For many restaurant employees, having a full-time job doesn't mean they can make ends meet. Not only do 40 percent of fast food workers live in poverty, a new study by the Berkeley Center for Labor Research and Education shows that nearly 52 percent of all fast food workers are dependent upon public assistance programs such as food stamps, Medicaid, and child care subsidies. The report adds that some states like California and New York spend over $3 billion on public assistance a year.
Co-author Ken Jacobs notes that "when companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs... this creates significant cost to the state. It also creates a significant cost to tax payers, who shell out just under $153 billion dollars each year to help fund these public assistance programs. McDonald's employees cost the federal government and tax payers over $1.2 billion alone. Essentially, writes the New York Times, tax payers are giving large companies that pay low wages, such as McDonald's, "huge subsidies." Tax payers are picking up the difference "between what employers pay and what is required to cover what most Americans consider essential living costs. The study notes that this is "the hidden cost of low-wage work."
The New York Times notes that the strikes for higher wages, and the growing number of states that have increased, or plan to increase the minimum wage will help "recover public funds from employers of low-wage workers." Researchers add that "raising wages would result in significant savings to state and federal governments." Some states are even going so far as to require employers to pay a fee to the state for each employee that earns less than $15 per hour. Others will publish the names of employers who have more than 100 employees receiving Medicaid, and how much that costs the state.
While employers are starting to increase the salaries of their employees — McDonald's announced that it is giving a dollar per hour raise to a certain subset of its workers — they are still trying to fight minimum wage increases in court.