Low Fast Food Wages Cost Taxpayers Billions
When fast food workers went on strike earlier this year, demanding an increase to the minimum wage, many were quick to attack the movement. Critics cited that increasing the minimum wage to $15 per hour was unreasonable, would prevent people from pursuing better careers, and would cost too much. As it turns out, a new study shows that because minimum wages are so low, taxpayers are already paying nearly $7 billion per year to provide welfare assistance to subsidize these sub-standard wages.
According to researchers at the University of Berkeley, between 2007 and 2011, fast food workers alone accounted for nearly $7 billion per year in taxpayer-funded welfare assistance programs. Meanwhile, the top 10 fast food companies in the United States saw massive $7 billion profits. Another study by the National Employment Law Project found that McDonald’s employees alone received $1.2 billion in welfare assistance per year. That can’t make any taxpayer happy, especially when experts say a wage increase to $15 per hour could be covered by raising the price of a Big Mac by just one dollar.
While critics deride the idea of a higher minimum wage, claiming that it would cause people to stop trying to find better jobs to improve their life, reports show that the people working behind the counter have drastically changed over the last 40 years. Once an entry level job for high schoolers and college students, 68 percent of fast food workers are married or single adults and 26 percent have children. Clearly, this has a lot to do with the overall economy with job openings at a distinct premium.
Because the modern fast food worker needs to support a family, the number of fast food workers applying for Medicaid and food stamps is staggering. While 25 percent of the workforce is enrolled in one or more public assistance programs, more than half of fast food workers receive welfare assistance.
While $15 is an arbitrary number, the minimum wage is certainly due for an increase. When adjusted for inflation, the minimum wage $9.50 per hour in 1978 and as high as $10.74 in 1968.