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article imageMore than half of fast-food workers need public assistance

By Timothy Whitt     Oct 26, 2013 in Business
No longer are fast food workers the pimply faced kids seeking to earn some quick cash. Today many fast food restaurant workers are middle aged or retired adults seeking to survive financially.
The average fast food worker makes around $8.69 an hour which is above the minimum wage of $7.25 an hour but they usually work fewer than 40 hours a week. It is hard for many of these workers to survive from paycheck to paycheck. For about fifty two percent of fast food workers the only recourse is to supplement their income with food stamps, Medicaid and tax credits.
The report "Fast Food, Poverty Wages" co-authored by Ken Jacobs found, low wages, combined with part-time hours and lack of health care benefits, creates demand for public assistance including $3.9 billion per year in Medicaid and Children's Health Insurance Program (CHIP) benefits. Add on another billion for the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamp assistance. Earned Income Tax Credit payments (a subsidy to low-wage workers) amount to about $1.95 billion per year.
Fast food restaurant employees are not the only workers who are struggling to survive on low wages. Workers in the retail world, car washes, and other low paying jobs are also struggling with low wages and insufficient hours. Added to the problem is the additional cost of finding their own insurance.
With the inception of Obamacare many companies have cut back on the number of hours allotted to part time workers because they do not want their employees to work more than 30 hours a week and qualify for full-time medical insurance under the ACA.
Some argue for raising the minimum wage to around $15.00 an hour to help ease the burden of the working poor but some analysts like Michael Strain, a resident scholar at the American Enterprise Institute, "I don't think raising the minimum wage to $15 an hour would solve that problem."
He goes on to say,"raising wages to that level would have unintended consequences: Namely, fast-food companies would slow down their hiring. And this would lead to more workers looking for jobs — and potentially needing to rely on more public assistance."
Ken Jacobs disagrees he says, "it's possible that employers may see a small decline in profits, but when wages are raised, "you do find a significant decline in turnover [of workers], which is cost-saving for employers."
The solution to getting low paid workers off of public aid may be as simple as raising the minimum wage but it may also create a whole new set of problems. Until solution to help low paying workers is found one thing is sure taxpayers will be forced to keep footing the bill.
More about Public assistance, Welfare, Fast food, Mcdonalds
 
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