New Report: Fast Food, Poverty Wages

New report shows taxpayers picking up $7 billion-per-year tab for low-wage fast-food jobs

Labor, faith and community groups gathered at Minneapolis Wendy’s to highlight high public costs of low wages

Minneapolis, Minn. (October 15, 2013) — Community members gathered at a Minneapolis Wendy’s restaurant to bring attention to a new report by researchers at the University of California, Berkeley showing that the fast-food industry costs American taxpayers nearly $7 billion per year because their jobs pay so little. The report found that 52 percent of fast food workers are forced to enroll their families in public assistance programs because of their low wages.

“Instead of subsidizing poverty wages at corporations like Wendy’s and McDonald’s to the tune of $7 billion per year, we should be investing that money in public programs like K-12 education and healthcare,” said SEIU Local 284 Executive Director Carol Neiters. “These corporations bring in billions of dollars of profits each year, yet they pay their workers so little, forcing their workers to rely on government assistance.”

Fast-food is a $200-billion-a-year industry, yet 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, compared to 59 percent of workers as a whole. The researchers said families of frontline fast-food workers are enrolled in public programs at more than twice the rate of the overall workforce.

“This report highlights that Minnesotans working in fast-food jobs can work full time and still not have enough money to provide for their families,” said The Reverend  Grant Stevenson, clergy leader with ISAIAH. “It is wrong that these fast-food companies are raking in billions in profits while their workers are more likely to live in or near poverty and be in need of government assistance than workers in any other industry.”

Marc Doussard, one of the report’s coauthors and an assistant professor of urban and regional planning at the University of Illinois at Urbana-Champaign, said the report also 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.”

The researchers found that the fast-food industry’s low wages and meager benefits, often accompanied by part-time hours, combine to create substantial public assistance needs, including:

  • 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

Read the Fast Food, Poverty Wages report  HERE.

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Minnesotans for a Fair Economy

Minnesotans for a Fair Economy is a coalition of labor, community and faith organizations that are fighting for an economy that works for all of us.

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