Labor Center


Press Room


In the News 2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

Majority of Fast-Food Households are Using Welfare Assistance, Medicaid: Report

New York Daily News, October 15, 2013

 By Juan Gonzalez

More than half of households headed by workers at fast-food chains like McDonald’s and Burger King are forced to rely on Medicaid, food stamps and other federal assistance programs to survive, a stunning new report has concluded.

The cost to taxpayers of these indirect subsidies to the fast-food industry has now passed $7 billion annually, say researchers at the University of California-Berkeley Labor Center – with more that $700 million going to workers in New York State.

No other industry has such a large portion of its work force drawing federal assistance, the report found.

The revelations are further evidence that Democratic mayoral candidate Bill de Blasio is on target when he champions a “living wage” for the working poor as critical to improving the city’s economy.

Despite pleas from the city’s financial elite to moderate his rhetoric on wages, de Blasio plans to appear with fast-food workers at a press conference Wednesday in front of a Burger King in downtown Brooklyn.

On the heels of the new report, the Democratic front-runner is calling on lawmakers to investigate how low-wage jobs drain government safety net programs.

Since the Great Recession of 2008, 60% of all new jobs in the country have been low-wage service jobs.

And no one is producing them faster than the giant fast-food chains. Median wages for nonmanagerial workers in that industry are a meager $8.69 an hour, with nine of 10 employees not covered by health insurance, the Berkeley researchers found.

“We have too many, low-quality, no-benefit jobs in the country, period,” said economist Sylvia Allegretto, one of the authors of the report.

Tionnie Cross, 29, has one of those jobs. After more than two years of being unemployed, she landed a job earlier this year for $7.35 an hour at a McDonald’s in Brooklyn.

Cross depends on Medicaid for health insurance and on the city to provide her subsidized rent under a supportive housing program.

“But everything keeps going up in price, and I still can’t afford the rent each month,” she said.

A companion study from the National Employment Law Project estimates how much the major fast-food chains are costing taxpayers in public assistance to their employees.

Workers at McDonald’s get the most aid, $1.2 billion annually, the Law Project researchers found.

Employees of Yum Brands (owners of Pizza Hut, Taco Bell and Kentucky Fried Chicken) drew $648 million; those at Subway, $436 million; and those from Burger King, $356 million.

Asked about the two damning reports, the companies defended their record but did not refute the findings.

“We respect the rights of all workers,” a Burger King spokesman said. “However, Burger King Corp. does not make hiring, firing or other employment-related decisions for our franchisees.”

A spokeswoman for McDonald’s said:

“As with most small businesses, wages are based on local wage laws and are competitive to similar jobs in that market.”

Big Macs are small business?

The company recorded $5.4 billion in profits during 2012.

No wonder de Blasio, the man who would be our next mayor, wants a probe of the fast-food empires built on low-wages, no benefits and federal assistance.

 

Original Article

 

 
Center for Labor Research and Education
2521 Channing Way # 5555
Berkeley, CA 94720-5555
TEL (510) 642-0323    FAX (510) 642-6432


A public service and outreach program of the Institute for Research on Labor and Employment
CLRE