Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry
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Nearly three-quarters (73 percent) of enrollments in America’s major public benefits programs are from working families. But many of them work in jobs that pay wages so low that their paychecks do not generate enough income to provide for life’s basic necessities. Low wages paid by employers in the fast-food industry create especially acute problems for the families of workers in this industry. Median pay for core front-line fast-food jobs is $8.69 an hour, with many jobs paying at or near the minimum wage. Benefits are also scarce for front-line fast-food workers; an estimated 87 percent do not receive health benefits through their employer. The combination of low wages and benefits, often coupled with part-time employment, means that many of the families of fast-food workers must rely on taxpayer-funded safety net programs to make ends meet.
This report estimates the public cost of low-wage jobs in the fast-food industry. Medicaid, the Earned Income Tax Credit and the other public benefits programs discussed in this report provide a vital support system for millions of Americans working in the United States’ service industries, including fast food. We analyze public program utilization by working families and estimate total average annual public benefit expenditures on the families of front-line fast-food workers for the years 2007–2011.1 For this analysis we focus on jobs held by core, front-line fast-food workers, defined as nonmanagerial workers who work at least 11 hours per week for 27 or more weeks per year.
Main Findings
- More than half (52 percent) of the families of front-line fast-food workers are enrolled in one or more public programs, compared to 25 percent of the workforce as a whole.
- The cost of public assistance to families of workers in the fast-food industry is nearly $7 billion per year.
- At an average of $3.9 billion per year, spending on Medicaid and the Children’s Health Insurance Program (CHIP) accounts for more than half of these costs.
- Due to low earnings, fast-food workers’ families also receive an annual average of $1.04 billion in food stamp benefits and $1.91 billion in Earned Income Tax Credit payments.
- People working in fast-food jobs are more likely to live in or near poverty. One in five families with a member holding a fast-food job has an income below the poverty line, and 43 percent have an income two times the federal poverty level or less.
- Even full-time hours are not enough to compensate for low wages. The families of more than half of the fast-food workers employed 40 or more hours per week are enrolled in public assistance programs.
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Press Coverage
Fast Food in Denmark Serves Something Atypical: Living Wages
New York Times | October 27, 2014Is the Fast-Food Industry Driving Income Inequality in America?
Wall St. Cheat Sheet | October 15, 2014Rich and on the dole
New York Daily News | October 14, 2014Four takeaways from Joe Biden’s Las Vegas visit
Las Vegas Sun | October 6, 2014Marriott to hotel guests: Please pay our maids for us
Fortune | September 16, 2014Dignity: Fast-food workers and a new form of labor activism
The New Yorker | September 15, 2014Study: Fast Food Workers More Likely To Be On Publicly Subsidized Healthcare
Capital Public Radio | September 4, 2014Union Workers Push for Minimum Wage Hike
ABC7 News | September 1, 2014A university president gave up $90,000 to give his minimum wage workers a raise
Vox | August 11, 2014Opinion: Why fast food workers need be be paid more
CNN | May 15, 2014The fast food strike: the hard facts behind the Big Mac attack
PBS Newshour | May 15, 2014Fast food workers to strike again
Boston Globe | May 14, 2014The Blame-Game, Double Standards & Fast Food: A Tale of the United States Economy
The London Economic | May 13, 2014Wall Street Journal Promotes Falsehood That Higher Wages Push Workers Onto Government “Dole”
Media Matters for America | May 6, 2014Fast Food Pulls a Fast One
Moyers & Company | April 29, 2014How taxpayers subsidize millions in restaurant CEO pay
CBS MoneyWatch | April 22, 2014Fast-food CEOs make 1,000 times more than their workers
CBS MoneyWatch | April 22, 2014How high should minimum wage go?
Cincinnati Enquirer | April 7, 2014Thumbs-up for $15-an-hour minimum wage in new S.F. poll
San Francisco Chronicle | March 16, 2014Report: Minimum wage hike would cut food stamp spending by $4.6 billion a year
Washington Post | March 4, 2014Hey, Washington! The Pay Is Too Damn Low: The Minimum-Wage War
Rolling Stone | February 27, 2014For $1 per Big Mac, a truly livable salary for millions
Boston Globe | February 18, 2014Why McDonald’s Should Focus on Less Beef and Higher Wages
The Guardian | January 29, 2014Bill O’Reilly Blesses Minimum Wage Hike
San Francisco Chronicle | January 15, 2014Raise Minimum Wages, Say Some on the Right
San Francisco Chronicle | January 12, 2014Audio: McDonald’s Tells Full-Time Employee to Apply for Welfare Benefits
Moyers & Company | October 24, 2013Fast-Food Giants Make Billions while their Workers use Billions in Welfare Benefits
Alternet | October 15, 2013McDonald’s on employee resources site: Not lovin’ it
CNN | December 26, 2013The Minimum Wage and McDonald’s Welfare
Bloomberg | December 17, 2013Is service work today worse than being a household servant?
Al Jazeera America | December 10, 2013Fox Piles On Big Business’ Attempt To Smear Fast Food Protesters As “Rent-A-Mobs”
Media Matters for America | December 10, 2013Editorial: Work and Rewards
New York Times | December 6, 2013Large number of low-wage workers rely on public assistance programs
89.3 KPCC Southern California Public Radio, Airtalk | December 5, 2013Want to Cut Food Stamp Spending? Raise the Minimum Wage
Huffington Post | December 3, 2013Life on $7.25 an Hour: Older Workers Are Increasingly Entering Fast-Food Industry
New York Times | November 28, 2013Walmart Employees Organize Food Drive… for Other Walmart Employees
Yahoo Finance | November 18, 2013Commentary: When fast food corporations hold down wages, it affects all of us
by Ken Jacobs | Sacramento Bee | November 13, 2013Taxpayers pay high cost for low fast-food wages, lawmakers are told
Los Angeles Times | November 13, 2013Report: Fast Food Bad for California Taxpayers
KCRA 3 News, Sacramento | November 13, 2013California Legislature Holds Joint Fast Food Wages Hearing
Capital Public Radio | November 13, 2013Legislators Probe Taxpayer Cost of Aiding Fast-Food Workers
San Francisco Chronicle | November 13, 2013Lowering the Minimum Wage? What a Terrible Idea
The Guardian | November 12, 2013Editorial: Fast-Food Subsidy Unsavory
St. Louis Post-Dispatch | November 7, 2013One NYC Family’s Struggle to Survive on a Fast Food Salary
PBS NewsHour | November 4, 2013Bill Maher: Average fast food worker is 29, most are on public assistance
PunditFact | November 4, 2013Low Wages Force More Than Half Of Fast Food Workers To Rely On Government Assistance
Business Insider | November 3, 2013The Real Cost of Fast Food
Center for Economic and Policy Research | October 31, 2013Editorial: Taxpayers’ $7 billion Subsidy to Fast-Food Profits Should End
St. Louis Post-Dispatch | October 30, 2013Taxpayers Spending $7 Billion To Supplement Fast-Food Workers’ Wages
International Business Times | October 18, 2013How Multi-Billion Dollar Corporations Rely on the Public to Feed their Workforce
American Prospect | October 16, 2013Why US Taxpayers Pay $7 Billion A Year To Help Fast-Food Workers
NPR The Salt blog | October 16, 2013Fast-food workers leaning on federal aid
CBS MoneyWatch | October 16, 2013Public Aid Crucial to Fast-Food Workers
Boston Globe | October 16, 2013Fast Food, Big Costs
San Diego Union-Tribune | October 16, 2013Low fast-food wages come at high public cost, reports say
Washington Post | October 15, 2013Studies Link Fast-Food Wages to Public Assistance
Wall Street Journal | October 15, 2013McDonald’s Low Wages Cost Taxpayers $1.2 Billion Per Year: Study
Huffington Post | October 15, 2013McDonald’s Low Wages Come With a $7 Billion Side of Welfare
Bloomberg Businessweek | October 15, 2013Fast-Food Workers Are Costing the US $7 Billion a Year in Public Aid
Time | October 15, 2013Majority of US fast-food workers need public assistance –study
Reuters | October 15, 2013Majority of US fast food workers need public assistance
Al Jazeera America | October 15, 2013Low fast-food wages come at high cost to US taxpayers, says report
The Guardian | October 15, 2013Study: Taxpayers Foot Costly Bill for Fast-Food Workers
Atlanta Journal Constitution | October 15, 2013Fast-Food Workers Depend on Public Aid, Report Says
Chicago Tribune | October 15, 2013More Than Half of U.S. Fast Food Workers on Public Aid, Report Says
Los Angeles Times | October 15, 2013Public Assistance for Fast-Food Workers Costs Taxpayers, Reports Say
Kansas City Star | October 15, 2013Majority of Fast-Food Households are Using Welfare Assistance, Medicaid: Report
New York Daily News | October 15, 2013Report: Burger King Workers Collecting More than $300M in Public Assistance
Miami Herald | October 15, 2013Half of Fast Food Workers Receive Income Subsidies, Medicaid or Food Stamps, Study Says
Hartford Courant | October 15, 2013Low-wage fast-food jobs leave hefty tax bill, report says
UC Berkeley NewsCenter | October 15, 2013