More than half of CA’s fast food workers on public aid

By | October 15, 2013 |

Peter_Speaks

Photo credit: Interfaith Committee for Worker Justice of San Diego County

Today, CPI’s Research Director Peter Brownell spoke at the Fight For 15 Press Conference. Here is his speech:

CPI works on issues which affect low wage workers and their families. Our recent report on poverty and earnings in San Diego County found that of the 15 largest broad industry categories, the “Accommodations and Food Service” industry had the lowest annual earnings. And within “Accommodations and Food Service,” as you might imagine, the fast food restaurants are at the bottom of the bottom. In fact, according to the most recent estimates from the California Employment Development Department, the average earnings of employees of San Diego County’s “limited service” (i.e, fast food) restaurants was only $300 per week. That works out to $15,600 for year-round work.

How do fast food workers get by on so little?

Well, a majority have to rely on public benefits to make ends meet.

We are here today because the UC Berkeley Institute for Industrial Relations and the University of Illinois at Urbana-Champaign have released a report detailing the cost to taxpayers to make up the difference between what fast food employers pay and what their employees need to survive.

The report examines the costs to the public of providing Food Stamps, Earned Income Tax Credits, Temporary Assistance for Needy Families (TANF), and public health insurance programs to fast food workers and their families. The researchers found that the total national cost of providing these program’s benefits to fast food employees is $6.99 billion annually. Fifty-two percent of fast food employees participate in one of more of these need-based benefit programs, compared to only 25% across all industries.

The report also details the costs at the state level. Here in California, the total annual cost of providing these public benefits to low-paid fast food workers is $717 million. And mirroring the national share, 52% of California’s 227,000 fast food workers receive benefits from one or more of these public programs.

Now there is no doubt that these low-paid employees need this assistance to make ends meet. As I mentioned earlier, in San Diego County the average weekly earnings for these employees are only $300. But the reality is that fast food companies can afford to pay every dollar that taxpayers are currently paying to support their employees and still turn a profit.

The National Employment Law Project released a data brief based on the UC Berkeley and University of Illinois study, estimating that the 10 largest fast food companies in the US accounted for $3.8 billion annually in taxpayer-funded need-based benefits to employees. Yet, these same 10 companies reported total profits in 2012 of $7.4 billion. They made nearly twice as much in profits as the public paid to support their employees. They could have paid every cent that taxpayer paid to support their employees and still made $3.6 billion in profit.

Fast food workers need to earn enough to support themselves and their families, but it should be their employers, not the taxpayers, that foot the bill. The Center on Policy Initiatives believes that fast food corporations should pay their fair share, and that means paying their employees a living wage.