By Atossa Araxia Abrahamian
NEW YORK Oct 15 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
The Berkeley study was sponsored by the two universities and
received funding from the pro-labor organization Fast Food
In a concurrent report which drew from some of the same
data, 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
"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 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
The U.S. fast-food industry generates sales of $200 billion
A spokeswoman for McDonald's Corp said in a statement that
the company's franchisees "provide jobs in every state to
hundreds of thousands of people" and that these jobs "range from
entry-level, part-time to full-time."
"Our history is full of examples of individuals who worked
their first job with McDonald's and went on to successful
careers both within and outside of McDonald's," the company
Burger King Worldwide Inc did not respond to requests for
comment. Wendy's Co declined to comment, and Yum Brands
Inc did not provide a comment.
Such companies have long said that mostly young people do
the entry-level work of flipping burgers or making milkshakes.
The Employment Policies Institute, which has opposed calls
for higher fast-food wages in the past, said in a statement that
the NELP report "cooked the books to come up with its
eye-catching numbers" and did not acknowledge that "nearly
one-third of these 'front-line' workers are teenagers, or young
adults living with their parents and attending school."
The NELP found that the median age of a fast-food worker was
28, Temple said.
EPI also warned that workers would be worse-off if wages
went up because employers would "replace employees with
less-costly automated alternatives."
An anti-labor group called Worker Center Watch said the
studies lacked credence because they were funded by Fast Food
Forward, the labor group that helped organize worker protests.
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
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
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
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
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.