Fast-Food Companies Pay the Minimum, So We Pay Their Workers $7B a Year
BOSTON ( MainStreet) In September, workers from fast food chains in more than 60 cities across the nation went on strike to push for a wage increase to $15 an hour.
Many of those opposing the move have warned that such a wage increase could cost consumers, who would wind up being hit with a price bump on their burger. But it turns out Americans are already paying a high price to cover for the flat wages of fast food workers.
At least, that is the conclusion that can be drawn from two reports showing workers in the fast food industry rely heavily on public assistance to make ends meet at more than twice the rate of the overall workforce.
More than half (52%) of the families of frontline fast food employees are enrolled in one or more public assistance programs such as Medicaid, food stamps and Temporary Assistance for Needy Families, costing taxpayers up to $7 billion dollars a year, according to the report issued by the University of California at Berkeley's Labor Center .
Of those fast food workers enrolled in public assistance, nearly half are full-time. The states paying out the most in public assistance are California and New York, where $717 million and $708 million are spent each year, respectively.
"The paper is indicative of larger issues in the economy," said UC-Berkeley economist Sylvia Allegretto, co-chairwoman of the Center for Wage and Employment Dynamics and co-author of the report. "Corporate profits are highest on record, and workers' salaries are at a 50-year low."
The report also found that despite the traditional perception of the typical fast food worker as a teenager, two-thirds of them are in fact adults over the age of 20 and only a quarter of them minors. Additionally, the report revealed that 68% of these adult workers are the breadwinners for their household, yet a staggering 87% of them get no health benefits from their employer. This might explain why the largest expenditure in public assistance spent on fast food workers by far is Medicaid and the Children's Health Insurance Program, which accounts for $3.9 billion annually.
The second report, released by the National Employment Law Project , zeroes in on the costs of public assistance as associated to specific fast food chains.
NELP reports that nearly half, or $3.8 billion, of the $7 billion annual price tag of public assistance for fast food workers is spent on employees at 10 of the largest fast food companies in the country, including McDonald's , Burger King , Wendy's and Yum! Brands (which owns Taco Bell, Pizza Hut and KFC).
Fast food workers from McDonald's accounted for the highest share of public assistance funds, at $1.2 billion a year. At the same time, a NELP analysis of data from the financial firm Standard & Poor's found that the 10 companies they outlined in their report made $7.4 billion in profits last year.