Study examines public cost of fast-food wages


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  • vern001 Castle Rock, CO
    Oct. 21, 2013 5:18 p.m.

    Instead of saying, "Hey, good for these folks for making an effort to work and be personally responsible," now we're criticizing them because they don't have good enough jobs, aren't going to school, aren't ambitious enough, etc. etc.?

    At what point do we stop judging others and just try helping them out?

    I am disgusted by the tone of most comments. There but for the Grace of God go most of us. I worked minimum jobs too when I was young, but I had the benefit of a great family who helped me go to school. I also had scholarships and took out loans to go to grad school. But university was a lot cheaper when I went to school and I got a job as soon as I graduated. Things are different today. And I wouldn't dare pass judgment on those from different backgrounds and without the blessings I had. I think it would behoove us all to show a bit more charity.

  • RedShirtMIT Cambridge, MA
    Oct. 21, 2013 12:44 p.m.

    To "bradz03" there is an even easier solution. Cut off the welfare to the people that think they can make a career out of a minimum wage job. Once the net is removed, they will seek out better paying employment or they will go hungry.

    The big question is why should we support people who choose to not develop skills that demand higher wages?

    If we cut off welfare for people trying to make careers out of minimum wage jobs, the Fast Food industry could return to its roots. Hiring Highschool kids and college kids.

  • Sasha Pachev Provo, UT
    Oct. 21, 2013 12:32 p.m.

    I say set the minimum wage at $50/hour. This would drive most fast food places out of business , the average diet will improve thus reducing the incidence of diabetes, cancer, and heart disease, and we will save billions in healthcare. Yes, and also set the minimum wage at $100/hour in all places that produce or sell alcohol or tobacco.

  • atl134 Salt Lake City, UT
    Oct. 21, 2013 11:05 a.m.

    "Allow supply and demand to remedy the situation without government interference. If government assistance wasn't supplementing the income of fast food workers, restaurants would have to increase wages or else they wouldn't have any workers. "

    Nope. There'd just be more people needing multiple jobs to get by and that means even higher demand for jobs so businesses can continue paying low amounts. This is pretty much how it works in every single third world nation.

    "You raise the minimum wage and these restaurants will no longer be able to afford them as workers, then what? "

    Actually it's been estimated that to raise McDonalds' wages to 15 an hour all they'd have to do is raise the cost of food 17%. Raising the minimum wage one dollar rather than 7 dollars (to get to 15) would mearly require increasing prices around 2-3% to pay for it.

  • wrz Phoenix, AZ
    Oct. 21, 2013 10:34 a.m.

    "What a ridiculous premise for a study and a story. Fast food jobs DO NOT cost taxpayers a dime."

    I think what the article is saying is that low wage earners, such as fast-food employees are eligible for food stamps and other government handouts. That's the cost to the government being addressed in the article.

    And this is what happens when the government gets its sticky fingers into economics... we move closer to socialism where the government is in the business of transferring money from the rich who prepared themselves well in their youth to the poor who diddled away their preparation years.

  • lost in DC West Jordan, UT
    Oct. 21, 2013 8:48 a.m.

    Single parents trying to raise kids on minimum wage are mostly women. Maybe they should get a commitment, like a ring on the left hand and a marriage license creating obligations BEFORE they engage in activities that create babies. Maybe the ally cats who impregnate these women should shoulder the responsibility of their actions. Personal responsibility! AAAGGGHHHH! That is anathema to liberals.

    Maybe if we didn’t facilitate them, but shamed them a little more, there would not be as many poor! Facilitating them damages them more than a short time shame (kick in the pants to get them going)

    actually in the 90s when there was a better economy, service jobs made up a smaller percentage of the available jobs, so the answer to your 1st question is a resounding YES!

  • lost in DC West Jordan, UT
    Oct. 21, 2013 8:46 a.m.

    The first requirement for a study from Berkeley is to determine what you want the outcome to be (liberal or radical liberal), then find data to support the predetermined outcome.

    If people want to get paid more, they need to make their time and services worth more. Too much emphasis is placed on how much less the get paid than what others get paid, and not enough emphasis is placed on the VALUE they provide for their time.

    If enough of these no-skill employees developed skills and found better compensated work elsewhere, the jobs would revert to entry level, part-time jobs for teenagers, OR the drop off in worker supply would force the employers to raise wages. (more likely the former).

    The public safety net facilitates low-income jobs. If people could not get by with fast-food wages and public assistance, they would improve their skills and get better jobs. Laws of self-preservation are powerful things.

  • DVD Taylorsville, 00
    Oct. 20, 2013 6:52 p.m.

    Minimum wage now is about 1/3 of the real value it was in the 1960s. There's a reason it's much harder now to use it to live. Pure market supply and demand without social intervention leads to situations like Bangladesh, where people work 12 hour days and starve anyway.

  • carman Wasatch Front, UT
    Oct. 20, 2013 12:28 p.m.

    What a ridiculous premise for a study and a story. Fast food jobs DO NOT cost taxpayers a dime. They provide income for low skill workers who otherwise would be earning even less (otherwise these workers would not be willing to work in these jobs).

    The real issues are 1) The lack of education and skills of many workers in our advanced, knowledge-based economy, and 2) poor economic conditions and slack in the job market.

    Requiring higher wages for "fast food" workers would only drive food inflation higher, reducing demand for fast food, and thus fewer jobs. The unintended consequence of wage price-setting would be to concentrate more money into the fewer hands that would get the jobs, exactly the opposite of what the left is trying to accomplish in "spreading the wealth".

    We need more education! (for both the writers of stories such as this, and for those who are stuck in low-skill jobs)

  • KDave Moab, UT
    Oct. 20, 2013 8:33 a.m.

    Many of those living on SS also get food stamps. So lets double SS payments. look at all the money the taxpayers would save. Right? Same difference.

  • jr85 United Kingdom , 00
    Oct. 19, 2013 5:13 p.m.

    The point I was making is that the fast food industry is misguided on what the effect would be with paying their entry level workers more. Studies show that the workers would actually spend more during and after work which is money back into the business (just like Fords theory of the more he paid his workers the more Ford cars they bought). Yes putting together cars would require more training (for some parts of the assembly line) but both working at Ford in the 1930's and McDonalds today both didn't require a college degree. Both had some form of in house training. I agree that costs wiould go up for fast food and other things if wages were raised but history has shown around the world that when low income earners have more buying power the more they spend and gets the economy ticking. A good economy needs people wo spend the most to spend. Businesses love it.

    Agree to disagree.

    Take care

  • Denverite Centennial, CO
    Oct. 19, 2013 3:32 p.m.

    @JR85 "Do what Henry Ford did back in the day. Paid twice the minimum wage and his company's [profits] exploded."

    You seem to be missing one key point here: AFAIK, Ford had to train his workers to put together cars, and then they were worth twice the minimum wage because of training. It was the training that made them worthwhile, not Ford's being an altruist.

    Tell me how much training is really needed for non-managers to work in fast food today, and then we can talk. Even 30 years ago when I worked in fast food, the system was set up to minimize training: put burger on griddle, push button to set timer, do something useful till buzzer sounds, flip burger, do something useful until second buzzer, burger's done. Even a 16-year-old could do it. Not much training needed ? Not much pay earned. Very little of that has changed since then.

  • jr85 United Kingdom , 00
    Oct. 19, 2013 10:15 a.m.

    I find ths discussion both fascinating and offensive. The argument that wages would be higher in a better economy I think is very flawed because of two reasons.
    1) In the roaring 90's did you have people getting paid higher wage because the economy/business were doing well? NO
    2) When companies are profitable do the profits (McDonalds and apparently $7 billion plus last year) flow down to low level employees? NO.

    No one is saying they should be paid the same as an engineer that is a nonsensical. How about them earning a decent living above the poverty line while they earn an education so that they can earn it with some dignity. Higher wages do mean ighest costs but it also means more spending and a stronger multiplier effect for the economy at large.

    Incentive? Do you really think fast food workers want to stay in their greasy clothes for the rest of their lives? Stop with the elitism and do what Henry Ford did back in the day. Paid twice the minimum wage and his company's profitably exploded.

    Good luck

  • Hamath Omaha, NE
    Oct. 19, 2013 5:58 a.m.

    I am SOOOO amazed that only 45% of them are on the lam. Must be a lot more teenagers out their working these jobs then I thought. Here in Omaha, there might be one out of a crew of 10 that is a teenager. The rest are adults. That is the truth at almost every fast food place.
    Either that or these fast food employees are really really smart with their money. But if that was the case, why would they be working at McDonalds or the like?

  • high school fan Huntington, UT
    Oct. 19, 2013 5:01 a.m.

    Education is easy to blame here, or lack thereof, but equally to blame is an absence of work ethics. Lots of these people simply are not motivated to do anything and I guess you blame us parents for not doing a better job. Out of my many children, only one has a low paying job and that one refuses to go on food stamps as she believes she can take care of her self. She is self motivated and has risen into management. She will be fine.

  • jim l West Jordan, UT
    Oct. 18, 2013 4:16 p.m.

    And what happens when we hire illegal immigrants? We school their kids, pay for their families health care, and on and on. And they are not even Americans and most don't want to be.

  • daveb Sandy, UT
    Oct. 18, 2013 3:57 p.m.

    Low wages are not the "cause" of public assistance expense. The real cause of the expense is that people who have an insufficient education to obtain higher paying jobs get stuck for life in low-wage jobs. They complain that the low-wage is their problem, but in reality the problem is that they are not qualified to obtain a higher paying position. Education is the answer, not forcing higher pay.

  • RSLfanalways West Valley, UT
    Oct. 18, 2013 3:40 p.m.

    Even if we increase wages which will increase fast food prices, I bet that government assistance will stay at the same level. So consumers will pay more for less. But it may help some over weight people from going out as much. But probably not.

  • tylert73 West Valley, UT
    Oct. 18, 2013 3:32 p.m.

    Schwa- Nope, not "poor-shaming," just reality. Blaming companies for paying low-skill wages to perform low-skill jobs is the reason our country is in trouble.

  • Schwa South Jordan, UT
    Oct. 18, 2013 3:05 p.m.

    Once again, DNews commenters go straight to the poor-shaming. I find it disgusting.

  • JPL South Jordan, UT
    Oct. 18, 2013 3:00 p.m.

    This is looking at the situation from the wrong angle. You raise the minimum wage and these restaurants will no longer be able to afford them as workers, then what? The proper way to gauge this situation is to look at what these people are earning and then you'll know how much less in public assistance they are getting BECAUSE they have a minimum wage job as opposed to NO job. I have owned and operated several restaurants, I know first hand, if you raise the minimum wage then the restaurant owners will have to raise their prices to be able to pay the higher wage, higher prices will mean fewer customers which in turn will mean fewer employees and fewer hours for those employees. These restaurant owners would only be able to employ about half the amount of people... which means half would lose their jobs. If the cost to the public is $7 Billion a year, how much would it cost if half these people earning minimum wage had no job at all? This study is crap!

  • derecha Central, UT
    Oct. 18, 2013 2:50 p.m.

    REALLY!!! How many fast food employees are there that actually make a living to support a family. Some of the managerial positions and a few others? But in reality, most people working in fast food are there as single individuals, students, or youth just trying to make a few bucks. Was this taken into consideration in the study? These are also very low skill jobs that anybody can perform with a few hours of training. Lets not start legislating this to the point that these kids are making as much as educated people that have been trained in a skilled career. I like the idea mentioned above about letting the free market dictate the wages and in some cities, that is the case, where they have to pay more than current minimum wage to attract employees.

  • Unsicker86 Layton, UT
    Oct. 18, 2013 1:55 p.m.

    The only thing that bugs me about this is,
    1 I pay my house payment, and have 2 kids and am a single dad.
    I was able to do this off the 9.00 an hour I made without and Government help.
    So why pay fast food workers $15 an hour when people that bust their butts to go to school and get an education to make that much are paying for everything themselves?
    I can see $10 tops, but come on let's not get greedy. Go to school and better yourselves.

  • robbyu SPANISH FORK, UT
    Oct. 18, 2013 12:46 p.m.

    The assertion that "The fast-food industry’s practice of paying low wages and providing few benefits is costing American taxpayers $7 billion a year in the form of public assistance" is a complete fallacy. The $7B cost which this article attributes to the likes of McDonalds and Subway are only costs to the taxpayers because at some point the US Congress and a US President passed laws which created public assistance and placed those costs on the backs of the taxpayers. The correct statement is the practice of the Federal Government of subsidizing living expenses of fast-food workers is costing American taxpayers $7 billion a year in the form of public assistance. Whether it is right for the government to do so is another debate.

  • WisCoug VERONA, WI
    Oct. 18, 2013 12:24 p.m.

    I am certainly no student of economics, but wouldn't raising minimum wage only adjust who pays this rather than make it go away?

    For example, raising minimum wage might mean fewer jobs at McDonald's as they move to a more automated (think self check-out) model and decrease the work force to keep prices relatively constant. The cost in salary lost by these individuals is picked up (at least initially) by individuals in more "skilled" areas (IT, hardware design, etc.) and costs stay more or less the same (as far as taxes/government spending is concerned), shifting from lots of people receiving help to fewer people receiving MORE help, but probably remains pretty much the same.

    Also, it is important to take in to account the franchise model of McDonald's to recognize that the CEO's salary is obscene but he is not the one that will take the hit if salary costs increase. Certainly those who "own" a McDonald's are not poor, but they are not so outrageously wealthy that we should lump them in with the CEO of a Fortune 500 company.

  • tylert73 West Valley, UT
    Oct. 18, 2013 12:23 p.m.

    Ya, blame fast food chains for their employees' lack of education or skills and a bad economy that prevents them from getting higher paying jobs. Sorry, low pay is the consequence for being a high school drop out, ex-con or someone with offensive tatoos and gaged ears. Obviously that isn't the case with all fast food employees, but if they are worth higher pay, then do a job worth higher pay. McDonalds shouldn't pay a civil engineer's wages to someone flipping burgers.

  • Breadth and Depth Salt Lake City, UT
    Oct. 18, 2013 12:01 p.m.

    Of course low paying jobs cost the taxpayers in social programs. These jobs include not only fast food jobs, but migrant farm labor as well. This same claim is asserted by opposition to amnesty for undocumented workers. The only difference is that when it is fast food workers it is taken seriously. How about using free market principles, in place of excessive, unnecessary, and unwanted federal intervention in civilian labor markets, to reduce the need for social programs by reducing the number of working poor through increased hourly wages via supply and demand principles?

  • bradz03 Orem, UT
    Oct. 18, 2013 11:58 a.m.

    The solution: Allow supply and demand to remedy the situation without government interference. If government assistance wasn't supplementing the income of fast food workers, restaurants would have to increase wages or else they wouldn't have any workers. This would lead to an increase in fast food prices so that the end user is primarily footing the cost as opposed to the taxpayer. It would also result in the big bosses taking home less for themselves in order to stay competitive, thus reducing the income discrepancy. Fast food consumption would likely go down with healthier options filling the void. Ultimately the system would balance itself out and we would be better off as a society for it.

    Moral of the story: By trying to fix the poor problem, the government is actually making it worse.

  • GaryA Cedar City, UT
    Oct. 18, 2013 11:54 a.m.

    Non-managerial fast-food jobs are meant to be entry-level, first-job experiences, NOT a career with the purpose of supporting a family. The problem is that “More of the workers are parents raising a child than teenagers living with parents", not that wages are too low.

    Study hard in high school, pursue a post-high school trade or profession and embark on a career that provides a living wage in exchange for you providing high-skilled value to your employer or society.

    I can understand a few breadwinners down on their luck working entry-level jobs and getting assistance while they work themselves into a better position, but this report shows far too many people making poor life choices and expecting a high school education (or less) to suffice in a high-tech twenty-first century economy.