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900,000 Number of fast-food workers who use federal safety nets

$1.9 billion Amount they collected through the earned income tax credit

$1 billion Amount they collected in food stamps

$3.9 billion Amount they collected through Medicaid and the Children’s Health Insurance Program

$7.4 billion Profits last year by nation’s seven largest publicly traded fast food firms

Report: Low fast-food wages come at high cost

  • Article by: Michael A. Fletcher
  • Washington Post
  • October 15, 2013 - 6:38 PM

 

Taxpayers are spending nearly $7 billion a year to supplement the wages of fast-food workers, even as the leading fast-food companies earn billions of dollars in annual profits, according to a pair of reports released Tuesday.

More than half of the nation’s 1.8 million “core” fast-food workers rely on the federal safety net to make ends meet, the reports said. Together, they 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, said a report by economists at the University of California at Berkeley’s Labor Center and the University of Illinois.

Overall, the “core” fast-food workers are twice as likely to rely on public assistance than workers in other fields, said one of the reports, which examined nonmanagerial fast-food employees who work at least 11 hours a week and 27 weeks a year. Even among the 28 percent of fast-food workers who were on the job 40 hours a week, the report said, more than half relied on the federal safety net to get by.

“These statistics paint a picture of workers not being able to get their fair share of the largest, richest economy in the world,” said Sylvia Allegretto, lead author of the report. “It is a good thing that we have these work supports, but they should be a last resort.”

Those workers are left to rely on the public safety net even though the nation’s seven largest publicly traded fast-food companies netted a combined $7.4 billion in profits last year, while paying out $53 million in salaries to their top executives and distributing $7.7 billion to shareholders, said to a second report by the National Employment Law Project, a worker advocacy group.

The reports lend academic support to the growing activism among fast-food workers, employees of federal contractors and other low-wage workers, who have been calling a series of small but growing one-day strikes. The workers are demanding raises to $15 an hour and an easier route to forming unions.

Fast-food industry representatives call the workers’ demands unrealistic. Raising wages for cooks, cashiers and drive-through window workers — who earn a median wage of $8.69 an hour — would lead to fewer jobs overall, they argue. But advocates for fast-food workers say the new reports demonstrate what they have long suspected: that the industry generates substantial profits that are distributed inequitably.

© 2014 Star Tribune