Study Finds Low Fast Food Wages Cost Taxpayers $7 Billion

October 16, 2013  |  

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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