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 businesses that serve Americans untold quantities of unhealthy food linked to diabetes, 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 companion report (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.
Photo via Wikimedia Commons