The $7 Billion Value Meal

Study shows majority of low pay workers on public assistance

By Stan Washington | 10/17/2013, 5:51 p.m.
If you think you are getting a bargain off of your favorite fast food restaurant’s value menu - look a ...
A new national study released this week shows that it costs taxpayers $7 billion and Georgia taxpayers $297 million annually in public assistance dollars to support low-paid fast food restaurant workers. Labor organizers, fast food workers, community leaders and politicians held a news conference at the MARTA Five Points station to announce findings of the report. Read the full story inside on page 5. Photo by Stan Washington.

If you think you are getting a bargain off of your favorite fast food restaurant’s value menu - look a little closer. What is not included in small print along with the caloric count is the extra cost you pay for being able to feed a family of four for less than $10.

Because of low salaries and lack of benefits among front line fast food workers, their use of public assistance programs is costing American taxpayers a staggering $7 billion every year concludes a study released Tuesday by the University of California, Berkeley.

The study gives a breakdown of each state’s costs and Georgia ranks sixth with an annual estimate cost to taxpayers of $297 million. California led all states with a yearly cost of $717 million followed by New York with $708 million.

“This is not just an issue for the workers but for the taxpayers who shouldn’t have to be subsidizing billion dollar corporations healthcare plans for their low paid workers,” said state Sen. Vincent Fort at an Atlanta news conference announcing the findings of the study.

“It’s an important issue here in Georgia because of so many workers on public assistance and the fact that the governor has declined to participate in Medicaid expansion so there is going to be even more workers who are going to need good healthcare and good wages to support their families,” Fort added.

“The taxpayer costs we discovered were staggering,” said Ken Jacobs, chair of UC Berkeley’s Center for Labor Research and Education and coauthor of the report “Fast Food, Poverty Wages: The Public cost of Low-Wage Jobs in the Fast-Food Industry”. “People who work in fast-food jobs are paid so little that having to rely on public assistance is the rule, rather than the exception, even for those working 40 hours or more a week.”

Fast food is a $200 billion-a-year industry. The median wage for core front-line workers at fast-food restaurants nationally is $8.69 an hour. Only 13 percent of the jobs provide health benefits.

Researchers concluded that the ten largest fast food companies in the U.S. Cost taxpayers an estimated $3.2 billion a year. McDonald’s with 707,850 workers and at the top of the list cost taxpayers and estimate $1.2 billion each year.

Rounding out the top ten are (2)Yumi Brands (Pizza Hut, Taco Bell and KFC) #3 Subway #4 Burger King #5 Wendy’s #6 Dunkin’ Donuts #7 Dairy Queen #8 Little Caesar’s #9 Sonic #10 Domino’s.

Fast food worker Tina McCoy decided that she needed to do more than just complain about low wages and became active in the movement that is spreading across the country. She said before she started working in the fast food industry three years ago she never had to use public assistance.

“I want to work, I want to stand on my own two feet but I can’t when my employer won’t allow me to do so. I rely on Medicaid and food stamps,” said McCoy, the mother of a four year-old daughter.