Why do Fast Food Workers Get $7 billion From Taxpayers?

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A new report written by economists at the University of California-Berkeley and the University of Illinois has revealed that 50% of fast food workers in American receive around $7 billion a year in public assistance coming directly from taxpayers. Why is this figure so large and why doesn’t the fast food industry pay its employees a living wage and take the strain off of taxpayers?

Money as a supplement to low incomes

According to the report, the huge amount of public assistance given to individuals working within the fast food industries is necessary supplement their low incomes.

A range of government programs feeding fast food employees

Fifty-two percent of fast food workers and their families are dependent on a variety of government programs, despite the fast food industry being worth $660 billion and employing 10% of the American workforce. These essential programs include:

• Medicaid amounting to $3.9 billion annually according to the U.S. Bureau of Labor Statistics
• Food stamps amounting to $1.04 billion annually
• Earned Income Tax Credit amounting to $1.91 billion annually
• Temporary Assistance for Needy Families

To place the figures into perspective, while 52% of fast food employees receive these forms of assistance, only 25% of the total American workforce is in receipt of public assistance.

Fast food industry costing taxpayers $3.8 billion in public assistance

The National Employment Law Project calculates that the 10 biggest fast-food companies in the U.S. cost in excess of $3.8 billion per year in public assistance. Those companies include:

• McDonalds’s
• Subway
• Burger King
• Pizza Hut
• Taco Bell
• KFC

Of these employers, 707,850 of workers from McDonalds’s in America receive $1.2 billion each year in public assistance.

Massive profits, minimum pay

Each year, the American fast food industry generates sales equating to $200 billion dollars. Yet, its workers are receiving a raw deal, getting only an average of $6.89 an hour for their hard work. A lot of fast food workers work part time. This may partially explain the need for federal assistance. However, even the families of fast food employees that work full-time receive public assistance. This shows clearly that the fast food industry does not reinvest enough of its colossal profits into adequately sustaining employees’ salaries to a living wage.

Living in poverty

The situation is worse than not making enough money to live on and being supplemented by the government’s public assistance programs. The report shows that 1 in 5 families of fast food workers are living in poverty. Typically, the combination of very low wages and minimal benefits and part-time employment create a highly adverse environment for fast food workers and their families, meaning they have no choice but to turn to taxpayer-funded supplement programs in order to basically survive from month to month.

How can the situation be improved?

The crux of the report is that the fast food industry needs to implement serious change in order to improve workers’ wages and benefits and help relieve the huge strain the industries underpayment of employees is placing on public assistance. Some employment specialists are calling for unionization of the fast food industry in order to regulate wages and benefits and give employees fairer prospects.

Do you think that the fast food industry should be unionized? Is it fair that such a profitable industry pays its employees so poorly and charges the taxpayer with the deficit? Tell us what you think!