and pocket the difference.
Government grants and subsidies should come with stricter guidelines and oversight. Blindly giving private sector employers funds in hopes that they will reduce unemployment is insufficient to ensure economic growth. Though minimum wage work is better than nothing, it is far from what is needed for economic stimulation. Those earning less than $12 per hour often cannot afford the consumer purchases that stimulate growth. In fact, low-wage earners are more likely to end up in debt, requiring much of their future earnings to be eaten up by interest payments rather than going to GDP-boosting new production.
The government should not be supporting low-wage, part-time jobs either overtly or tacitly. If employers want government assistance in hiring workers they should be forced to hire at a decent wage and offer comprehensive benefits. This would establish a precedent through which such employers would be encouraged to raise the pay and benefits of all workers.