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McDonald's Low Wages Cost Taxpayers $1.2 Billion Per Year

Business  (tags: abuse, americans, business, consumers, corporate, corruption, cover-up, dishonesty, economy, ethics, finance, government, humans, labor, law, lies, McDonald's, money, politics, society, Wages, wal-mart )

- 1705 days ago -
Taxpayers are shelling out $1.2 billion a year to help pay workers at McDonald's, according to an estimate from the National Employment Law Project published Tuesday.

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Kit B (276)
Friday October 18, 2013, 12:55 pm
Photo Credit: Screen Shot from Huffington Post

The fast food industry’s low wages are costing us all, new research finds.

Taxpayers are shelling out $1.2 billion a year to help pay workers at McDonald’s, according to an estimate from the National Employment Law Project published Tuesday. The organization used estimated figures from a study by University of California-Berkeley and University of Illinois at Urbana-Champaign on how many fast food workers rely on public assistance programs like food stamps and Medicaid for its analysis.

Overall, low wages at the top 10 largest fast food chains cost taxpayers about $3.8 billion per year, NELP found.

As Republicans in Congress fight to curb spending on entitlement programs like food stamps, the report offers an often overlooked solution: Companies could pay workers more to decrease their reliance on public assistance.

"A very easy policy fix here would to raise the minimum wage," said Sylvia Allegretto, the co-chair of Berkeley’s Center on Wage and Employment Dynamics and one of the authors of the Berkeley/UI study. "The firms that pay a large share of their workers at or near the minimum wage -- these workers disproportionately have to rely on public subsidies."

The National Restaurant Association, a trade group representing more than 500,000 restaurants, took issue with the reports. It argued that the Berkeley and UI researchers' decision to consider the Earned Income Tax Credit, a tax break given to working, low-income families, as a subsidy "inflates" the study's findings.

McDonald's wrote in a statement that the company and its franchisees provide hundreds of thousands of jobs throughout the country that offer opportunities for advancement.

"As with most small businesses, wages are based on local wage laws and are competitive to similar jobs in that market," the statement reads.

***See Chart at VISIT SITE****

To make its estimate, NELP used publicly available data about the fast food industry, like how many front-line workers each restaurant employs, along with the University of California-Berkeley/UI study.

The Berkeley/UI study found that 52 percent of families of front-line fast food workers -- defined as non-managers working more than 11 hours a week and over 27 weeks per year -- rely on at least one government assistance program. The researchers used enrollment data from government programs like Medicaid and the Supplemental Nutrition Assistance Program (or food stamps), and cross-referenced that information with worker demographic data from the Bureau of Labor Statistics.

Pelhom Wiley is one of those workers. He’s been mopping floors, taking out the garbage and changing the grease in the frier pans for about a year as a maintenance worker at a Chicago McDonald’s. Wiley says his paycheck of $8.25 an hour at just under 40 hours per week isn’t enough for him to cover his about $600 per month in expenses like rent and transportation.

So Wiley uses Illinois’ foods stamp program to fill in the gaps. He often comes up short.

“We get paid Mondays, and by Wednesday or Thursday my check is pretty much gone,” he said. “It’s not fair. I’m the one that has to keep up the store. All of the big restaurants make billions of dollars, and we make the least of what all the stores get.”

Representatives from the restaurant industry have said in the past that fast food eateries operate on thin profit margins. They've argued that any wage boost could put franchisees -- which run most fast food restaurants -- out of business, or hamper their ability to hire.

Industry representatives have also said that entry-level fast food jobs are meant to be just that -- and therefore workers will only be earning bottom-barrel wages for a short period of their careers.

But the new economic reality counters that claim. Nearly 70 percent of the jobs created in the recovery have been in low-wage sectors like fast food and retail, while half the jobs lost during the recession paid between $38,000 and $68,000 per year.

That means that in many cases, it’s not just teenagers working fast food jobs for some extra cash. These low-wage workers are often older -- and in many cases are the breadwinners for their families.

“It’s not just that we need more jobs,” said Allegretto. “We need the jobs that we have and the jobs that are growing to be better-paying jobs and better-quality jobs.”

***Graph at VISIT SITE ***

By: Jillian Berman | Huffington Post |

The is a very funny slide show at the end of this article about the most Evil Fictional Corporations.

Wolfram and Hart are listed with an absolutely drop dead gorgeous picture of Angel. *sigh*
(...if you do not understand the above reference, guess you never had a teen age daughter)


JL A (281)
Friday October 18, 2013, 2:56 pm
WallMart does as well which is why CA has proposed legislation to make those employers foot the bill out of their profits instead of sticking it to the taxpayer

Syd H (48)
Friday October 18, 2013, 3:29 pm

Yeah, and this is just part of it. Taxpayers also subsidize all that corn and soy which is the backbone of the menu at most fast food places, not just for HFCS for the sodas and milkshakes (anything sweet) but amazing amounts for the feed of the animal products. And worse, taxpayers also subsidize all that GMO feed that goes to fatten animals in the EU to be served in the McDonald's and KFC and Pizza Hut and Subway outlets there.

So American taxpayers are the welfare for these Corporate whores. :(

And so we are subsidizing those on Wall Street who can afford to own all those stocks.

Something is messed up! Those who work cannot make enough while those who take cannot get enough. :(


Janice P (5)
Friday October 18, 2013, 3:56 pm

Rose Becke (141)
Friday October 18, 2013, 4:31 pm
Bloody sickening

Bryna Pizzo (139)
Friday October 18, 2013, 6:54 pm
This makes me furious. We are all sharing the same table with corporations and the table is tipped toward them. We are starving and they are gobbling up the everything. We don't get breaks and far to many corporations get tax rebates while we pay far more than our share. This must stop! We need petitions, and we need to change the campaign laws.

Katie & Bill D (107)
Friday October 18, 2013, 9:01 pm
I agree these companies rely on the public to keep them in business. They double down on the public. We pay for the AID of the worker's and the company is allowed to do the same for hiring them. They need to pay for their own business. This is Burger King, KFC, Dunkin Donuts. especially Walmart and I am sure you can think of many many more. They all bleed the taxpayer we keep them in business!! Let's change it now! they should take care of the worker's.
Thank you Kit

Judy C (97)
Saturday October 19, 2013, 1:24 am
We need laws like J.L. mentions, to make these corporations act responsibly. Their ridiculous profits are really partly stolen from the taxpayers. The hidden cost of that seemingly cheap meal makes it very expensive, indeed. It's even worse when you consider the factors Syd mentions.The health consequences of eating those foods adds even more to our cost. Thanks, Kit.

TomCat S (128)
Saturday October 19, 2013, 1:28 am
Just another form ow welfare for the rich.

pam w (139)
Saturday October 19, 2013, 8:20 am

You should learn!

Robert B (60)
Saturday October 19, 2013, 8:26 am
Let me translate the following into understandable English: "As with most small businesses, wages are based on local wage laws and are competitive to similar jobs in that market," the statement by McDonalds Corp reads.
TRANSLATION: McDonalds, a HUGE corporation making Billions, would like to make you believe they are a "small" business. That way they can rationalize getting away with paying as little as they can get away with, since they only value paying customers and see their employees as not worthy of a decent standard of living.

Jody B (6)
Saturday October 19, 2013, 8:30 am
I swear, this kind of stuff is just maddening!

Robert B (60)
Saturday October 19, 2013, 8:33 am
What big business doesn't get is the idea that if employees are paid well, the Economy stays robust and big business is assured continuing profitability.

Kit B (276)
Saturday October 19, 2013, 8:40 am

Yep, Robert that is exactly what they are saying. Meanwhile the right wing in Congress wants to end any form of minimum wage. We know why, and I find it very insulting that they assume that by telling us it's for our own good, that ending minimum wage will add more jobs, belies a real contempt for the intelligence of the American citizen. The strongest and most productive America is the one that had minimum wage in line with current costs, that had unions speaking as one voice for the workers, that had taxation that supported the government, not under cut the government.

Kit B (276)
Saturday October 19, 2013, 8:43 am

A corporatocracy run by the oligarchy is what we are watching and the people gain nothing from this. We lose, and history books are full of this as it creeps in society degrades and soon the "empire" collapses. Do we really need to go through this again?

Gene J (290)
Saturday October 19, 2013, 10:04 am
Okay, 3.8 Billion for the entire fast food industry, so I wondered what does WalMart cost us. Googled that question and found this:
"Walmart's wages and benefits are so low that many of its employees are forced to turn to the government for aid, costing taxpayers between $900,000 and $1.75 million per store, according to a report released last week by congressional Democrats." WalMart's Cost to Taxpayers Great article, with lots of detail as to how they arrive at that figure. They have 11,005 stores world wide including Sam's Club and 4118 stores in the US with 622 Sam's Club stores. Corporate Welfare indeed. They could bankrupt the country all by themselves. I'd like this to be part of the discussion next time the debt ceiling is in the news. Just how much of it is caused by fast food corporations, WalMart and other stores like it. Because, I'm thinking their failure to pay living wages and benefits dwarfs Social Security, SNAP, Medicare and traditional welfare programs. Wouldn't it be nice to have the REAL numbers out there in the media, in the discussions? I wonder to what lengths the republicans will go to prevent that? And I hope it costs them dearly for trying.

Syd H (48)
Saturday October 19, 2013, 10:16 am

The first thing we have to do personally is stop supporting these who only have their own best interests at heart which means making different eating choices (even if just one ingredient at a time -- that is how I started with just one lime).

Then we have to find ways to resist further. They are doing this to us in part because we let them:

Though one day is not enough, we should all be out for that one as a show of our true strength, to support and inspire each other against those who would enslave and hold us down.

Thanks Kit for the personal note. It came as I was composing it so very apropos :)

Sadly, around the world one of the busiest places I've seen in each city has been the Mcdonalds. :(

Nancy M (169)
Saturday October 19, 2013, 11:06 am
I don't understand why some people defend these corporations and CEOs. -

Pogle S (88)
Saturday October 19, 2013, 12:23 pm
I'm not surprised, it's just the same in the UK but the benefits are direct to the lowly paid worker who still has to pay tax at the regular rate. Basically it's dole money for corporations who then fiddle the books and pay very little tax themselves. Robbers in suits!

Birgit W (160)
Saturday October 19, 2013, 3:26 pm

Lois Jordan (63)
Saturday October 19, 2013, 3:33 pm
Noted w/thanks for posting, Kit. Hopefully, many will see this article. The message here needs to be spread far and wide for as long as it takes to begin some changes. I'm signing all the petitions & sending letters that come my way supporting fast food workers and raising the minimum wage. I also share these articles and ask others to share.
I'm past disgust that all these corporations get gov't subsidies and tax loopholes, while executives pad their wallets even more. They can afford to pay workers a living wage without any financial pain whatsoever. How much will ever be enough for them?!

Craig Pittman (52)
Saturday October 19, 2013, 5:05 pm
I just hope this information makes enough people angry that is hurts their precious bottom line.

Roger G (154)
Saturday October 19, 2013, 8:08 pm
noted, thanks

Sheila D (194)
Saturday October 19, 2013, 10:58 pm
Not jus Mickey D's...Burger King, KFC, Hardees, and all those other fast food places that don't want to pay a decent wage. So glad I don't eat at any of those places any more - hasn't been in budget for years now. I eat better too.

Lynn Squance (235)
Sunday October 20, 2013, 10:15 pm
A living wage with benefits. That is all anybody asks for. It should not be too much to ask. With wages at the current low levels and employees forced to seek assistance, perhaps what should happen is a "special tax" levied against McDonald's, Walfart etc etc which is calculated based on the difference between the average wage for hourly non management employees and a living wage. That money could then be put directly into the SNAP programme etc. One way or the other, companies should be paying a living wage and not soaking the taxpayer. This is another face of corporate welfare.


Mitchell D (87)
Saturday October 26, 2013, 3:04 pm
These jackasses, the CEO's and the like, would scream at the thought of people on welfare, if given the chance, I believe, but their corporations are, essentially, on welfare!
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