Low Paid Fast-Food Workers Require $7 Billion a Year in Public Aid

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Above: Fast Food Strike August, 29, 2013 Photo: AFL CIO

More than half of employees working at the largest fast-food chains in the U.S. are earning so little in wages that they must rely on some sort of public assistance to get by, according to a new study co-published by the University of California-Berkeley and the University of Illinois on Tuesday.

The study, which came after large nationwide protests by fast-food workers this year, found that about 52 percent of U.S. fast-food workers had been dependant on at least one form of public assistance between 2007-2011, costing taxpayers nearly $7 billion a year.

In comparison, just 25 percent of the total U.S. workforce required government welfare benefits during the same period, prompting calls for higher minimum wages for the fast-food industry.

“The high participation rate of families of core fast-food workers in public programs can be attributed to three major factors: the industry’s low wages, low work hours and low benefits,” the UC Berkeley/U. Illinois report said.

The average front-line employee at a fast-food restaurant earns $8.69 an hour, and only 13 percent of these workers are estimated to have health insurance through their jobs, the report noted.

Additionally, due to industry scheduling hours, the median fast-food worker only gets to work 30 hours per week, compared to 40 for the rest of the workforce.

As a result, fast-food employees at over 50 American cities have gone on strike this year to demand the minimum wage to rise from $7.25 an hour to a “living wage” of $15 an hour.

According to Reuters, The U.S. fast-food industry generates sales of $200 billion a year. They employ close to 10 million Americans, with the median age of a fast-food worker at 28.

A separate report, also out Tuesday, by the National Employment Law Project, also calculated how much each restaurant’s employees were costing the federal government because they receive public assistance to supplement their wages.

McDonald’s, which has 707,850 employees, costs $1.2 billion; Yum! Brands, which includes Pizza Hut, Taco Bell and KFC, and employs 379,449, costs $648 million.

An anti-labour group, called Worker Center Watch, however criticised the studies’s credence as they were funded by Fast Food Forward, the labour group that helped organise worker protests this year.

The Employment Policies Institute, which has opposed calls for higher fast-food wages in the past, also warned that workers would be worse-off if wages went up because employers would “replace employees with less-costly automated alternatives.”


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