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.