What is in this article?:
- Studies: Federal aid for QSR workers costs U.S. taxpayers billions
- Restaurant wages vary widely
The National Restaurant Association calls the data misleading as the findings add fuel to the ongoing minimum-wage debates.
Two studies released Tuesday say the effects of low wages paid to quick-service restaurant workers ultimately cost Americans billions of dollars — a claim that could intensify the growing strife over restaurant industry pay.
A report from the University of California, Berkeley, found that low restaurant wages — and the subsequent need for workers to use government subsidies — cost U.S. taxpayers about $7 billion a year, while a study released by the pro-labor National Employment Law Project found that the 10 largest quick-service restaurant companies cost American taxpayers more than $3.8 billion a year in public assistance.
The restaurant industry has increasingly found itself at the focal point of a growing debate over hourly pay practices and the minimum wage in the United States. Advocates for higher wages have targeted quick-service restaurants, demanding an increase of pay to $15 per hour, from the federal hourly minimum wage of $7.25. Many advocates have organized protests, the largest of which encouraged worker walkouts at chains such as McDonald’s, Wendy’s and KFC in more than 60 cities in August.
“The combination of low wages, meager benefits and often part-time hours means that many of the families of fast-food workers must rely on taxpayer-funded safety-net programs to make ends meet,” said the UC-Berkeley report co-author Ken Jacobs, chair of the University of California, Berkeley Labor Center.
According to the report, 52 percent of families of core front-line workers at quick-service chains are enrolled in at least one of four federal safety-net programs as a result of poor wages — more than twice the rate of the U.S. workforce as a whole.
Jacobs said the $7 billion annual cost includes $3.9 billion for health insurance through Medicaid and the Children’s Health Insurance Program, $1.9 billion for the Earned Income Tax Credit, slightly more than $1 billion for the Supplemental Nutrition Assistance Program, and the remainder for Temporary Assistance for Needy Families program.
The National Restaurant Association disputed the reports.
“These misleading efforts use a very narrow lens and selective data to attack the industry for their own purposes and fail to recognize that the majority of lower-wage employees works part-time to supplement a family income,” Scott DeFife, the National Restaurant Association’s executive vice president for policy and government affairs, said in a statement. “Moreover, 40 percent of line staff workers in restaurants, the primary focus of the reports, are students.”
Worker Center Watch, a coalition of business owners that opposes union activities, said the reports distorted facts and were funded by Fast Food Forward, an organization behind the recent restaurant strikes. Ryan Williams, spokesman for Worker Center Watch, said the studies were part of a “coordinated attempt by Big Labor to leverage worker centers as a way to soften up service industry employers for unionization. …”