National Edition

Study examines public cost of fast-food wages

Published: Monday, Oct. 21 2013 7:27 a.m. MDT

“Substantial public costs are driven by a relatively small number of large corporate chains,” said Jack Temple, the report’s author. “Companies operate on a business model that leaves workers unable to afford basic necessities and leaves taxpayers on the hook, but CEOs with billions. Low-wage fast-food jobs are expensive for all of us, whether or not you work in fast food or eat fast food.”

The report found that, for example, McDonald’s made up the largest chunk of cost to taxpayers at $1.2 billion. But in 2012, McDonald’s realized profits of $5.46 billion and paid its CEO, Donald Thompson, $13.7 million.

Devonte Yates, 21, who works 40 hours a week at a McDonald’s in Milwaukee, said that he doesn’t like having to rely on food stamps, but he has to to support his family. “The CEO makes more in a day than I do in a year,” Yates added. “If they paid workers more, we wouldn’t have to rely on public assistance. Taxpayers are picking up the slack where these companies are leaving off.”

It is unlikely the growing tension over worker pay is going away anytime soon, as the service industry is one of the fastest-growing industries in America, according to Sylvia Allegretto, co-author of the Berkeley/Illinois study. David Autor, an economist at MIT, found in a 2012 study that the share of the labor force in service occupations grew by 30 percent between 1980 and 2005 after having been flat or declining in the three prior decades.

“Corporate profits are at their highest and soaring and wages have stalled,” said Allegretto. “(The fast-food industry) is a small slice of a much bigger problem.”

Email: dmerling@deseretnews.com

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