AP Photo/Boston Herald, Mark Garfinkel
Protesters outside a Burger King in Boston, August 29, 2013, demand fast-food chains pay workers more.

Fast Food Workers' Low Wages Offset by $7 Billion in Public Assistance Annually


To compensate fast-food workers for the low wages they earn—a median salary of $8.69 an hour—the federal government collectively provides many families of fast-food workers an average of $7 billion a year in public assistance, according to a pair of national reports released yesterday, reported Bloomberg BusinessWeek. The reports sourced publicly available data from 2007 to 2011.

Roughly 68 percent of fast-food workers are single or married adults, not in school, and 26 percent have children. And 87 percent of them don’t receive health-care benefits. As a result, an estimated 52 percent of families in fast-food jobs are enrolled in some type of public assistance, typically Medicaid and the Children’s Health Insurance Program.

Both reports were funded by Fast Food Forward, a group that organized fast-food restaurant labor strikes in the summer to demand higher wages.

“The combination of low wages, meager benefits and often part-time hours means that many of the families of fast-food workers have to rely on taxpayer-funded safety net programs to make ends meet,” said Ken Jacobs, chair of the Center for Labor Research in Berkeley and co-author of the report “Fast Food, Poverty Wages.” “We found that having to rely on public assistance was the rule rather than the exception for families of workers in fast-food jobs. This is true even for those working 40 hours or more a week.”

According to calculations by Bloomberg BusinessWeek's Venessa Wong, higher wages could be offset by higher prices. Her calculations are very specific, but in a nutshell, McDonald's fast-food wages could be doubled at no expense to the company if the price of a Big Mac was increased by $1.

The fast food industry is not the only one to blame. A recent report by the Democratic staff of the U.S. House Committee on Education and the Workforce points a finger directly at Wal-Mart with the condemning title “The Low-Wage Drag on Our Economy: Wal-Mart’s low wages and their effect on taxpayers and economic growth”. The Committee states that the franchise's low wages are costing taxpayers $5,815 per employee.

“While employers like Wal-Mart seek to reap significant profits through the depression of labor costs, the social costs of this low-wage strategy are externalized. Low wages not only harm workers and their families—they cost taxpayers,” the report states.

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Anonymous's picture
Submitted by Anonymous on
There is more to this story, the fast food companies, retail and many others have cut our hours to the bone so when we do work we are doing the work of 3 people, everyone is incredibly over stressed. The companies get tax breaks and subsidies, they continue to brag about their profits on their websites, and in our employee break room. The lawmakers don't hold the companies accountable at all and will use these statistics to justify cutting "entitlements" while they pocket donations from these companies. Right now the best advice I can give is to shop local as much as you can, try to keep small business alive, and boycott as much as possible the companies that treat people and the environment badly. It is our best defense.