How to reduce $7 billion in public spending: A higher wage for fast-food workers

By Elizabeth Lefebvre| comments | Print this pagePrint | Email this pageShare
blog Social Justice

A report this week from the Labor Center at UC Berkeley (Fast food, poverty wages: The public cost of low-wage jobs in the fast-food industry) shows that although about 25 percent of all workers receive some type of public assistance benefits, the number jumps to 52 percent when considering fast-food workers.

The median wage for a fast-food employee is about $8.69 an hour, and more than 87 percent of these workers do not receive health benefits from their employers. This combination of factors means that people often must rely on public programs for basic needs such as food and medical assistance. The numbers from the report are staggering: More than $7 billion is spent annually on public assistance to fast-food workers alone.

Even for full-time workers, fast-food wages are nowhere near enough to provide for the costs of living. A living wage calculator from MIT estimates that an adult with one child needs to earn about $20 an hour to cover basic expenses in the Chicago area—much more than what is being made in the fast-food industry. Another report out this month from the National Employment Law Project confirms that the food corporations are making plenty of profits. McDonald’s CEO Donald Thompson’s compensation from fiscal year 2012 was 13.7 million; the company’s total profits were 5.46 billion. And, as we’ve written about before, in order for McDonald’s employees to earn $15 an hour, the cost of a Big Mac would rise only 68 cents. Last week a video went viral of an employee confronting McDonald’s USA president David Stratton, shouting that, "It's really hard for me to feed my two kids and struggle day to day. Do you think this is fair, that I have to be making $8.25 when I have worked for McDonald's for 10 years?"

I’m no economist, but it seems pretty simple: raising the minimum wage and providing affordable health care will decrease the amount of taxpayer dollars spent to provide these needs to people. Charles Clark is an economist, and when we spoke with him earlier this year, he said: “The research clearly shows that once you raise the minimum wage, the whole bottom wage structure rises with it. The last study that I saw found the bottom 40 to 50 percent of wages start to creep up once you raise the minimum wage. That’s a way of creating rules to push people up.” Earlier this summer, Bishop Stephen Blaire of the USCCB said in a testimony to Congress, “Increasing the minimum wage to a level that reflects the real economic reality faced by families today would go far in building an economy worthy of the humans that operate in it.”

For people fed up with the idea of the government giving “handouts” to people, here’s some food for thought: Let’s raise the minimum wage so that people who work hard can still afford to eat.

Image: Ramon FVelasquez, Wikimedia Commons