The Real Cost of Fast Food

As the nation debates the low wages of fast-food workers, the University of California, Berkeley Labor Center has released a report entitled Fast Food, Poverty Wages, which reveals the cost of public benefits programs for fast-food employees. The paper discusses how the low wages, low work hours, and limited employer-provided benefits leave over half of fast-food workers with little choice but to rely on government assistance programs to get by.

According to the Berkeley Labor Center analysis, fast-food workers earn a median income of $11,056 per year. Many earn only the federal minimum wage of $7.25 per hour and must get by on part-time work hours. Yet, even at full-time hours, fast-food wages are not enough to provide families with food, shelter, transportation, and other basic necessities.

The study finds that working families make up 73 percent of public benefit program enrollments and account for 63 percent of program costs. The report identifies the four main programs that provide assistance to eligible low-income individuals and families: health insurance, the Federal Earned Income Tax Credit, food stamps (now called SNAP), and basic household income assistance.

figure 1: Participation in Public Programs
Source: Fast Food, Poverty Wages

More than half of fast-food workers and their families are enrolled in at least one public program, twice the rate of the rest of the workforce. While nearly 60 percent of the workforce receives employer-provided health benefits, only 13 percent of fast-food workers are covered. Fast-food employees lack the wages and benefits to live without government assistance.