Study Finds Low Fast Food Wages Cost Taxpayers $7 Billion

October 16, 2013  |  

Spencer Platt
Getty Images News

Fast food corporations reap billions of dollars annually, yet they refuse to yield to the wage hike protests. This leaves American taxpayers to shell out $7 million to supplement the lives of low wage workers, The Washington Post reports.

More than half of fast food workers (52 percent) must rely on federal assistance programs, according to a report by the UC Berkeley Labor Center. The study details how American tax dollars are allocated to support low-wage employees: “Together, [low-wage workers] collect nearly $1.9 billion through the earned income tax credit, $1 billion in food stamps and $3.9 billion through Medicaid and the Children’s Health Insurance Program.”

The median salary of fast-food workers is $8.69 per hour, UC Berkeley researchers say, while the nation’s top seven fast-food corporations offer $53 million in salaries for high-ranking executives, according to the National Employment Law Project (NELP). “These statistics paint a picture of workers not being able to get their fair share of the largest, richest economy in the world. It is a good thing that we have these work supports, but they should be a last resort,” said Sylvia A. Allegretto, lead author of the Berkeley report.

The NELP report slams 10 fast food corporations for being “responsible for more than half the total cost to taxpayers”: McDonald’s, Yum! Brands (home to KFC, Taco Bell, and other chains), Subway, Burger King, Wendy’s, Dunkin’ Donuts, Dairy Queen, Little Caesar’s, Sonic and Domino’s. McDonalds, NELP adds, imposes the largest bill on Americans — $1.2 billion out of the total $3.8 billion.

Researchers at the Employment Policies Institute (EPI) rebuked both of the aforementioned studies saying that higher wages will not combat poverty. Enforcing such demands on employers, according to the EPI, is counterproductive. “Policies like the Earned Income Tax Credit help support less-skilled employees through the tax code, instead of through an unrealistic mandate on employers that would put these same employees’ jobs at risk and have them totally dependent on government,”Michael Saltsman, a research director, said in a press statement.

While protests for a $15 minimum wage took the nation by storm, US News & World Report noted that such a wage hike is improbable. Big businesses will need to hike their prices on food to keep current profit margins. Most importantly, large corporations play the government like a marionette: they have threatened to cut jobs and other projects in response to a higher minimum wage. Still, it’s hard to ignore the fact that hard-working fast food employees like Nancy Salgado say they can’t afford the basics for their families.


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  • J Mc

    all of this greed is going to come to a head eventually. People are getting fed up of being taken advantage of, walked over, and put down by people who couldn’t even last a day in the shoes of the people they are trying to hold down. The day is coming just wait…..

    • plaingolf

      Maybe stop being lazy and blaming your problems on others. How about getting an education and working hard to find a better paying job?

  • miss jay

    This is one of the reasons I don’t get the Gov shut down. Most of the rich people ( the one percenters) in America have gotten rich directly off of their fellow Americans. Lets be honest most of these one percenters are loyal to the republican party. Why is it so hard for them to give more to the hard working class who MADE them who they are today. Mcdonalds and their 1$ deals would not be a billion dollar corporation if everyone could afford rib eyes and caviar all the time. Walmart would not be the way it was if the 99% of people could shop at macys and saks. These rich people invent charities out of thin air just so they don’t have to pay their fair share in taxes, hide money in off shore accounts. America is a disgrace. The GREED is a disgrace.