A Subsidy to Wages Increases Employment The free market wage for low-skill workers is $10.50. A subsidy to firms that hire low-wage workers increases the wage received by workers to $12 and reduces the wage paid by firms to $8. As a result, employment increases from Q_m to Q_s. The cost of the subsidy to the government is the subsidy amount, $4, times the number of workers employed, Q_s.