This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How Our $7B a Year Lets Fast Food Companies Pay Minimum Wage

Stocks in this article: BWK MCD WEN YUM

BOSTON ( TheStreet) -- In September, workers from fast food chains in more than 60 cities across the nation went on strike to push for a wage increase to $15 an hour.

Many of those opposing the move have warned that such a wage increase could cost consumers, who would wind up being hit with a price bump on their burger. But it turns out Americans are already paying a high price to cover for the flat wages of fast food workers.

At least, that is the conclusion that can be drawn from two reports showing workers in the fast food industry rely heavily on public assistance to make ends meet -- at more than twice the rate of the overall workforce.

More than half (52%) of the families of frontline fast food employees are enrolled in one or more public assistance programs such as Medicaid, food stamps and Temporary Assistance for Needy Families, costing taxpayers up to $7 billion dollars a year, according to the report issued by the University of California at Berkeley's Labor Center.

Of those fast food workers enrolled in public assistance, nearly half are full-time. The states paying out the most in public assistance are California and New York, where $717 million and $708 million are spent each year, respectively.

"The paper is indicative of larger issues in the economy," said UC-Berkeley economist Sylvia Allegretto, co-chairwoman of the Center for Wage and Employment Dynamics and co-author of the report. "Corporate profits are highest on record, and workers' salaries are at a 50-year low."

The report also found that despite the traditional perception of the typical fast food worker as a teenager, two-thirds of them are in fact adults over the age of 20 and only a quarter of them minors. Additionally, the report revealed that 68% of these adult workers are the breadwinners for their household, yet a staggering 87% of them get no health benefits from their employer. This might explain why the largest expenditure in public assistance spent on fast food workers by far is Medicaid and the Children's Health Insurance Program, which accounts for $3.9 billion annually.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs