The fast-food industry costs American taxpayers nearly $7 billion a year because its jobs pay so little that 52 percent of fast-food workers are forced to enroll their families in public assistance programs, according to a report released this week by researchers at the University of California-Berkeley.
Ken Jacobs, chair of the university’s Center for Labor Research and Education, said in a news release, “The taxpayer costs we discovered were staggering. 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.”
Fast food is a $200 billion-year industry but nationally the median wage for front-line workers at the restaurants is $8.69 an hour and just 13 percent of the jobs offer health benefits.
The research found that fast food jobs also usually offer part-time hours.
The situation – low wages, few hours and poor benefits – leaves many workers in need of some help. The researchers said families of front-line fast-food workers are enrolled in public programs at more than twice the rate of the overall workforce.
The government assistance adds up to:
• Medicaid and the Children’s Health Insurance Program, $3.9 billion per year.
• Earned Income Tax Credit payments, $1.95 billion per year.
• The Supplemental Nutrition Assistance Program, or food stamps, $1.04 billion per year.
• Temporary Assistance for Needy Families, $82 million per year.
According to the UC paper, the states where the fast-food industry’s low wages cost U.S. taxpayers the most are California at $717 million, New York at $708 million, Texas at $556 million, Illinois at $368 million and Florida at $348 million.
“This is the public cost of low-wage jobs in America,” said 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.”
Fast Food Forward provided the funding to conduct the research. The coalition consists of labor, religious and community groups campaigning for higher wages and fair employment at fast food restaurants.
The report’s release follows months of direct action demonstrations by fast-food workers in 60 cities, including Milwaukee, for better wages and benefits. In Wisconsin, researchers said there are an estimated 28,000 fast-food workers.
Marc Doussard, one of the report’s co-authors and an assistant professor of urban and regional planning at the University of Illinois-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.”