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Low-Paying Fast-Food Jobs Cost Taxpayers Big Bucks

Here's a new wrinkle on the debate over what constitutes a reasonable wage for fast food workers: New research from the University of California at Berkeley indicates that the fast food industry costs American taxpayers $7 billion annually, thanks to the fact that 52 percent of fast food workers are forced to rely in part on public assistance.

fast food strike 

(Photo Credit: The All-Nite Images/Flickr)

"The taxpayer costs we discovered were staggering," says report co-author Ken Jacobs, chair of UC Berkeley's Center for Labor Research and Education. "People who work in fast-food jobs are paid so little that having to rely on public assistance is the rule, rather than the exception, even for those working 40 hours or more a week."

The median pay for all fast food workers is $16,125 a year, or just above poverty level for a family of two.

Among their other findings:

  • One in five families with a member who works in the fast-food industry lives below poverty level.
  • The five states with the highest costs to taxpayers were California ($717 million), New York ($708 million), Texas ($556 million), Illinois ($368 million), and Florida ($348 million).
  • The programs fast food workers rely on to supplement their poverty-level wages include Medicaid and the Children’s Health Insurance Program ($3.9 billion per year), Earned Income Tax Credit payments ($1.95 billion per year), The Supplemental Nutrition Assistance Program ($1.04 billion per year), and Temporary Assistance for Needy Families ($82 million per year).

Although part-time hours are part of the picture, even full-time work didn't guarantee being able to afford the costs of day-to-day life. More than half of fast-food workers working full-time (40 hours or more per week) are enrolled in public assistance programs, according to researchers.

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