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Low fast-food wages supplemented by billions in govt welfare - report

Published time: October 16, 2013 03:28
Reuters / Vincent Kessler

Reuters / Vincent Kessler

Over half of US workers employed by fast food restaurants rely on public assistance because their meager paychecks do not cover basic needs. The aid costs American taxpayers billions of dollars each year, according to a new report.

The average American fast food worker earns $8.69 an hour and regularly works less than 40 hours a week, qualifying them for a variety of government benefits. Fifty-two percent of families that include a fast food worker receive food stamps, Medicaid, or are eligible for the Earned Income Tax Credit and Temporary Assistance for Needy Families. Compare that sum with the 25 percent of families eligible for those assistance programs from the overall workforce.

Researchers determined that “non-managerial” employees – such as cashiers, cooks, servers, and others – are twice as likely to need financial help. They deemed it “staggering” how government assistance programs effectively pay costs that major food chains refuse to.

Most fast food workers (68 percent) are single or married adults not currently attending school and 26 percent are raising children - debunking the stereotype that teenagers fill most of said positions.

The numbers were assembled in a report written by economists from the University of California at Berkley and the University of Illinois at Urbana-Champaign. Published Tuesday, the report is affiliated with an organization that has lobbied for the Service Employees International Union’s (SEIU) involvement in the fast food industry and comes after workers throughout the US have called for higher wages and safer working conditions.

Only 13 percent of workers receive health benefits from their employers, compared to 59 percent of workers elsewhere. An individual working at McDonalds or Burger King, for example, also works an average of ten hours less than his or her full-time counterpart working for a non-fast food company.

The study examined the years between 2007 and 2011, determining that taxpayers subsidized the industry by an average rate of $7 billion each year.

Conservative groups mobilized against the report before its Tuesday publication, claiming the authors exaggerated their findings for the sake of making a political statement.

In its quest to unionize the fast food industry, the SEIU has demonstrated that it will leave no stone unturned – including using ‘research’ and arguments that would get a higher grade in creative writing than in a high schools economics class,” Michael Saltsman, research director at the conservative Employment Policies Institute think tank, said in a statement to the Los Angeles Times.

The National Restaurant Association, a trade group including some of the most powerful restaurant chains, released a similar statement that deemed the report misleading.

America’s restaurant industry provides opportunities for millions of Americans, women and men from all backgrounds, to move up the ladder and succeed,” said Scott Defife, the association’s executive vice president for policy and government affairs.

Another report published this month, this one by the National Employment Law Project, determined that approximately $3.8 billion is spent on workers employed by the 10 largest fast food companies in the US. McDonalds, the report noted, accounts for $1.2 billion of that sum.

Experts have said that the estimated annual figures are likely low because they do not account for school lunch programs, home heating assistance, subsidized housing, or any state programs.

Jack Temple, public policy analyst at NELP, told the Guardian that the current methods allow major corporations to simply eliminate much of their expense if they are willing to act without conscience.

It doesn’t matter whether you work or shop at McDonalds or not,” he said. “Companies…are basically pushing off part of their costs on the taxpayers.”


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