Report: Burger King workers collecting more than $300M in public assistance

10/15/2013 4:19 PM

10/15/2013 6:45 PM

Taxpayers spend about $355 million each year subsidizing Burger King’s low-wage workers, according to a new report critical of the nation’s fast-food chains for their indirect reliance on public assistance programs.

A pair of studies released Tuesday estimate about half of all fast-food employees in non-management positions receive federal assistance because they aren’t paid enough to provide for themselves. Miami-based Burger King, with a workforce of about 210,000 people, finished fourth when chains were ranked by the estimated amount of public assistance their employees receive. McDonald’s finished first at $1.2 billion a year.

The assistance numbers come from the labor-backed National Employment Law Project, which advocates for higher minimum-wage laws nationwide, and from an academic study released in conjunction with NELP’s report. They’re based on estimates of how many fast-food workers would be earning a wage that, depending on the number of children at home, would qualify them for various federal assistance programs.

Pro-business groups have questioned similar studies as mostly providing political ammunition in the minimum-wage wars. They argue that forcing business to pay higher wages will end up hurting the working poor more by cutting back on hiring opportunities, and rob them of the chance to move up the pay ladder at places like Burger King.

“Taxpayers do have a choice,’’ Michael Saltsman, research director at the Employment Policies Institute, said in a statement criticizing the studies by NELP and economists at UC Berkeley and the University of Chicago. “They can either provide partial support to less-skilled employees who have difficulty finding employment at higher wage rates, or they can provide a 100 percent subsidy when these employees lose their jobs due to an unrealistic wage mandate.”

In a statement from its corporate headquarters on Blue Lagoon Drive, Burger King did not address the studies directly but said in part: “For decades, Burger King restaurants have provided an entry point into the workforce for millions of Americans, including many of the system's franchisees who began their careers working at local Burger King restaurants.”

The studies use federal data on occupational wages showing the typical fast-food worker in an entry-level position makes less than $9 an hour. Given the pay, the researchers estimate 20 percent of fast-food workers live in families below the poverty level, compared to 5 percent of the workforce overall. The study also concluded that children and students make up only 30 percent of the fast-food workers in entry-level positions, while 33 percent have children themselves. In all, the report estimated fast-food workers collect about $7 billion a year from Medicaid, food stamps, the Earned Income Tax Benefit, and other programs.

“Even full-time wages are not enough to compensate for low wages,’’ the report stated. “The families of more than half of the fast-food workers employed 40 or more hours per week are enrolled in public assistance programs.”

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