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Public Aid Crucial to Fast-Food Workers

The Boston Globe, October 16, 2013

 By Katie Johnston

More than half of fast-food workers’ families nationwide rely on public assistance to get by –double the rate of the overall workforce – at a cost of nearly $7 billion a year to US taxpayers, according to a study released Tuesday.

In Massachusetts, employees of McDonald’s, Burger King, and other fast-food chains receive $173 million a year in programs such as Medicaid and food stamps, research by the University of California at Berkeley and the University of Illinois at Urbana-Champaign found.

Fast-food workers have been campaigning to call attention to the low wages and minimal benefits they receive as employees of highly profitable corporations.

The economy has taken a toll on such workers, who are making less than they were a decade ago even as their ranks expand. While the majority of jobs lost during the recession were in the middle of the pay scale, the bulk of new positions created during the economic recovery have been at the lower end of the spectrum.

The study also contradicted the common belief that flipping burgers is predominantly a job done by teenagers. It found that two-thirds of fast-food workers are adults, and a quarter of them have children. Representatives of the restaurant industry disputed the study’s findings, calling them misleading.

In late August, thousands of fast-food workers in more than 60 cities, including Boston, took to the streets for a one-day walkout, picketing in front of stores to demand $15 an hour and the right to unionize. Among them was Georgina Gutierrez, 36, who has worked as a cook at a Dorchester Burger King for four years.

“I would like for us to get a raise in order to live better and be able to support our families better,” said Gutierrez, speaking in Spanish through a translator. “To be working so hard and under so much pressure from management and to not earn something decent, is not easy.”

Gutierrez said she helps support her disabled mother and three nieces and nephews on $8.25 an hour, 25 cents more than when she started, and relies on food stamps and subsidized health care. After taking part in the strike, she said, her hours were cut.

The study, funded by the advocacy group Fast Food Forward, looked at nonmanagerial fast-food employees who work at least 10 hours a week and 27 weeks a year, which account for more than 1.8 million workers nationwide. The report – coauthored by Jeremy Thompson, founder of the Economic Justice Research Hub and a visiting scholar at the University of Massachusetts Boston – said the median hourly wage for a fast-food worker is $8.69, and only 13 percent get health benefits through their employer.

The restaurant industry has a greater share of workers on public assistance than any other business sector in the country, the authors said. Even fast-food workers who put in more than 40 hours a week struggle to pay their bills. Fifty-two percent of all fast-food workers are from families receiving at least one form of public assistance.

“Having to rely on public assistance to make ends meet is the rule, rather than the exception,” said Ken Jacobs, coauthor of the study and chair of the Center for Labor Research and Education at the University of California at Berkeley.

The National Employment Law Project released a related study Tuesday showing that workers at the 10 largest fast-food companies in the United States account for more than half of the $7 billion in annual public assistance costs. McDonald’s – the largest, with more than 700,000 employees – costs taxpayers $1.2 billion a year, according to the nonprofit advocacy group for low-wage workers. The seven publicly traded corporations among the top 10 biggest fast-food chains made $7.4 billion in profits last year and paid $53 million to their top executives, the National Employment Law Project reported.

“These companies operate on a business model that leaves low-paid workers unable to afford basic necessities and leaves taxpayers on the hook for billions of dollars each year, but awards CEOs millions of dollars each year in executive compensation,” said report author Jack Temple. “Low wage fast-food jobs are expensive for all of us.”

Several organizations took issue with the reports, including the National Restaurant Association, which released a statement from Scott DeFife, its executive vice president of policy and government affairs.

“These misleading efforts use a very narrow lens and selective data to attack the industry for their own purposes and fail to recognize that the majority of lower-wage employees works part-time to supplement a family income,” DeFife said.

For instance, DeFife said, the University of California and University of Illinois report should not have included the Earned Income Tax Credit as a public benefit. The federal credit was designed to help working families and is not considered public assistance, he said.

The Employment Policies Institute, a pro-business organization in Washington D.C., also took aim at the reports, saying the majority of fast-food restaurants are franchises run by small business owners.

The increased attention on fast-food companies is making consumers more aware of the costs associated with these types of businesses, said Darrin Howell, deputy director of the local labor coalition MassUniting, which has been organizing fast-food workers in Boston. Diners may be enjoying inexpensive food, he said, but it is probably at the expense of their servers’ health insurance, and that costs everyone in the end.

“People want their burger and they want it fast, but they might not recognize what it’s taking out of their pocket besides the menu item,” Howell said, referring to billions of dollars in taxpayer money spent to prop up low-wage earners. “Their fight is your fight.”

 

Original Article

 

 
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