Majority of U.S. fast-food workers need public assistance -study

So we're paying for people to work at McDonald's with our taxes while the 10 biggest fast-food chains profit in the 10's of billions. Why am I subsidizing their business and socializing their costs while they privatize their profits. We are basically a service sector economy and the service sector are screwing us all.

REUTERS REPORT



By Atossa Araxia Abrahamian

Oct 15 (Reuters) - More than half of low-wage workers employed by the largest U.S. fast-food restaurants earn so little that they must rely on public assistance to get by, according to a study released on Tuesday.
This ends up costing U.S. taxpayers billions of dollars a year, the study said.
Data from the U.S. Census Bureau and public benefit programs show 52 percent of fast-food cooks, cashiers and other "front-line" staff had relied on at least one form of public assistance, such as Medicaid, food stamps and the Earned Income Tax Credit program, between 2007 and 2011, researchers at the University of California-Berkeley and the University of Illinois said.
In a concurrent report, the pro-labor National Employment Law Project found that the 10 largest fast-food companies in the United States cost taxpayers more than $3.8 billion each year in public assistance because the workers do not make enough to pay for basic necessities themselves.
"It doesn't matter whether you work or shop at McDonald's or not, the low-wage business model is expensive for everybody," said NELP policy analyst Jack Temple, who worked on the report. "Companies ... are basically pushing off part of their costs on the taxpayers."
The studies follow large nationwide demonstrations in August, when fast-food workers went on strike and protested outside McDonald's, Burger King and other restaurants in 60 U.S. cities, demanding a "living wage" of $15 per hour.
The U.S. fast-food industry generates sales of $200 billion a year. The companies have long said that mostly young people do the entry-level work of flipping burgers or making milkshakes and that these positions are stepping stones to higher-paying jobs. However, the NELP found that the median age of a fast-food worker was 28, Temple said.
McDonald's Corp and Burger King Worldwide Inc did not respond to requests for comment. Wendy's Co declined to comment, and Yum Brands Inc did not immediately provide a comment.
The Employment Policies Institute, which has opposed calls for higher fast-food wages in the past, said in a statement that the reports "ignore economic evidence that dramatic wage hikes would make fast food workers worse off" when employers "replace employees with less-costly automated alternatives."
LOW-WAGE RUT
U.C. Berkeley labor economist Sylvia Alegretto, who worked on the report from her school and the University of Illinois, said the economic recovery did not make life much easier for these workers, who are stuck in a low-wage rut.
"They took it on the chin when the economy was bad, and now that it's better, wages aren't going up," Alegretto said. "In fact, they're making less than their counterparts were 50 years ago."
Alegretto said her team was "very conservative" in estimating the number of low-wage workers, counting only those who worked more than 10 hours a week for at least 27 weeks a year.
The median wage for front-line fast-food workers is $8.94 per hour, according to the NELP's analysis of government data. Many of these jobs are not full-time.
Twice as many fast-food workers enroll in public aid programs than the overall workforce because of the low wages, limited work hours, and skimpy benefits their jobs afford them, according to the Berkeley study.
But even those who work full-time are struggling. More than half of these families are enrolled in public assistance programs, the researchers said. This costs taxpayers nearly $7 billion per year, more than half of which is in health insurance costs.
Overall, families with a working member account for 73 percent of all enrollments, amounting to two-thirds of all public benefits spending, the study said.
In other types of service work, such as maintenance, laundry and personal services, the researchers found that one-third of employees are enrolled in public assistance programs, as were about 30 percent of workers in the retail and hospitality sectors.
The time frame of the Berkeley study includes the 2007-2009 recession and the subsequent years of slow economic growth. During that time, the number of workers eligible for public assistance increased in some states. (Reporting by Atossa Araxia Abrahamian; Editing by Lisa Von Ahn and Bob Burgdorfer)

 

So, do you find this "free market" business model where they get to feed off of all of us a good thing even though it is cost you personally?

 

You inject 30 Million illegal aliens into a free market economy and your surprised at the outcome?

 

So illegal aliens is the issue? You guys can never take on any topic straight on. Jokes are all you resemble.

 

People have to want to do better but as long as the dims are subsidizing failure (and making it socially acceptable) this will continue.

 

Blame the victims of the economic colapse rather than those that continue to profit off of it. Nice.

 

Subsidizing failure? So people working to make your big Mac and bag your groceries are failures because they don't have the luxury of making what you make? If they didn't, someone else would have to, so no matter what, I guess there will always be failures. That's a mighty narrow, pessimistic view, even for a conservative.

 

As long as Obama continues to believe in Quantitative Easing (QE)...aka "printing money out of thin air", interest rates will remain low and equity investments will continue to rise. Folks that have money to invest...aka "the Rich" will continue to get richer and folks living on fixed incomes aka..."the Poor" will continue to get poorer.

I agree with you...if the money supply wasn't being artificially manipulated to create an "appearance" of recovery, interest rates would be much higher and we wouldn't be seeing such a widening of the "wealth gap".

I'll also agree that "temporary" taxation...just enough to sop up all this excess liquidity might not be a bad thing. However, when have you EVER seen a Liberal pass a "temporary" tax?

The only way out of this mess is a gradual REPLACEMENT of the Income Tax with the "Fair Tax". You get on board with that and I'll be your biggest supporter!

 

I just calls 'em as I sees 'em!

You had fog-of-war moen lamenting what it costs him to subsidize these minimum wage workers when the solution is to simply not subsidize them to the degree BO has/will. Folks settle into this lifestyle and "feed off of all of us" (his words, not mine) because they can, because it's easier than going out and putting forth real effort. Does anyone really believe flipping burgers is (or will ever be) the way to support a family?

 

By the way, there are A LOT of other jobs out there paying the same wage arena, not just fast foodies.. Are they all bad? Not in my opinion. What should the wage be for flipping burgers, or working in a non union shop, or clerking in a retail setting, or answering phones? Is it the employers' responsibility to pay you enough to support your family choices? I don't think so, and rather believe it's the individuals' responsibility to analyze their needs before ever accepting a job.

Accept responsibility for our own actions and choices.

 

Why do you think there are "a lot of jobs out there"? There are states with unemployment over 8%. Hell, the U.S. Unemployment rate is 7.3% . Where are all these jobs?

 

...in Obama's back pocket.

 

You beat me to it.

 

You don't really mean that, do you? Jump on Craigslist and look at employment by type. There is work if a soul wants to work. Which is really not the point of your rant.

 

You're are completely delusional if you think the number of jobs out there can meet demand. I can't do anything about the completely misinformed place you come from.
However, my point was that even those that work and do exactly what they are supposed to do make so little that they cannot support themselves or their families without tax payer assistance. Service sector jobs, the fast growing jobs area by the way, do not pay a living wage. Not even close apparently. So we as tax payer must pick up the difference because these highly profitable corporations are shifting their business costs to the tax payers. And you accept this practice blindly as the fault of the workers. You can't both scream about the cost of government and then turn around and side with those people screwing the tax payers. You can only have it one way or the other.

 

Understanding a problem is 90% of solving a problem. Understand the economic influences that have depleted our manufacturing base and you'll be on track to coming up with a workable solution. I agree with you, Joe...Government subsidies for low paid, unskilled jobs isn't the answer. Letting another Million illegal aliens into the country isn't the answer, either?

 

Manufacturing, for any reason your choose, has left this country and is not coming back anytime soon. From that starting point, jobs that used to pay a living wage are few and becoming even more scarce. Now that leaves us with two options. We can either accept that we will have a permanent class of low wage workers doomed to toil in poverty and subsidize their existence through our taxes or we can follow the money and make those that are continuing to profit handsomely from this situation pay a living wage. Either they pay it or we pay it. Those are the two options. If you know of a 3rd entity in this equation that would be willing to come up with the funding and that isn't simply blaming someone for what has happened, I'm all ears.

 

Get a job, and live WITHIN your means. Get educated, learn to save, learn to make do, learn self control, avoid greed. Learn to share with those less fortunate. Be a contributor instead of a whiner and a taker. Learn humility. And get happy!

 

The "Intelligentsia" in both parties simply agreed (without a vote) that unlimited Free Trade would be a boom for our economy, uplift poorer economies around the world, and end war. Remember when politicians of both parties said...

...remember that? Remember when Ross Perot warned that if we go down that road there will be a "...giant sucking sound of jobs leaving American"?

Sure, we created a lot of service sector jobs, but the folks that used to work in the factories don't know how to manage computer networks, relational databases, or websites. The idea was to re-train the American workforce...whatever happened to those programs? What actually happened was that a trained workforce wasn't ready when the jobs were...so the high paying service sector jobs were outsourced to companies overseas.

Another problem is that we never adjusted our tax code to meet these changes. Our "Free Trade" partners tax consumption while we still tax income. The result is that they tax our goods, but we don't tax theirs. Our products have an embedded 23% income tax and the goods we import don't. We don't tax internet sales, either. Yet more and more commerce is conducted on the internet, not in brick & mortar stores. This further shrinks revenue.

Instead of having a serious discussion on Tax Reform, the only solution seems to be "raise income taxes"...further shrinking the tax base. 47% of the population pays no tax while the top 5% have the resources and connections to "game" the system. That puts these income tax hikes squarely on the backs of folks in the $80,000 to $200,000 range...and we're Taxed Enough Already!!!

We don't need to shrink the tax base; we need to expand it. You can't do that without taxing consumption. When you REPLACE the income tax with a 23% national sales tax...the net price we pay for our goods remains the same, but imported goods increases by 23%. Additionally, goods we sell overseas are discounted 23% increasing demand for goods "Made in USA". In 2010, the Republic of South Korea sold over 600,000 cars in this country. You know how many US cars were sold there? ...less than 5000. Try to find a TV Made in USA.

I'm not against Free Trade as long as it's fair. If we're going to continue down this "Free Trade" road, we need to bring our tax code into the 21st century...and expand the tax base instead of shrinking it. If you really care about jobs in America and the plight of the poor...that's how you fix it. Plan out a ten (10) year transition...if it doesn't work, we can always transition back. No harm, no foul.

 

I rememner in high school when the teacher said you did not need an education or skill. They tol us burger flipper was a viable career choice. Janitor was a close second