Fast-Food Giants Make Billions While Their Workers Survive on Billions In Welfare Benefits
http://www.alternet.org/corporate-accountability-and-workplace/fast-food-giants-make-billions-while-workers-welfare?akid=11054.263688.8cD2Uw&rd=1&src=newsletter911956&t=5October 15, 2013 |
Wages at Americas fast-food chains are so low that millions of employees have been receiving at least $7 billion a year in welfare benefits between 2007 and 2011, according to a new study by University of California and University of Illinois labor economists.
Our research estimates the public cost of low wageslow wage jobs in the fast food industry, said Ken Jacobs, chair of the U.C. Berkeley Center for Labor Research and Education. We specifically focus on the core, frontline fast-food workforce. These are people you are most likely to see when you walk into a fast-food restaurant.
The median wage for these workers is $8.65 an hour, Jacobs said Tuesday. Only 13 percent have health benefits through their employer. The combination of low wages, meager benefits and often part-time hours means that many of the families of fast-food workers must rely on taxpayer-funded safety net programs to make ends meet.
But the billions in taxpayer subsidies is only half of the story, the labor economists said, because a companion report, also released Tuesday, found that the 10 largest fast-food chains made more than $15 billion in profits and shareholder give-backs in 2012revealing the industry could afford to pay living wages.
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Laelth
(32,017 posts)-Laelth
JayhawkSD
(3,163 posts)but for instance, if you divide the $53 million paid to the CEO among the 700,000 workers, it amounts to less than 4 cents per hour.
The article says that $15 billion in profits is "revealing the industry could afford to pay living wages," but if you divide it by the cited 2.25 million workers that amounts to 32 cents per hour. If $8.65 is not a living wage are we claiming that $8.97 is a living wage? Somehow that seems unlikely.
Yes, $8.65 is terrible, but other than dazzling with some big numbers I don't see where the article is making a substantiated case for the industry's ability to pay significantly more than it is currently paying.
AZCat
(8,339 posts)$15 billion divided by 2.25 million workers, assuming 2,080 hours per year per worker, gives $3.21 per hour per worker, not $0.32.
JayhawkSD
(3,163 posts)That would up the wage to $11.86 which is close to the "living wage" claimed by the article. That does make a better case for the industry being able to pay better wages, and the nature of your pleasant correction promotes reasonable discussion.
This confusion illustrates the problem with the method used by the article, and which is so popular in today's media, of throwing big numbers around without context. It is almost impossible to make any sense of them. A wage of $11.86 is well short of the kind of largess that the writer tries to convey should be possible with the "profits of over $15 billion" that it throws at the reader, and that would mean the businesses operating with no profit, which is kind of silly.
Trying to find real numbers for the "big ten" that the article is based on is fairly easy in some respects, and all but impossible in others. Corporate websites are, by law, pretty transparent for corporations, and they post the filings which they make to the SEC. Based on that I had no real trouble finding some of them.
Yum Brands made $770 million profit the first half of this year, which was a 12.7% margin. Not bad, but hardly usury.
Wendy's made $79.5 million the first half, for a $6.3% margin; pretty close to as low as you can be and survive.
Dunkin Donuts made $93.5 million for a 27.2% margin. That is a lot, but a single employer does not make the author's case.
I've done marketing work with Subway, and they are 99% franchised operations. Only a handful are owned by Subway. Wages and working policies are determined by the franchise owner, not by Subway, and prices are set by market surveys. The franchise owners tell me that their profits are decent but they are small guys. Each owner owns two or three stores, typically, and the income from his stores is how he makes his house payment and feeds his family. My guess would be that this is typical of how franchise operations work generally, but...
The rest of the "big ten," Burger King, Dairy Queen, Little Ceaser's, Sonic and Domino's are all franchise operations like Subway. At the local Burger King where I eat occasionally the owner works behind the counter. So, where did that "$15 billion profits" come from, and how does it really have any meaning?
The vast majority of the article's "$15 billion profit" would seem to be from franchising corporations, which is irrelevant to the discussion of wages paid by the franchised operations. We're only showing $1.8 billion in profit from corporations which actually employ fast food workers directly. Most fast food workers are employed by small business people who hold franchises on the stores they operate, and live on the income from those stores.
jsr
(7,712 posts)Doctor_J
(36,392 posts)so these workers can actually live on their earnings, instead of having to jump through hoops to get by, even after working all week.