Wages

https://www.facebook.com/groups/DiscussionsOnEconomics/permalink/643905195631890/

I agree that people are responding to incentives, and that government welfare does have an effect on labor allocation.
However the real question here is about specific wages declining as a result of welfare.

Remember that prices are determined by supply and demand. Wages are the price of labor, where the supply comes from employees and demand comes from employers. As the customer, the employer is seeking to purchase the greatest labor productivity to generate the highest profit, which does not necessarily mean they will pay the lowest cost possible. As an employer offers a higher and higher wage for any given job, the pool of labor resources available to them increases as more and more employees will be interested in working for that higher wage. While this also means that the productivity of those employees will need to be higher to cover the costs, all that the employer is concerned with is profits generated by that employee. If an employer offers $9/hour in wages and can only command labor resources that produce $10/hour in revenue then this arrangement is going to be less attractive than a situation where an offer of $12/hour commands labor resources that produce $14/hour in revenue, a possibility that could occur due to differences in skill levels as they pertain to applied capital goods for example. How much government welfare those employees may or may not be receiving are not part, and can not be part, of this consideration.

A similar example would be a grocery store customer looking to purchase a bottle of wine. If the customer is only willing to spend $2 on a bottle of wine then his choices of wine are extremely limited compared to a willingness to spend $10 on a bottle of wine. Just like the employer however, the customer is only concerned with 'profits' or rather how much satisfaction they will get from that wine purchase compared to that customer's value of money. If the customer does not like the $2 wine as much as the $2 they would have to spend but they absolutely love the $10 wine far more than the $10 they would have to spend, then they will choose the more expensive wine. Even if the grocery store is being subsidized $1 per sale of a $2 bottle of wine this will have no effect on a customer who is more satisfied with a purchase of the $10 bottle of wine.

There is a sense in which welfare does have an effect on labor prices, although the mechanisms are more indirect than assessing labor costs from the perspective of the employer.
In an environment with employee welfare at X value, an employer can offer a job for Y wages and this becomes effectively an offer of Y + X wages, increasing the pool of available labor resources to the employer without the employer having to pay for it. Typically welfare is only offered to individuals of no means or modest means (that's the intention anyway) and to a certain degree the employer may offer jobs that pay wages within this modest means zone to take advantage of the now larger labor pool at the expense of not offering higher wage/higher productivity jobs. The result is the employer may not invest in capital equipment as much as they otherwise would, since they are now planning on using lower skilled labor. Higher paying jobs are never created or are exchanged for several lower paying jobs.
In an environment without employee welfare, the same employer can offer the same low pay for the same low productivity jobs while having to deal with a smaller labor pool. This does not increase the wages of those lower productivity employees because they are still providing the same profit margin to the employer. The only difference is that now the employer will face a situation where offering lower pay for the lower productivity jobs they are currently tooled for may not provide them with enough employees. This will incentivize the employer to look for alternative combinations of labor and capital to fill these same needs, most likely requiring more capital intensive labor processes, allowing them to offer higher wages, allowing them to expand their available pool of labor resources.

"I disagree. These employers are no doubt well aware of the benefits people are receiving, and can adjust their wages accordingly."

I'm sure that the employers are aware of the benefits but they cannot make adjustments to wages based on them.
What would the employer adjust their wages to?
Wages come from productivity. Unless welfare is making people less productive to the employer then the wages can't go down.
If an employer decides that their employees are receiving X dollars in welfare benefits and as a result they reduce their offered wages by X (or some percentage of this based on an equation) competitors can still bid up those wages to the market rate.

"I am saying that they can reduce their wages and get the same amount of work because people are willing to do that work for lower wages because they are being supplemented by the government."

Employers will not be able to get the -same- amount of work, they are offering a lower wage. When you offer a lower wage, you are decreasing the amount of labor resources you can command.

"And yes, competitor can indeed bid up wages, but at the same time, they too want to keep their costs down."

If you are saying that a competitor will forgo an opportunity to increase their profits by offering a more competitive wage to an employee who is by definition underpaid, you are mistaken.

"But when you have companies that are essentially holding an oligopsony on demand for low skilled labor, they can indeed set those lower wages."

Employers cannot set lower skilled wages, even if they are part of an oligopsony. They would be constrained by the same forces that an oligopoly, or monopoly/monopsony faces when attempting to push prices outside of market limits, specifically that the market finds alternatives. In the case of oligopsonies/oligopolies there are also problems of backstabbing within the cartel in order to take advantage of the profit opportunites. When businesses and governments attempt to meddle in the market, all they can do is shove people and resources out of some places causing unnecessary misallocations, bottlenecks, and waste, but will eventually find outlets elsewhere.
In the case of low skilled labor, if employees are being consistently underpaid, this will drive more people to become employers to take advantage of those profits, which will increase competition and raise the price. If the government prevents new employers from entering the market, then employees will have a much greater incentive to grow their skills so that they can leave the monopsonied low skill labor market. And then finally if this is somehow suppressed, employees can forgo employment opportunities for self-employment.

"Offering that lower wage doesn't guarantee better work anymore than offering higher wages guarantees better work."

Wages don't guarantee better work, they guarantee a larger pool of -potential- employees. Employees still need to be interviewed and evaluated, and their contribution to the company's bottom line considered if they are hired. If you offer a higher wage job to the public, you will get more applicants. When your pool of applicants is larger, your chances of a potential employee with the right qualifications seeking you out increases. When you offer an opportunity for a higher paying position to current employees, you will get more applicants than if you provided not as high paying of a position. As the pool of willing employees increases, so does the competition among the applicants to get that position, driving supplied qualifications up.

"Depends. He still has to keep costs in mind. You also have to take into account the supply of unskilled labor and how much those competitors demand."

That is irrelevent to my point. Profits are revenues - costs. Competitors will not forgo -profits-. And yes that's what I've been saying all along, it is the supply/demand of laborers, not the consideration of labor costs and welfare benefits, which determine wages.

"Offering that higher wage may not come with higher profits depending on a host of factors that any business has to deal with."

If a new employee or newly promoted employee is not producing enough to cover the wages an employer has agreed to pay them then that is a technical problem for that specific employer and is unrelated to this topic.

"Of course they can offer lower wages, if people are willing to work for them."
Yes, -IF- they are willing, which I have demonstrated they would not be since they are being offered a lower wage. We are talking about the same pool of lower wage employees being willing to take a pay cut from their employer even though their productivity in a market with competitors to that employer remains the same.

"...they can still make ends meet by taking the subsidy from the government."
This is irrelevant to the topic. Employees will happily take X wages + Y welfare, over X - Z wages + Y welfare.

"As to competitors, they too have to be aware of costs, be they labor costs or what have you. Depending on the business, it may not be beneficial to spend more on labor, and spending more on labor is no guarantee of higher revenue."
I've already covered this. I won't repeat myself.