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Democrats’ latest critique of Walmart is wrong — and dangerous

No, Medicaid is not “corporate welfare.”

For years, many Democrats have lamented the fact that some workers at highly profitable corporations — from Amazon to Walmart to McDonald’s — receive Medicaid benefits.

Their reasoning isn’t hard to understand: To be eligible for safety net programs, one must have a low household income. And why should anyone working at a highly profitable enterprise earn a low income? Surely, Walmart can afford to provide its cashiers with a living wage and health care benefits. By not doing so, the Walton family is “living off corporate welfare from the federal government,” as Sen. Bernie Sanders put it in 2020.

This argument is intuitive. But it is also incorrect — and utterly antithetical to the left’s broader vision for social welfare.

Unfortunately, Democrats are on the cusp of turning their party’s incoherent conception of “corporate welfare” into actual tax policy. In New Jersey and Colorado, lawmakers are currently pushing to impose a fine on companies for every Medicaid recipient they keep on their payrolls, in order to shore up funding for that program. As Republican Medicaid cuts weigh on state budgets, others could be tempted to follow their lead.

That would be a mistake. These proposals are likely to harm low-income workers, while reinforcing the very employer-provided health insurance model that progressives rightly oppose.

Medicaid is not “corporate welfare”

At a high level, there are two problems with the populist critique of Medicaid as “corporate welfare.”

For one, there is no real basis for the notion that the program subsidizes large companies by allowing them to pay their workers lower wages.

In fact, America just ran a vast, real-world experiment that falsified that hypothesis. In 2014, the Affordable Care Act offered states new Medicaid funding to enroll millions of workers who were previously ineligible. This gave researchers an opportunity to........

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