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Taxpayers Pay an Estimated $250M a Year to Subsidize Andy Puzder's Employees

Trump’s Labor Secretary nominee is facing increased scrutiny

Trump’s Labor Secretary nominee, CKE Restaurants CEO Andy Puzder, is facing increased scrutiny as his confirmation hearing nears: Carl’s Jr. and Hardee’s employees collect an estimated $250 million from American taxpayer-funded safety net programs such as food stamps (SNAP) and Medicaid each year, according to a new data briefing from the National Employment Law Project (NELP).

That amount is what it takes “to offset poverty wages and keep its low-wage frontline workers and their families from economic disaster,” the report says. Of course, Hardee’s and Carl’s Jr. aren’t unique in this: A 2015 study by the Berkeley Center for Labor Research and Education indicated that more than 50 percent of all fast-food workers rely on public assistance programs such as SNAP benefits, Medicaid, or child care subsidies.

But the study further underscores just how troubling it is that Trump has nominated a fast-food CEO to head up the Department of Labor: Puzder, and other fast-food executives like him, are personally earning millions of dollars each year on the backs of low-wage food service workers. And in the greatest irony of all, these workers depend on the very social programs — Medicare, SNAP — that many Republicans, including Puzder, want to gut under the Trump administration.

Puzder has also been vocal about opposing employer-provided healthcare and paid sick leave, which, as NELP notes, are “precisely the kinds of worker protections one might expect the U.S. secretary of labor to safeguard” for American workers.

NELP’s $247 million figure is just an estimate, which it pieced together using Puzder’s own statements about how many employees CKE has, and a 2013 study from UC Berkeley on the average public cost per employee in the fast-food industry (which, adjusted for inflation, they say is approximately $3,500 per year).

CKE, which is a privately held company, does not disclose data on how many employees it has, what it pays them, or even how many restaurants it has. Anastasia Christman, a senior policy analyst at the NELP who wrote the data briefing, agrees that CKE should release details on its business in light of Puzder’s nomination, but doubts it will.

“These are important positions and I think it’s critical that before senators vote on confirmation, we understand where people fall on the basic premises behind these agencies. For the Department of Labor, that’s working conditions, job quality, and the ability for people to be able to advance through work. The basis on which he has been nominated is his success in running this business, but we don’t know anything about this business.”

As Eater’s Ryan Sutton pointed out last month, while Carl’s Jr. and Hardee’s actually have a better track record as far as wage violations go than many other big fast-food chains, they’ve still been busted for breaking the law that governs how American workers are paid. Regardless, as Sutton writes, “nominating as Secretary of Labor an executive from a company whose stores fail to comply with some of the country’s most basic labor laws seems, well, maybe not a great idea?”

Puzder has also publicly expressed what seems like a general disdain for low-wage workers in the past: In a 2011 speech at a university, the CEO said, “It's not like if you run a fast-food company you're hiring graduates of MIT or people that were gonna go work for Microsoft, you know. In the employment pool, you're hiring the best of the worst. You know, it's kind of the bottom of the pool.” He’s also mentioned wanting to open an automated restaurant free of human workers because "they're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case.”

Reached for comment, a CKE spokesperson says the company “does not comment on employee personal matters of this kind.” However, they did say that “of the 6,176 current company-owned restaurant employees, only 115 are at the minimum wage. Also, CKE typically reviews those at minimum wage starting within three months of employment.”

The Senate hearing on Puzder’s confirmation is set for February 2.

How the Public Subsidizes Puzder’s Fast-Food Operations [NELP]
How Puzder’s Industry Sticks Taxpayers With Cost of Supporting Workers [LA Times]
More Labor Coverage [E]

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