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Hm, I was thinking of it more like an either/or. Suppose I phrased it as a true/false question: Government-provided welfare services like food, medical and housing assistance enable employers to pay lower wages. If the existence of the welfare programs pushes wages in both directions, could you explain the mechanism on each side? I did that a bit for #2: people need to pay for housing and health and food, "the money has to come from somewhere," if some of it comes from the government, it doesn't have to come so much from work, so people are less inclined to work, so employers have to make working more attractive, ergo higher wages.