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Whether or Not You Like It, You’re Helping McDonald’s Succeed

Whether or Not You Like It, You’re Helping McDonald’s Succeed

Low fast-food wages come at a very high cost to U.S. taxpayers, a new report from University of California, Berkeley and University of Illinois researchers (pdf) has found. 52 percent of fast food workers are paid so little that they have no choice but to turn to some kind of government assistance.

That is, U.S. taxpayers, whether they eat at McDonald’s, Subway, etc. or not, are subsidizing the very fast food restaurants that offer jobs which are so low-paying that, as one worker recently said to CEO Jeff Stratton, she could not afford to pay for shoes or food for her two children after working for the company for ten years. Whether they eat at fast-food restaurants are not, taxpayers are also supporting businessesthat serve Americans untold quantities of unhealthy food linked todiabetes, obesity and other health problems.

Most fast food workers are in “non-managerial” positions (cooks, servers and cashiers) and do not receive any benefits. The report says that they are twice as likely as other workers to have to seek out public assistance.Between 2007 and 2011, a total of $7 billion of taxpayers’ money was spent on their behalf.

Researchers arrived at that figure by looking at four types of public assistance: food stamps,healthcare,the Earned Income Tax Credit and Temporary Assistance for Needy Families (aka “welfare“). They did not take into account a number of other forms of public assistance (subsidized housing, school lunches, home heating assistance or state-provided programs) so the amount of public funds that fast food workers need could actually be far higher.

Overall, it is “the rule rather than the exception” for fast food workers paid the overall median wage of $8.69 an hour to be in need of public assistance, says Ken Jacobs, the chairman of the U.C. Berkeley Labor Center and one of the authors of the report. Only a meager 13 percent of fast food workers receive benefits such as health insurance.

A companionreport (pdf) from the National Employment Law Project estimates that, due to low wages and non-existent benefits, the ten largest fast food companies cost U.S. taxpayers $3.8 billion a year, with McDonalds accounting for almost a third of that ($1.2 billion). As Jack Temple, a public policy analyst at NELP, explains,

“It doesn’t matter whether you work or shop at McDonald’s or not, the low-wage business model is expensive for everybody, Companies are basically pushing off part of their costs on the taxpayers.”

The National Restaurant Association, a trade organization and fast food companies have been quick to get on the defensive. Fast food restaurants offer “millions of Americans, women and men from all backgrounds” the chance to “move up the ladder and succeed,” the National Restaurant Association claims. A spokesman for McDonalds sidesteps the issues of highlighted in the two reports with assertions that

“…our history is full of examples of individuals who worked their first job with McDonald’s and went on to successful careers both within and outside of McDonald’s” and that “as with most small businesses, wages are based on local wage laws and are competitive to similar jobs in that market.”

McDonald’s being a global company that counts its profits in the billions (and the world’s largest hamburger chain), it seems a bit disingenuous for its spokesman to refer to McDonald’s restaurants as “small businesses.” Many McDonald’s outlets are franchises run by individuals; as has been noted, franchise owners struggle to make a profit as they are only supposed to purchase supplies from McDonald’s and must also follow other rules set down by corporate headquarters.

The two reports are added proof that fast food workers (who went on strike in 50 cities this past summer) must be paid a just wage and be eligible for benefits. If you haven’t already, sign this petition to make it clear to fast food companies that U.S. taxpayers are fed up with footing the bill for them.

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Photo via Wikimedia Commons

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6:15PM PST on Dec 3, 2013

what a mess our economy is in. the rich get richer and the rest don't count at all

6:39AM PDT on Oct 24, 2013

People just can't quit it

12:53PM PDT on Oct 23, 2013

unsustainable, I suppose.

9:33AM PDT on Oct 23, 2013

I seriously hope they do to. I still can not understand how their food can taste as terrible as it does, and they still get lots of customers. I find that baffling.

9:26AM PDT on Oct 23, 2013

I hope McDonald's collapses, but it with all the customers it has.. unlikely to happen :(

6:45PM PDT on Oct 21, 2013

I like McDonald's a lot for other things they do, but they need to rethink their wage scales. They have improved so much in environmental performance and charitable works, but still have some catching up to do on that end.

5:53PM PDT on Oct 21, 2013

Everyone should be paid a living wage for his or her work. Thanks.

8:26AM PDT on Oct 21, 2013

I don't know who those researchers are but the Earned Income Tax Credit is NOT public assistance. It's considered an anti-poverty work-incentive program because it is a tax credit available ONLY to those who are employed (self-employed included but to claim that tax credit, they need to show a profit). It's also based on a bell curve. The lower your wages, the lower the credit. As your wage increases, the credit increases (therefore, the work-incentive). Then, at a certain point, it peaks and as the wages continue to increase, the credit will DECREASE until it phases out. Because it provides people with an incentive to keep working, the Earned Income Tax Credit also reduces the burden on public assistance and unemployment funds.

3:36AM PDT on Oct 21, 2013

tie wages to the actual cost of living each year, and require a living wage be paid.

9:51PM PDT on Oct 20, 2013

I've griped about this form of welfare for the rich for a long time but there's really nothing I can do about this. I consider McDonald's garbage the ultimate in fast food that cuts out the middle man: Just buy it and flush it down the toilet without eating it first. After all, that's some awful excuse for food to begin with. When I ate a McDonald's hamburger, I ate two in one: the first one and the last one in the same hamburger, and that was many many years ago.

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