These People Cost Taxpayers $7 Billion Annually?
NEW YORK ( MainStreet) Everyone in fast food works there for the money. It's odd in an industry well known for paying at or close to minimum wage, but, like many jobs, nobody warms French fries for a living because of love for the work.
It's all about paying the bills.
This makes recent findings from a joint study by Berkeley and the University of Illinois even more disheartening. The study, titled "Fast Food, Poverty Wages," researched how much money the federal government spends subsidizing low wages for industry workers.
Among many results, three stand out:
- The cost of public assistance to workers in the fast food industry and their families comes to nearly $7 billion per year.
- More than half the families of front-line fast food workers (those not in a manager or supervisor position) receive some form of public assistance, compared to approximately 25% of the workforce as a whole.
- Even among the families of workers employed full time, more than half depend on some form of public assistance to make ends meet.
To labor analysts, the results don't come as a surprise.
"We've long known that fast food jobs pay so low that many of the families of fast food workers need to rely on some form of public assistance," said Ken Jacobs, Chair of the Berkeley Labor Center and one of the authors of the report. "What the objective of this report was to do was to quantify that."
The fast food industry is by no means unique in having workers enroll in public assistance programs. In fact, 73% of participants in benefits programs come from working families. What makes this industry different is the extent of poverty. Workers in the fast food industry and their families are twice as likely to need public assistance as workers in general.
"McDonalds and these companies are highly profitable," said Sylvia Allegretto, a Berkeley researcher and another author of the study. "These workers are simply not enjoying any of these benefits. They were asked to sacrifice through the great recession and now that things are getting better, albeit slowly, they're seeing their wages go nowhere. And this is just a piece of a larger problem."
The paper studied workers' reliance on four different government programs: federal health assistance such as Medicaid and the Children's Health Insurance Program, food stamps, Temporary Assistance for Needy Families and the earned income tax credit. In all four programs fast food workers need government assistance to help pay for essentials such as food, rent and health care.
The result is that government programs end up paying out billions of dollars to people who the fast food industry employs but doesn't don't pay enough for full time work to cover costs of living.