The University of California – Berkeley released a study implicating the fast food industry for variety of sins, mainly, not paying high enough wages generic levitra to its employees and not providing benefits. This is not terribly surprising since there is a push by labor groups to unionize fast food employees and pay them above-market wages. The study, titled “The Public Cost of Low-Wage Jobs in the Fast-Food Industry,” was also featured in a brief written by the National Employment Law Project, a pro-labor advocacy organization. It is designed to anger taxpayers about footing the bill for public assistance programs by blaming the costs on uncaring CEOs of fast food companies.
After reading NELP’s article and the Berkeley study, I was a bit perplexed by the conclusions to be drawn. While most agree that the median wage for a typical fast-food worker is nothing to write home about, the Berkeley study failed to disclose pertinent information that puts the industry labor market into context.
Here are some examples from the Berkeley study:
- “Median pay for core front-line fast-food jobs is $8.69 an hour, with many jobs paying at or near the minimum wage.” But how many individuals earn the minimum wage for the rest of their lives? Very few, I would bet.
- “People working in fast-food jobs are more likely to live in or near poverty.” Fair enough, but what is not clear is causation. Are people living in poverty more likely to work in the fast-food industry due to their skill level, or does working in a fast-food job lead to poverty? Of course the study would not attempt to investigate such a crucial issue.
- “An estimated 87 percent do not receive health benefits through their employer.” What percent of this 87 percent is part-time? The study later confirms on a back page that about 41 percent of fast-food workers work less than 30 hours a week. Yet there is absolutely no mention of the role of Obama Care in the decision for restaurants to reduce their employees’ work hours. Furthermore, fast food restaurants that attempt to offer affordable limited health care plans for their employees will no longer be able to do so under Obama Care.
What is particularly intriguing is how the study rightfully notes the cost of Medicaid, which trumps the cost of other assistance programs. Berkeley reports that 330,000 fast-food workers are enrolled in Medicaid, and 432,000 children of fast-food workers are enrolled in CHIP, the Children’s Health Insurance Program. But being that many states offer Medicaid benefits to households living well above the poverty level, it is disingenuous to connect Medicaid benefits directly to fast-food workers. In fact, there are 636,000 families enrolled in Medicaid and CHIP in Massachusetts thanks to its generous eligibility criteria, but only 34,000 households containing fast-food workers. It would hardly make sense to blame Massachusetts’ Medicaid burden on the fast-food industry. But far be it for facts to get in the way of a good push by “living wage” advocates.
So what are the solutions besides mandating a $20 minimum wage that will further drive workers into poverty (as a result of their becoming unemployed)? More on this in a future post.