Half Of Frontline Fast-Food Workers Rely On Public Assistance, Study Says

Taxpayers pick up a $7 billion tab each year for workers, study finds.

Zac Mueller Photo of Carmam Iverson



Roughly a year and a half ago, 29-year old Carmam Iverson entered the workforce after having spent her 20's as a stay-at-home mother for her four children. She has yet to complete high school, but would one day like to finish school so she can work as a pharmacy technician. In the interim, Iverson (pictured above) was able to land a crew job with McDonald's in Kansas City, Mo., working as a cashier and prepping food. She makes $7.35 an hour, putting in an average of 27 hours a week. As a part-time worker, she gets no benefits from McDonald's.

An so Iverson must rely on public assistance. She currently makes use of food stamps and is on the waiting list for section 8 public housing. She recently moved out of her house and moved in with her sister. (Her children and their father live with his mother.)

In speaking to AOL Jobs, she explained her struggle with meeting even the most basic needs. "I always have to pick between something -- pick between which meal I can eat, or pick between paying for housing needs or food," she said.

Needing public assistance
Iverson is hardly alone. In fact, more than half (52 percent) of front-line fast-food workers must rely on public assistance programs to help their families get by, according to a study released Tuesday by the University of California, Berkeley. The data was culled from information provided by the U.S. Census Bureau. The workers' average salary of roughly $8 to $9 an hour is not enough to prevent them from relying on food stamps, public housing or other forms of assistance. And so as a consequence taxpayers end up paying nearly $7 billion a year to fund the programming, the report found. Comparatively, the fast food sector generates sales of $200 billion a year. And crucially the largest publicly traded fast food companies walked away with $7.4 billion in profits last year.

A companion report from the progressive National Employment Law Project broke down the cost of assistance taxpayers pay per company:

1. McDonald's ($1.2 billion)
2. Yum! Brands (Pizza Hut, Taco Bell, KFC) ($648 million)
3. Subway ($436 million)
4. Burger King ($356 million)
5. Wendy's ($278 million)

The twin reports are being promoted by the progressive Washington DC-based public relations firm, BerlinRosen.

Industry response
In an e-mailed statement to AOL Jobs, Scott DeFife, an executive vice president for the industry trade group, the National Restaurant Association, said the data provided by the study was flawed. For starters, he noted, considering the Earned Income Tax Credit program as a form of "assistance" was incorrect, given that the program is technically a credit. The studies "use a very narrow lens and selective data to attack the industry," he also wrote. He added that 40 percent of line staff workers in restaurants are students.

"The fact is that McDonald's and our independent franchisees provide jobs in every state to hundreds of thousands of people across the country," McDonald's spokeswoman Lisa McComb said by e-mail. "Those jobs range from entry-level part-time to full-time, and we offer everyone the same opportunity for advancement."

A growing movement
The release of the reports are the latest public relations gambit being made by advocates of fast food workers since they launched their campaign to improve conditions for the sector's workers 11 months ago. Groups including local community organizations with some backed by the Service Employees International Union (SEIU) have organized walkouts among fast food workers throughout the country starting in November of last year, as AOL Jobs reported.

In August, the fast food workers saw their biggest day of action yet when thousands of workers walked out of their job in about 60 cities, as AOL Jobs reported. That event was scheduled to also mark the 50th anniversary of Dr. Martin Luther King Jr.'s March on Washington for Jobs and Freedom, at which he delivered his "I Have A Dream" speech.

The workers and their advocates are making a list of demands, chief among them is the doubling of the minimum wage to $15 an hour. (The federal minimum wage currently stands at $7.25 an hour.)

Yet commentators including Michael Saltsman, the research director at the right-leaning Employment Policies Institute, say the current pay model is the only viable option. "When you have customers demanding low costs, ideas like raising the minimum wage to $15 an hour, will not be sustainable. And then all these workers will lose the jobs they have," he told AOL Jobs.

The new activism on behalf fast food workers, advocates say, is being motivated by the changing demographics in the sector. These are no longer gigs for high school students looking to add a few extra dollars to their weekly allowance. In fact, as AOL Jobs has reported, the median age of a fast food worker today is 28.

And so workers like Iverson are requiring more than the roughly $250 a week she makes at McDonald's to get by. Her need to rely on the government forces others to miss out, she said. "That money should be used to help our overcrowded schools," she added.

This post was updated on Oct. 15 at 2:15 PM Eastern Time with statements from McDonald's and the National Restaurant Association.

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flying high

TypeI really do feel for the people that have to live with that salarey but the fact is the jobs was for teens to have spending money and to learn work abilities and to be on time for a job. it is a sad thing that stores are laying off employees and asking us to check our selves out at the stores, pump our own gas air our own tires and no cut in the prices of the product we purchase. Computers have taken over so many off our jobs we the American people are having to do the jobs of teens and put people out of work by checking our selves out at the store and if a item is marked down but scans full price you get tired of wating for an adjustment you just pay the full price. We also have so darn many illegals in the country there is not enough jobs for the people here leagelly. I am a sixed generation American on both side and am very tired of the others being put before us.

your comment here

November 09 2013 at 3:28 PM Report abuse rate up rate down Reply
chapython

The fast food industry is not the cause of her getting taxpayer dollars. Her choices - having babies that she could not afford, i guess her reasoning after the first was the more I have the more $$$ she could get. Then she wants to stay home on her sitting down spot - probably fat too. I guess she has not missed too many meals.

Another way to look at this situation is - bless the fast food companies so that a person with no skills, no education and a poor decision maker has someplace where she can earn a few bucks to help out with her welfare payments.

October 16 2013 at 11:41 PM Report abuse rate up rate down Reply
Roy

what did she think would happen ?
she dropped out of school..
no skills other than having more babies she cant afford.
all of her misery is self inflicted...
she is the victim of her own poor life choices...

yes i know that is hard...but...
it is also true

October 16 2013 at 7:10 PM Report abuse +4 rate up rate down Reply
lester

MY MAIN QUESTION IS WHERE IS THE FATHER AND WHY ISNT HE HELPING? I KNOW A 24 YEAR OLD WHO HAS 4 KIDS WORKS PART TIME,YES SHE GET FOOD STAMPS AND LIVES ININ A LOW INCOME APRTMENT.SHES DONE EVERYTHING SHE CAN DO TO GET CHILD SUPPORT BUT THE FATHER WORKS JUST ENOUGH TO STAY OUT OF JAIL THEN QUITS.MY POINT IS SHE HAS DONE THIS ON HER OWN AND IS TRYING TO GET A FULL TIME JOB,AND SHE GOT HER GED. THIS LADY MAY HAVE BEEN A STAY AT HOME MOM BUT IT SEEMS LIKE SHE LACK IN ANY PLANNING SKILLS.I KNOW PLENTY OF MOTHERS WHO HAVE GONE BACK TO SCHOOL TO GET THE GED

October 16 2013 at 7:03 PM Report abuse +1 rate up rate down Reply
1 reply to lester's comment
chapython

She does not even have a high school degree yet. Probably flunked the GED

October 16 2013 at 11:44 PM Report abuse rate up rate down Reply
Roy

http://www.opensecrets.org/lobby/indusclient.php?id=N01&year=2010#clients

here is why these co's cant pay their employees...
they are too busy lobbying the gov.
the question is ....why?

October 16 2013 at 6:56 PM Report abuse rate up rate down Reply
xfk

Why 4 kids? Shes never had money and never will.

October 16 2013 at 6:33 PM Report abuse +3 rate up rate down Reply
td145

We are paying for a lot of stupids. The more they open the more we pay. It is a way of life for many.

October 16 2013 at 6:21 PM Report abuse +2 rate up rate down Reply
gjterranov

There are a lot of reasons someone can't get along on the current minimum wage of $250.00 a week ($13,000 a year). The current cost f living - food, utilities, rent , gasoline etct. - is a major reason.

Take just one of these items, gasoline. Currently gasoline is about $3.50 a gallon. Rewmember about 7 years go when it was about $1.85 a gallon? Why the huge increase? Again many reasons, but the actions of the boy president is certainly a factor. Obama has borrowed trillions of dollars from the Federal Reserve Banks - PRIVATE banks.

Where doesa thesae private banks get the money to lend, at interest, to the government? They just print it from thin air! FOLKS< THAT'S FUNNY MONEY, worth about as much as the "money" used in the game of Monopoly.And that makes each and every dollar worth less and less.

Granted that that's not the only reason for the massive increase in the cost of gasoline and other products, but it is a major factor.

AS long as Obama keeps the Federal Reserve Banks printing this funny money, we will see thje cost of gasoline and everything else continue to go up and up. Stated another way, the funny money will be worth less and less.

So ONE way to stop this constant devaluation of our money is to stop letting the Federal Reserve Banks from printing money out of thin air. Our money should be printed and controlled by the government, NOT by private banks. JFK started to do this before he was assassinated.





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October 16 2013 at 6:15 PM Report abuse +1 rate up rate down Reply
dnkdltn

It was the same way back in the 1960's. As minimum wages increased; so did other wages and everything else.
No different today as it was back then; except everyone is making more moneythan back then. Buying power of the money is still about the same.

October 16 2013 at 5:58 PM Report abuse rate up rate down Reply
matamargo

The story could just as easily said - Taxpayers saved a lot of money by people getting a fast food job that reduced their needs for public assistance. Would we want to automate the fast food industry more so that they reduce more jobs?
Business decisions are based on cost vs revenue and the different factors that go into their levels. The more that human labor cost, the easier it becomes to rationalize the expenditure to automate the process more. The option to raise the cost of the item sold is dependent on how competitors respond to the pressure from each cost factor. The more we push for all jobs to pay a higher wage, the more the cost of living goes up or the more automated processes become, with attendant job loss and thus more unemployed and people needing assistance.

October 16 2013 at 5:39 PM Report abuse +1 rate up rate down Reply

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