Majority of U.S. fast-food workers need public assistance -study

Reuters

By Atossa Araxia Abrahamian

NEW YORK, Oct 15 (Reuters) - More than half of low-wageworkers employed by the largest U.S. fast-food restaurants earnso little that they must rely on public assistance to get by,according to a study released on Tuesday.

This ends up costing U.S. taxpayers billions of dollars ayear, the study said.

Data from the U.S. Census Bureau and public benefit programsshow 52 percent of fast-food cooks, cashiers and other"front-line" staff had relied on at least one form of publicassistance, such as Medicaid, food stamps and the Earned IncomeTax Credit program, between 2007 and 2011, researchers at theUniversity of California-Berkeley and the University of Illinoissaid.

The Berkeley study was sponsored by the two universities andreceived funding from the pro-labor organization Fast FoodForward.

In a concurrent report which drew from some of the samedata, the pro-labor National Employment Law Project found thatthe 10 largest fast-food companies in the United States costtaxpayers more than $3.8 billion each year in public assistancebecause the workers do not make enough to pay for basicnecessities themselves.

"It doesn't matter whether you work or shop at McDonald's ornot, the low-wage business model is expensive for everybody,"said NELP policy analyst Jack Temple, who worked on the report. "Companies ... are basically pushing off part of their costs onthe taxpayers."

The studies follow large nationwide demonstrations inAugust, when fast-food workers went on strike and protestedoutside McDonald's, Burger King and otherrestaurants in 60 U.S. cities, demanding a "living wage" of $15per hour.

The U.S. fast-food industry generates sales of $200 billiona year.

A spokeswoman for McDonald's Corp said in a statement thatthe company's franchisees "provide jobs in every state tohundreds of thousands of people" and that these jobs "range fromentry-level, part-time to full-time."

"Our history is full of examples of individuals who workedtheir first job with McDonald's and went on to successfulcareers both within and outside of McDonald's," the companysaid.

Burger King Worldwide Inc did not respond to requests forcomment. Wendy's Co declined to comment, and Yum BrandsInc did not provide a comment.

Such companies have long said that mostly young people dothe entry-level work of flipping burgers or making milkshakes.

The Employment Policies Institute, which has opposed callsfor higher fast-food wages in the past, said in a statement thatthe NELP report "cooked the books to come up with itseye-catching numbers" and did not acknowledge that "nearlyone-third of these 'front-line' workers are teenagers, or youngadults living with their parents and attending school."

The NELP found that the median age of a fast-food worker was28, Temple said.

EPI also warned that workers would be worse-off if wageswent up because employers would "replace employees withless-costly automated alternatives."

An anti-labor group called Worker Center Watch said thestudies lacked credence because they were funded by Fast FoodForward, the labor group that helped organize worker protests.

LOW-WAGE RUT

U.C. Berkeley labor economist Sylvia Alegretto, who workedon the report from her school and the University of Illinois,said the economic recovery did not make life much easier forthese workers, who are stuck in a low-wage rut.

"They took it on the chin when the economy was bad, and nowthat it's better, wages aren't going up," Alegretto said. "Infact, they're making less than their counterparts were 50 yearsago."

Alegretto said her team was "very conservative" inestimating the number of low-wage workers, counting only thosewho worked more than 10 hours a week for at least 27 weeks ayear.

The median wage for front-line fast-food workers is $8.94per hour, according to the NELP's analysis of government data.Many of these jobs are not full-time.

Twice as many fast-food workers enroll in public aidprograms than the overall workforce because of the low wages,limited work hours, and skimpy benefits their jobs afford them,according to the Berkeley study.

But even those who work full-time are struggling. More thanhalf of these families are enrolled in public assistanceprograms, the researchers said. This costs taxpayers nearly $7billion per year, more than half of which is in health insurancecosts.

Overall, families with a working member account for 73percent of all enrollments, amounting to two-thirds of allpublic benefits spending, the study said.

In other types of service work, such as maintenance, laundryand personal services, the researchers found that one-third ofemployees are enrolled in public assistance programs, as wereabout 30 percent of workers in the retail and hospitalitysectors.

The time frame of the Berkeley study includes the 2007-2009recession and the subsequent years of slow economic growth.During that time, the number of workers eligible for publicassistance increased in some states.

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