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

    Video As Refugees Perish, Greek Graveyards Fill

    Before burial at overflowing cemeteries, unidentified dead being swapped for DNA, in case some day relatives come to learn their fate

    Russian Opposition Leader Sues Putin for Conflict of Interest

    Alexei Navalny tells VOA in exclusive interview why transfer of $2 billion from country’s wealth fund to company with ties to President Putin’s son-in-law triggered lawsuit

    Clinton, Sanders Fight for African American Votes

    Some African American lawmakers lining up to support Clinton in face of perceived surge by Sanders in race for Democratic nomination in presidential campaign

    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.
    As Refugees Perish, Greek Graveyards Filli
    X
    Hamada Elsaram
    February 11, 2016 8:01 PM
    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video As Refugees Perish, Greek Graveyards Fill

    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video To Fight Zika, Scientists Target Mosquitoes

    Mosquitoes strike again. The Zika virus outbreak is just the latest headline-grabbing epidemic carried by these biting pests, but researchers are fighting back with new ways to control them. VOA's Steve Baragona takes a look.
    Video

    Video Mosul Refugees Talk About Life Under IS

    A top U.S. intelligence official told Congress this week that a planned Iraqi-led operation to re-take the city of Mosul from Islamic State militants is unlikely to take place this year. IS took over the city in June 2014, and for the past year and a half, Mosul residents have been held captive under its rule. VOA's Zana Omar talked to some families who managed to escape. Bronwyn Benito narrates his report.
    Video

    Video Scientists Make Progress Toward Better Diabetes Treatment, Cure

    Scientists at two of the top U.S. universities say they have made significant advances in their quest to find a more efficient treatment for diabetes and eventually a cure. According to the International Diabetes Federation, the disease affects more than 370 million people worldwide. VOA’s George Putic reports.
    Video

    Video NATO to Target Migrant Smugglers

    NATO has announced plans to send warships to the Aegean Sea to target migrant smugglers in the alliance's most direct intervention so far since a wave of people began trying to reach European shores.
    Video

    Video Russia's Catholics, Orthodox Hopeful on Historic Pope-Patriarch Meeting

    Russia's Catholic minority has welcomed an historic first meeting Friday in Cuba between the Pope and the Patriarch of Russia's dominant Orthodox Church. The Orthodox Church split with Rome in 1054 and analysts say politics, both church and state, have been driving the relationship in the centuries since. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Used Books Get a New Life on the Streets of Lagos

    Used booksellers are importing books from abroad and selling them on the streets of Africa's largest city. What‘s popular with readers may surprise you. Chris Stein reports from Lagos.
    Video

    Video After NH Primaries All Eyes on South Carolina

    After Tuesday's primary in New Hampshire, US presidential candidates swiftly turned to the next election coming up in South Carolina. The so-called “first-in-the-South” poll may help further narrow down the field of candidates. Zlatica Hoke reports.
    Video

    Video US Co-ed Selective Service Plan Stirs Controversy

    Young women may soon be required to register with the U.S. Selective Service System, the U.S. government agency charged with implementing a draft in a national emergency. Top Army and Marine Corps commanders told the Senate Armed Services Committee recently that women should register, and a bill has been introduced in Congress requiring eligible women to sign up for the military draft. The issue is stirring some controversy, as VOA’s Bernard Shusman reports from New York.
    Video

    Video Lessons Learned From Ebola Might Help Fight Zika

    Now that the Ebola epidemic has ended in West Africa, Zika has the world's focus. And, as Carol Pearson reports, health experts and governments are applying some of the lessons learned during the Ebola crisis in Africa to fight the Zika virus in Latin America and the Caribbean.
    Video

    Video Smartphone Helps Grow Vegetables

    One day, you may be using your smartphone to grow your vegetables. A Taipei-based company has developed a farm cube — a small, enclosed ecosystem designed to grow plants indoors. The environment inside is automatically adjusted by the cube, but it can also be controlled through an app. VOA's Deborah Block has more on the gardening system.
    Video

    Video Illinois Voters Have Mixed Emotions on Obama’s Return to Springfield

    On the ninth anniversary of the launch of his quest for national office, President Barack Obama returned to Springfield, Illinois, to speak to the Illinois General Assembly, where he once served as state senator. His visit was met with mixed emotions by those with a front-row seat on his journey to the White House. VOA's Kane Farabaugh reports.
    Video

    Video Exhibit Turns da Vinci’s Drawings Into Real Objects

    In addition to being a successful artist, Renaissance genius Leonardo da Vinci designed many practical machines, some of which are still in use today, although in different forms. But a number of his projects were never realized — until today. VOA’s George Putic reports.
    Video

    Video Heated Immigration Debate Limits Britain’s Refugee Response

    Compared to many other European states, Britain has agreed to accept a relatively small number of Syrian refugees. Just over a thousand have arrived so far -- and some are being resettled in remote corners of the country. Henry Ridgwell reports on why Britain’s response has lagged behind its neighbors.
    Video

    Video Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growth

    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.

    World Currencies

    EUR
    USD
    0.8812
    JPY
    USD
    112.18
    GBP
    USD
    0.6939
    CAD
    USD
    1.3961
    INR
    USD
    68.436

    Rates may not be current.