Most Active Stories
Thu October 17, 2013
Most Fast Food Workers Rely On Public Assistance
Originally published on Thu October 17, 2013 3:59 pm
A new report by researchers at the University of California Berkeley finds that despite working and taking home a pay-check, more than half of fast-food workers rely on public assistance programs such as food stamps or Medicaid to cover their basic needs.
- UC Berkeley: Low-Wage Fast-Food Jobs Leave Hefty Tax Bill, Report Says
- CNN: Half Of Fast Food Workers Need Public Aid
- Fast Food Worker: We Want $15 An Hour And A Union
JEREMY HOBSON, HOST:
It's HERE AND NOW.
And if you go to a fast-food drive-thru, chances are that the cashier who rings you up is relying on public assistance. UC Berkeley researchers report that despite working and taking home a paycheck, more than half of fast-food workers rely on public assistance programs like food stamps or Medicaid.
NPR food and health correspondent Allison Aubrey joins us now. And Allison, more than half?
ALLISON AUBREY, BYLINE: That's right, Jeremy. And when you think about it, given that the median wage of folks on the front lines in these fast-food restaurants - so we're talking cooks, cashiers and crew - that they're making about $8.70 an hour, maybe it isn't that much of a surprise.
HOBSON: Well, is that what people are pointing to, is just the waves that these people are making, because obviously there are industries where people also make that kind of wage?
AUBREY: That's part of it. I spoke to Ken Jacobs, who chairs Berkeley's Center for Labor Research and Education. He's one of the authors of the report. And, you know, what he said is really surprising here, is who's really working at these fast-food restaurants; it's not the case that the typical worker is a teenager, someone living at home with their parents.
KEN JACOBS: The income from fast-food restaurants is not sort of extra supplemental income for a family. In the vast majority of the families with fast-food workers, that income is core to their family finances. And it's too low and too few benefits that are provided for families to make it on their own.
AUBREY: So what he's really saying here is that it's not just below hourly wages. But in many cases it's lack of health care benefits and often that fact that only part-time hours are available.
HOBSON: And I assume that people may say, well, they should just pay them more. And the fast-food restaurants might say back to that, well, you're going to then pay more for your burger. But what do we pay more as taxpayers to help pay for these public assistance programs?
AUBREY: That's right. So it's us, the taxpayers, who are footing the bill for these public assistance programs. And the researchers put that price tag at about $7 billion a year.
AUBREY: They've tallied up the demand for various programs, and they found that the workers in the fast food sector create substantial need to the tune of $3.9 billion in Medicaid and children's health insurance programs, subsidies, $1 billion in SNAP subsidies. These are food stamps. And another $1.9 billion per year in earned income tax credit payments. These are subsidies for low-wage workers. So you put that together, that's $7 billion that U.S. taxpayers are footing the bill for.
Meanwhile, McDonald's shareholders have seen their dividends increase and companies such as Yum! Brands have reported, you know, increased profits and stock prices.
HOBSON: So what's the solution here? Is it just to raise the wages of these workers?
AUBREY: Well, sure. I mean the economists involved in this study say raising the wages of workers is the place to begin. Now, you know, I should point out that the report was funded by Fast Food Forward, and this is a coalition of groups campaigning for higher wages for fast-food workers in New York. But you know, definitely there are competing views here of the best thing to do.
I mean more conservative-leaning economists say that raising wages would lead to a significant slow down in hiring by these fast-food companies, and that the unintended consequence would be that there would be more workers looking for jobs and that that would create the need for more public assistance, not less.
I spoke to Michael Strain. He's a resident scholar at the American Enterprise Institute. He describes himself as a center-right economist. And he said, you know, in his view, this $7 billion taxpayer bill is not necessarily problematic.
MICHAEL STRAIN: Not to say that it's working perfectly, but in general the government is making sure that these people's basic needs are met, which is an appropriate role of government. And businesses are paying them a wage that businesses judge to be, you know, roughly equal to the value they're adding to the production process.
AUBREY: You know, so in his view businesses are calculating wages based on productivity, and the government is stepping in as the safety net. And he says that's OK. So I really think there's a lot more to come on this topic.
HOBSON: Allison Aubrey is NPR's food and health correspondent. Allison, thanks as always.
AUBREY: Thanks very much, Jeremy.
HOBSON: You're listening to HERE AND NOW. Transcript provided by NPR, Copyright NPR.