Fast Food Workers and Public Assistance

John Krautzel
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Most fast-food restaurant owners, managers, and workers understand the tight balancing line between fast-food wages and fast-food prices. Customers visiting fast-food restaurants typically want their food as quickly and inexpensively as possible, which may leave many owners, especially of franchise chains where pricing may be less fluid, keeping fast-food wages as low as possible to keep all workers employed. Cutting too many workers to raise wages could result in slow service, and raising menu prices may not be viable in some markets. This leads to a large number of employees turning to public assistance to help supplement their fast-food wages.

A large movement against low wages in retail stores, including fast-food wages, sprung up around Black Friday of last year. Retail workers and fast-food employees picketed outside of major retail locations in hopes of generating increased awareness of this issue. The busiest time of the year for retail is traditionally viewed as a time of compassion and giving by many Americans, and the events were scheduled on a day when many stores celebrate hefty fourth-quarter profits.

Even America's congressional leaders are taking up the issue of fast-food wages by reviewing federal minimum wage policies. The current minimum wage at the federal level is $7.25 per hour, with some states enacting higher minimums. One bill aimed at raising the minimum wage looks to move it to $10.10 per hour. Many fast-food and retail workers have requested raises to $15 per hour or more. This wage may make it very difficult for store owners to match the cost and speed-of-delivery expectations of the fast-food market with associated labor costs.

American citizens may not realize that they already subsidize low wages. The National Employment Law Project found that the low fast-food wages of the ten top employers in that market costs taxpayers $3.8 billion in public assistance funding each year. That means that funds that could be going to other projects are subsidizing fast-food employees to help them make ends meet.

There is no clear-cut answer to the problem. A dramatic increase in the cost of labor is likely to affect delivery times and cut down on the number of customers willing to shop at fast-food locations. Fast-food managers may need to lay off employees to reduce the impact on location prices, and store owners may be stuck with a combination of labor costs and franchise fees that leave business a difficult, if not outright untenable, position. Fast-food wages are a major problem across the nation that may well sink the industry in America if a compromise cannot be found.


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