McDonalds, Taco Bell as Welfare Queens: Over Half Their Workers Use Public Assistance

[BelgianMadCow]

Like Walmart, the fast food industry has taxpayers as a silent partner. But sadly, we don’t get shares or dividends.

The National Employment Law Center has been publishing reports on how the rock-bottom wages paid to fast food workers force them to rely on public assistance. The NELC released two new documents yesterday that drill further into the issue. Here’s an overview from the Washington Post:

Taxpayers are spending nearly $7 billion a year to supplement the wages of fast-food workers, even as the leading fast-food companies earn billions of dollars in annual profits, according to a pair of reports released Tuesday.
...
Even among the 28 percent of fast-food workers who were on the job 40 hours a week, the report said, more than half relied on the federal safety net to get by.

Much more at Naked Capitalism.

[DirkGently]

1. ++ An excellent point that bears repeating. n/t

[hfojvt]

2. I think it is bullsh*t to equate the EIC with public assistance

Further, just because somebody collects an EIC that they qualify for, does not mean that they 'rely' on it.

[PotatoChip]

3. Strawman argument. But ok, even if EIC is removed from the equation,

-that still leaves fast food employees in need of nearly 5 Billion a year in public assistance. And yes, they do 'rely' on it. Not through any fault of their own, but because their employer obviously does not pay them enough.

Taxpayers are spending nearly $7 billion a year to supplement the wages of fast-food workers, even as the leading fast-food companies earn billions of dollars in annual profits, according to a pair of reports released Tuesday.

More than half of the nation’s 1.8 million “core” fast-food workers rely on the federal safety net to make ends meet, the reports said. Together, they collect nearly $1.9 billion through the earned income tax credit, $1 billion in food stamps and $3.9 billion through Medicaid and the Children’s Health Insurance Program, according to a report by economists at the University of California at Berkeley’s Labor Center and the University of Illinois

[hfojvt]

5. strawman?

It is a FACT that EIC is included in the total. Thus no straw was used in the manufacture of that argument, criticizing the inclusion of the EIC in the total.

I have collected an EIC myself in many years. For examples

In 2002, when my wage income was $10,198.29, I got an EIC of $68
In 2007, when my wage income was $10,640, I got an EIC of $158
In 2008, when my wage income was $11,968.74, I got an EIC of $69
In 2010, when my wage income was $13,130.28, I got an EIC of $26

Those are tax refunds for which I qualify - not hand outs, any more than the IRA deductions that I took in order to reduce my tax burden were hand outs.

In 2002, I put $2,659.10 in my IRA, reducing my federal taxes by $266 (actually reduced it by more after I filed a 1040-X to get back the $229 I paid because I did not know that I qualified for line 50, the Retirement savings Contributions Credit)
In 2007, I put $500 in my IRA, reducing my federal taxes by $229.
In 2008, I put $920 in my IRA, reducing my federal taxes by $280
In 2010, I put $502 in my IRA and $1,000 in a Roth IRA, reducing my taxes by $490.

I qualify for those credits, I do NOT "RELY" on that money. It's too small to rely on anyway. The only effect it has is to increase my net worth from perhaps $105,000 to perhaps $110,000. Not insignificant, but not really life-altering either.

Further, the IRA deduction provides far more in tax benefits to the upper classes than it does to the lower. Who can afford to put the legal limit of $10,000 per couple (more if they, like me, are over 50) in their IRA and thus not only save on federal and state income taxes, but also save for their retirement? A couple making less than $40,000 a year, or a couple making more than $100,000 a year?

You don't have to guess at an answer, since I already looked it up. http://journals.democraticunderground.com/hfojvt/102

Let's see, 577,000 tax filers with over $500,000 (and less than $1,000,000) in income times 28% (using an IRA deduction) times $9,000 (average amount of deduction) times tax rate of 35% = $500 million in benefits going to people making over $500,000 per year. If I had data (or wanted to look it up (even assuming the data is back on line after the government shut down)) for the 17 million people with incomes over $100,000 and less than $500,000 I bet it dwarfs the $1.9 billion in EIC. Here's a rough guess 17 million times 20% (using the deduction) times $6,000 (average deduction) times 28% (tax rate) = $5.7 billion.

And that leaves out the value of the tax-sheltered earnings of the account. $40,000 in an IRA making 5% return = $2,000 in tax sheltered income.

Bottom line - given the tax credits and deductions available to upper income folks, it is insulting to equate tax deductions for lower income folks with welfare.

[PotatoChip]

6. Not in *my* total, so there is no need for me to address the rest of your post.

I removed the 1.9 Billion (EIC part) of the nearly 7 Billion dollar total written about in the article.

That still leaves nearly 5 Billion in public assistance that fast food employees need, in order to make ends meet. To continue on and on and on about the EIC part, even after I took the time to remove it for you = Strawman.

The discussion is about public assistance for underpaid fast food workers, not EIC, or you.

[TBF]

4. Walmart, Fast Food - how many other corps are getting away with this?

It's disgusting that folks can work 1-2 jobs a week and still be living in poverty. We must raise the minimum wage. No more corporate welfare.

[Egalitarian Thug]

7. There are no major American corporations that that do not rely on huge subsidies, either direct

or indirect, from the taxpayers to exist. The fact is that the whole corporatist system cannot sustain itself without robbing us because they are too inefficient and moribund.