It should be noted that, in the United States, eligibility for food, medical and housing benefits does not depend on employment status; with some exceptions (e.g. for able-bodied adults aged 18-50 without dependents) people can receive benefits whether they work or not. If there were no welfare benefits, Walmart would pay some average salary. When welfare benefits are introduced, #1 says that Walmart will start paying lower salaries. This suggests that if additional benefits are added, perhaps basic income or more generous assistance, salaries will go down even more. If we extend this thought experiment, at some point welfare benefits will pay for all of a person's needs, and they will continue working at Walmart for free! This doesn't make sense.1 is clearly true
If #1 were not obviously true to someone, what evidence would you show to convince them? It's clear that Walmart pays low wages, compared to some other sectors, but #1 states that Walmart pays less than they would if welfare benefits did not exist. We can't easily experiment to measure the effect, but we can try to understand how the process works.