Study: Fast-food workers rely on $7 billion in aid

A report by UC Berkeley and the University of Illinois at Urbana-Champaign staffers comes on the heels of a fast-food staff walkout in August over low pay. A report by UC Berkeley and the University of Illinois at Urbana-Champaign staffers comes on the heels of a fast-food staff walkout in August over low pay. Photo: Sam Wolson, Special To The Chronicle Photo: Sam Wolson, Special To The Chronicle Image 1 of / 3 Caption Close Study: Fast-food workers rely on $7 billion in aid 1 / 3 Back to Gallery

The low wages paid to fast-food workers are costing taxpayers $7 billion a year in public assistance, according to a study released Tuesday by the UC Berkeley Labor Center.

Full-time workers at such places as McDonald's and Burger King don't make enough to support themselves, forcing them to enroll in welfare programs such as food stamps and Medicaid, the report shows. People working in fast-food jobs are more likely to live in or near poverty than any other job sector, with 43 percent having an income two times below the federal poverty level or less. In California alone, researchers estimate that low-paid fast-food workers are costing taxpayers $717 million a year in state and federal assistance.

The report, "Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast Food Industry" was co-written with the University of Illinois at Urbana-Champaign's department of urban and regional planning. The study's release, and a companion report by the National Employment Law Project, comes after thousands of fast-food workers in 60 cities walked off their jobs in August, demanding higher pay. The study also comes at a time when Republicans in Congress are trying to cut government assistance such as food stamps.

Despite the perception that most employees at fast-food drive-throughs are high school and college kids, 26 percent are single and married adults with children, said Marc Doussard, one of the authors of the study.

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Willietta Dukes, 40, has been working in fast-food restaurants since she was 26 years old. But she said she couldn't have raised her two sons without welfare programs.

"Why should I have to rely on government assistance when I work as hard as anyone else?" Dukes, who earns $7.85 an hour at a Burger King in Durham, N.C., asked during a national press conference call. "Why shouldn't I be paid what I'm worth? We're the people making the restaurant." She said there are times she has to forgo buying medicine because she can't afford it.

The study found that 52 percent of the families of fast-food workers are enrolled in one or more public assistance programs, compared with 25 percent of the workforce as a whole. These families account for $3.9 billion a year in Medicaid and Children's Health Insurance Program spending, and are receiving on average $1.04 billion in food stamp benefits, according to the researchers.

The Employment Policies Institute, a nonprofit group that argues that increasing the minimum wage increases unemployment for the non-educated and non-skilled, accused the researchers of being shills for labor unions.

"In its quest to unionize the fast food industry, the (Service Employees International Union) has demonstrated that it will leave no stone unturned, including using research and arguments that would get a higher grade in creative writing than in a high school economics class," wrote Michael Saltsman, research director at the institute, in a press release.

The UC Berkeley authors of the study called the allegations "odd."

"I'm an economist," Sylvia Allegretto said. "This is what I do for a living."

Devonte Yates, 21 and a McDonald's worker in Milwaukee, doesn't care what the motivation for the report is. All he knows is that he can't make it on his $7.25-an-hour earnings.

"I rely on food stamps to eat at night," he said. "The CEO of McDonald's makes more in a day than I make in a year. We work hard, show up every day and are dedicated to these companies. Why shouldn't we be paid a living wage?"