An employee of McDonald’s Corp. (MCD) who has worked for the company for 10 years and called the company’s employee hotline for advice on how to make ends meet was told to seek help from food pantries, apply for food stamps, and check out Medicaid assistance. The Chicago woman’s call to the company’s McResources hotline was recorded and released Wednesday by a labor advocacy group called Low Pay is Not OK.
The incident comes just over a week after researchers at the University of California at Berkeley issued a report on the cost to the public of low-wage jobs in the fast food industry. The Berkeley study found that 52% of families of front-line fast-food workers are enrolled in one or more public assistance programs, more than double the rate of entire U.S. workforce.
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The cost to U.S. taxpayers according to the study is $7 billion a year. Healthcare accounts for $3.9 billion of the annual cost through Medicaid and the Children’s Health Insurance Program.
The question, of course, is what responsibility do McDonald’s and other employers have to pay their employees a wage that those employees can live on. Last summer we looked at the cost to McDonald’s, Yum! Brands Inc. (YUM), Burger King Worldwide Inc. (BKW), and The Wendy’s Co. (WEN) of paying a minimum wage of $15 an hour their tens of thousands of employees. We figured the cost to McDonald’s alone exceeded $8 billion. Combined, the cost to all four companies (and their franchise owners) came to nearly $20 billion.
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Is the $7 billion currently paid out to fast-food workers through public programs a reasonable subsidy for U.S. taxpayers to pay in order to save the fast-food companies some $20 billion in wage costs? The answer is left as an exercise for the reader.