News / Economy

Study: Taxpayers Foot Bill for Low-Wage, Fast-Food Jobs

A coalition of groups rally in front of a McDonald's on East 125th Street and Lexington Avenue in Harlem during a protest by fast food workers and supporters for higher wages in New York,  Apr. 4, 2013.
A coalition of groups rally in front of a McDonald's on East 125th Street and Lexington Avenue in Harlem during a protest by fast food workers and supporters for higher wages in New York, Apr. 4, 2013.
That burger you picked up at the fast-food restaurant may be cheap, but that low price could come at a high cost to taxpayers.

More than half of the fast-food workers in the United States receive some kind of public assistance at a cost of nearly $7 billion annually to taxpayers, according to a report by the University of California at Berkeley’s Center for Labor Research and Education.

“The taxpayer costs we discovered were staggering,” said Ken Jacobs, chair of UC Berkeley’s Center for Labor Research and Education and coauthor of the report. “People who work in fast-food jobs are paid so little that having to rely on public assistance is the rule, rather than the exception, even for those working 40 hours or more a week.”

Earlier this year, fast-food workers in 60 cities went on strike calling for higher pay so they could survive without having to rely on public assistance.

The report said fast food is a $200 billion-a-year industry, but the median wage for core front-line workers at fast-food restaurants nationally is $8.69 an hour. Only 13 percent of the jobs provide health benefits, according to the report.

The low wages and lack of health benefits contributed to an increased reliance on programs such as Medicaid, the Children’s Health Insurance Program and food stamps, the report said. Adding to the cost is nearly $2 billion of earned income tax credits for fast-food workers. The earned income tax credit is a refundable tax credit predominantly for low to medium income families with children.

The report added that fast-food workers enrolled in public assistance at more than twice the rate of the overall workforce.

“This is the public cost of low-wage jobs in America,” said UC Berkeley economist Sylvia Allegretto, co-chair of the Center for Wage and Employment Dynamics. “The cost is public because taxpayers bear it. Yet it remains hidden in national policy debates about poverty, employment and public spending.”

Scott DeFife, Executive Vice President of Policy and Government Affairs for the National Restaurant Association, the largest lobby group in the food services industry, called the report “misleading.”

“The majority of lower-wage employees works part-time to supplement a family income. Moreover, 40 percent of line staff workers in restaurants, the primary focus of the reports, are students,” he said. “The inclusion of the Earned Income Tax Credit shows just how misleading these efforts are, as it is a tax credit specifically designed for working families, not public assistance, and is used to inflate their numbers.”

But Marc Doussard, one of the Berkeley report’s coauthors and an assistant professor of urban and regional planning at the University of Illinois at Urbana-Champaign, said the report helps dispel the myth of fast-food workers as largely untrained teenagers.

“More than two-thirds of core frontline fast-food workers across the country are over the age of 20, and 68 percent are the main wage earners in their families,” Doussard said. “And more than a quarter of Americans working in fast-food restaurants are parents, raising at least one child.”

DeFife said fast-food jobs can serve as stepping stones to higher paying jobs.

“America’s restaurant industry provides opportunities for millions of Americans, women and men from all backgrounds, to move up the ladder and succeed. In addition to providing more than 13 million job opportunities, the restaurant industry is one of the best paths to achieving the American dream, with 80 percent of restaurant owners having started their careers in entry-level positions. In fact, nine out of 10 salaried employees started as hourly workers.”

The Berkeley report was funded by Fast Food Forward, a coalition of workers and labor, religious and community groups campaigning for higher wages and rights on the job for New York City fast-food workers.

You May Like

Multimedia Obama, Modi Break Nuclear Deal Deadlock

Impasse over liability issues had been stalling bilateral civilian nuclear cooperation; deal reached at start of US president's three-day visit to India More

WHO's Late Efforts in Tackling Ebola Highlight Need for Reform

Health experts debate measures to reform agency’s response to global public health emergencies in special one-day session on deadly outbreak More

One Tumultuous Year in Power for CAR's President

As sectarian violence raged across Central African Republic, interim President Catherine Samba-Panza has Herculean task: to end civil war and put country back on right track More

This forum has been closed.
Comment Sorting
Comments
     
by: Greg Howard
October 20, 2013 2:16 AM
how is this subsidizing big business? it's subsidizing workers who would otherwise be without work costing us more taxpayer money. Less than 3pct of the entire workforce in America is minimum wage, it's a starter wage, certainly not a wage to supply a family on.


by: carin from: usa
October 17, 2013 9:41 PM
Yes even working 40 hours or more a week one cannot live on it.
Why are you subsidizing big business? Mc Donalds is raking in the profits, they should pay their people better .

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Worldwide Photo Workshops Empower Youthi
X
Julie Taboh
January 23, 2015 11:08 PM
Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.
Video

Video US Marching Bands Grow Into a Show of Their Own

The 2014 Super Bowl halftime show was the most-watched in history - attracting an estimated 115 million viewers. That event featured pop star Bruno Mars. But the halftime show tradition started with marching bands, which still dominate the entertainment at U.S. high school and college American football games. But as Enming Liu reports in this story narrated by Adrianna Zhang, marching bands have grown into a show of their own.
Video

Video Secular, Religious Kurds Face Off in Southeast Turkey

Turkey’s predominantly Kurdish southeast has been rocked by violence between religious and secular Kurds. Dorian Jones reports on the reasons behind the stand-off from the region's main city of Diyarbakir, which suffered the bloodiest fighting.
Video

Video Kenya: Misuse of Antibiotics Leading to Resistance by Immune System

In Kenya, the rise of drug resistant bacteria could reverse the gains made by medical science over diseases that were once treatable. Kenyans could be at risk of fatalities as a result if the power in antibiotics is not preserved. Lenny Ruvaga has more on the story from Nairobi.
Video

Video Solar-Powered Plane Getting Ready to Circumnavigate Globe

Pilots of the solar plane that already set records flying without a drop of fuel are close to making their first attempt to fly the craft around the globe. They plan to do it in 25 flying days over a five month period. VOA’s George Putic reports.
Video

Video How Experts Decide Ethiopia Has the Best Coffee

Ethiopia’s coffee has been ranked as the best in the world by an international group of coffee connoisseurs. Not surprisingly, coffee is a top export for the country. But at home it is a source of pride. Marthe van der Wolf in Addis Ababa decided to find out what makes the bean and brew so special and how experts make their determinations.
Video

Video Yazidi Refugees at Center of Political Fight Between Turkey, Kurds

The treatment of thousands of Yazidis refugees who fled to Turkey to escape attacks by Islamic State militants has become the center of a dispute between the Turkish government and the country's pro-Kurdish movement. VOA's Dorian Jones reports.
Video

Video World’s Richest 1% Forecast to Own More Than Half of Global Wealth

The combined wealth of the world's richest 1 percent will overtake that of the remaining 99 percent at some point in 2016, according to the anti-poverty charity Oxfam. Campaigners are demanding that policymakers take action to address the widening gap between the ‘haves’ and the ‘have nots’, as Henry Ridgwell reports for VOA from London.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8930
JPY
USD
117.98
GBP
USD
0.6673
CAD
USD
1.2445
INR
USD
61.498

Rates may not be current.