More than half of U.S. fast food workers on public aid, report says (Participation)

More than half of U.S. fast food workers on public aid, report says

Fast food protestProtesters demonstrate outside a fast-food restaurant in Los Angeles. Thousands of fast-food workers and their supporters have been staging protests across the country to call attention to the struggles of living on or close to the federal minimum wage. The push raises the question of whether the economics of the fast-food industry allow room for a boost in pay for its workers. (Nick Ut / AP / August 29, 2013)
By Alana SemuelsOctober 15, 2013, 9:00 a.m.

More than half of families of fast food workers receive some sort of public assistance, costing the nation $7 billion a year, according to a new report distributed by a group that has been pushing for union representation and higher wages for fast food workers.

Fast food workers earn an average of $8.69 an hour, and often work fewer than 40 hours a week, qualifying them for food stamps, Medicaid and tax credits, according to the report, written by economists at UC Berkeley and the University of Illinois at Urbana-Champaign.

Even before it was released publicly, the report raised the ire of some conservative groups that said it used faulty methodology to prove a point.

“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 school economics class,” said Michael Saltsman, research director at conservative think tank Employment Policies Institute, in a statement.

The report calculates that about $3.9 billion a year is spent on Medicaid and children’s healthcare for fast food workers and their families. Families also receive $1.04 billion in food stamp benefits and $1.91 billion from the federal government through the earned income tax credit. Even those workers who are on a 40-hour-a-week schedule receive benefits; more than half of those families are enrolled in public assistance programs, the report says.

Workers in the restaurant and food services industry far surpass workers in other industries for dependence on public assistance. About 44% of workers in the restaurant and food services sector have a family member enrolled in a public assistance program, compared to 35% for agriculture, forestry and fisheries and 30% in the retail trade.

The report has implications for national policies as Congress debates a farm bill that would cut back on food stamps, and as Republicans look to winnow down costs by scaling back other public assistance programs.

Public assistance programs “could be more effective if supplemented by measures that improve workers’ wages and benefits,” the report concludes.

The Employment Policies Institute counters that raising the minimum wage would hurt fast food workers because restaurants would replace workers with automated alternatives. It also adds that while the earned income tax credit may be costing the government money, it has proven effective at reducing poverty.

A separate report, also out Tuesday, by the National Employment Law Project, calculates how much each restaurant’s employees are costing the federal government because they receive public assistance to supplement their wages.

McDonald’s, which has 707,850 employees, costs $1.2 billion; Yum! Brands, which includes Pizza Hut, Taco Bell and KFC, and employs 379,449, costs $648 million.

McDonald’s CEO Donald Thompson received $14 million in total compensation in 2010, the report points out.

Fast food workers have been holding one-day walkouts and strikes for more than a year to call attention to their wages. They want $15 an hour and union representation – the federal minimum wage is $7.25 an hour.  In their last day of protest, in August, workers in around 50 cities walked off the job.

Last month, California Gov. Jerry Brown signed legislation to raise California’s minimum wage to $10 an hour by 2016. Voters in the small town of Seatec, in Washington Ssate, will soon vote whether to raise the local minimum wage to $15 an hour.

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4 thoughts on “More than half of U.S. fast food workers on public aid, report says (Participation)

  1. This statistics are upsetting considering the amount of people who work within the fast food industry. The fast food industry is only continuing to grow, and clearly by these stats this is an issue that needs addressing. I have worked in the food industry for a few years now, and the pay sucks and so do the hours, but I have a lot of support financially from my parents so this does not affect me nearly as much as it does these families. I think the industry needs to address these issues or the government needs to step in and assists because these numbers don’t make sense.

  2. The numbers really do not lie in this article. Considering the fact that the McDonalds CEO made $14 million last year, I would probably be a little greedy too. But what sickens me about the fact that there is no unionized work in fast foods is not just that man’s salary but there is also the billions on advertisements, properties and also promotions. I understand if wages were raised it may force the companies to do things that would reverse the progress of unions, but why can’t the big companies and the government work together to create a solution? Have tax benefits for companies who hire certain amount and are union friendly. Of course this is not as easy as it seems but I fell like there can be some steps made in this frame work to improve the industry as a whole.

  3. It’s promising to read that California Governor Jerry Brown signed legislation to raise California’s minimum wage to $10 an hour by 2016, and that voters in Seatac, Washington will soon vote whether to raise local minimum wage to $15 an hour. It shows that the government has realized how big of an issue it is to have more than half of United States fast food workers on public aid. Hopefully the raise in California and Washington’s minimum wage will encourage other states to do the same to reduce the amount of people depending on public aid. It’s disappointing that the CEO of McDonald’s received $14 million in compensation in 2010. It shows that he isn’t doing anything to improve wages for his employees and only cares about profit for himself and the company, not for the employees. If fast food companies could figure out a way to improve wages for their workers then less people would be on public aid, therefore American citizens wouldn’t have to pay as much to support funds for public aid.

  4. The idea that so many people who work in the food industry have to rely on medicaid, food stamps, and tax credits should be an indicator that their wage rate should be raised. It’s hard enough to live on your own, but having to provide for a whole family of people with that low of pay is unimaginable. The fact that Seatac is voting on whether to raise the local minimum wage to 15.00 an hour is a step in the right direction. Personally, I believe that the wealthy fast food corporations should provide more benefits for their workers and each restaurant should individually higher their wages. Having experience working in the retail I earned a base pay of minimum wage, but also earned commission. I would never be able to live off of minimum wage if I was required to because without the added commission I would barely be able to pay rent in Seattle. Being able to improve wages for fast food workers would make a huge difference in their lives and also in the kitchen where the food is being prepared.

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