Report: Taxpayers Spend $7B a Year Helping Fast-Food Workers Survive

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Through federal programs such as Medicaid and food stamps, taxpayers help fast-food workers get by despite their low wages.

You’ve probably heard about fast-food workers striking for a living wage and about how McDonald’s budgeting guide for employees tells them they need two full-time jobs to make ends meet.

Now, two new reports show just how much taxpayers spend to subsidize the people trying to get by on those low wages, The Washington Post says. It’s about $7 billion per year.

There are about 1.8 million “core” fast-food workers, and more than half of them rely on federal government benefits. They claim nearly $1.9 billion a year through the earned income tax credit, $1 billion in food stamps, and $3.9 billion through Medicaid and the Children’s Health Insurance Program.

One of the reports comes from the University of California at Berkeley’s Labor Center and the University of Illinois and was funded by Fast Food Forward, a group supporting fast-food strikes. The other report comes from the National Employment Law Project, a worker advocacy group.

National Restaurant Association executive vice president Scott DeFife said the reports’ data were deliberately misleading, according to the Post. He singled out the EITC as a program “designed for working families, not public assistance, and is used to inflate their numbers.” (OK, but what about the other $5 billion, one wonders.)

Other critics said restaurant jobs are a valuable path into the workforce, the Post says. Maybe, but they could also be seen as a broken rung on the career ladder. Another report from a couple of months ago noted that more than two-thirds of fast-food workers are over the age of 20, that most have at least a high school diploma and many are college-educated, and that older fast-food workers make little more despite their education, age and experience.

Here’s what else the two new reports found:

  • A quarter of the U.S. workforce is enrolled in public assistance programs, while more than half of fast-food workers are.
  • “One in five families with a member holding a fast-food job has an income below the poverty line, and 43 percent have an income two times the federal poverty level or less,” says the Labor Center report. The federal poverty line for a family of four is $23,550.
  • The 10 largest fast-food companies in the U.S. cost taxpayers an estimated $3.8 billion per year, with McDonald’s representing nearly a third of that.
  • Among those 10, seven are publicly traded and last year collectively earned $7.4 billion in profits, paid $52.7 million to top executives, and distributed $7.7 billion in dividends and stock buybacks.

Let us know what you think about the findings on Facebook.

Stacy Johnson

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