Half Of Fast Food Workers Get Public Assistance, And It's Costing Taxpayers $7 Billion A Year

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Reuters/David Ryder

A fast food worker holds his fist in the air outside a Subway restaurant during a strike in Seattle, Wash. Aug. 29, 2013.

Half of fast food workers rely on some form of public assistance to supplement their low wages, costing taxpayers roughly $7 billion annually, according to a report released Tuesday.

Fifty-two percent of fast food workers' families rely on government programs such as Medicaid, food stamps, the Earned Income Tax Credit and Temporary Assistance for Needy Families, according to the report written by economists at the University of California-Berkeley and the University of Illinois

By comparison, roughly 25% of the total workforce is enrolled in public assistance programs.

The fast food industry in the U.S. generates sales of about $200 billion of year and pays its workers an average of $8.69 an hour, according to the report. Many fast food employees work part time, but even the families of full-time employees —  specifically, more than half —  receive public assistance. 

Overall, one in five families of fast food workers are living in poverty, the report says.

"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," the report said. 

Using data from the Bureau of Labor Statistics and various public assistance programs between 2007 and 2011, the report estimates that $3.9 billion annually is spent on Medicaid and the Children's Health Insurance Program for fast food workers' families. 

The families also receive an annual average of $1.04 billion in food stamp benefits and $1.91 billion in Earned Income Tax Credit payments. 

The report concludes that public assistance "could be more effective if supplemented by measures that improve workers' wages and benefits."

A conservative think tank blasted the report as a quest by the Service Employees International Union to unionize the fast food industry. 

"In its quest to unionize the fast food industry, the SEIU has demonstrated that it will leave no stone unturned —  including using 'research' and arguments that would get a higher grade in creative writing than in a high school economics class," Michael Saltsman, research director at the Employment Policies Institute, said in a statement.

A separate report out Tuesday said that the 10 largest fast-food companies in the U.S. —  including McDonald's, Subway, and Burger King —  cost more than $3.8 billion annually in public assistance. The report was conducted by the pro-labor National Employment Law Project.

The report estimated that the roughly 707,850 workers employed by McDonald's in the U.S. receive about $1.2 billion annually in public assistance benefits. Annual benefits total $648 million for employees of Yum! Brands (which includes Pizza Hut, Taco Bell and KFC), $436 million for employees of Subway and $356 million for employees of Burger King, the report said.



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