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McDonald's helpline to employee: Go on food stamps

McDonald's hotline set up to help workers with their financial issues redirects workers to public aid like food stamps and Medicaid, and a recent study suggests that fast food workers rely on $7 billion in federal aid annually to make ends meet. Are taxpayers footing the bill for low worker wages? 

By Staff writer / October 24, 2013

A crowd of low-income fast food workers and their supporters protest outside of the McDonald's restaurant in Memphis, Tenn., in August. Wage advocates have zeroed in on another group they say is suffering financially from fast food chains’ low worker wages: the American taxpayer.

Jim Weber/The Commercial Appeal/AP/File

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The protest movement for higher wages for fast food workers has been simmering for several months now, in the form of employee walkouts and street rallies in several major US cities. Now, advocates have zeroed in on another group they say is suffering financially from fast food chains’ corporate stinginess: the American taxpayer.

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The charge is that McDonald’s and other fast food giants who pay their workers less than what many consider a "living wage" are letting taxpayers pick up the slack in the form of public assistance. A video released Wednesday by the labor advocacy group Low Pay is Not Ok drives the point home. In it, Nancy Salgado, a 10-year McDonald’s employee in Chicago and a mother of two, calls a worker helpline called McResources, purportedly set up to help employees with financial issues. During the call, which the group recorded and edited, the operator suggests that Ms. Salgado apply for food stamps and Medicaid, giving her numbers in the Chicago area to call.

“McDonald’s doesn’t want to pay its workers more. It wants you to pay its workers more,” text at the end of the video read.

McDonald’s refuted the video’s contents in a statement Wednesday, calling it “not an accurate portrayal of the resource line,” and “very obviously” edited.  But the full 14-minute call was made available to reporters, and while the operator did tell Salgado that her franchise hadn’t signed up for full McResource services, she did give her the information that the edited video claims.

What’s more, the unedited call does nothing to refute the concept of fast food chains underpaying their workers as a hefty public burden, a notion that is gathering steam with a small but growing number of advocacy groups, economists, and policymakers.

The video’s release comes a week after economists at the University of California Berkeley and the University of Illinois released a study finding that fast food workers in the US draw nearly $7 billion annually in taxpayer-funded federal aid, in the form of food stamps ($1 billion), Medicaid ($3.9 billion), and earned income tax credits ($1.9 billion). More than half of the 1.8 million “core” fast food workers who work at least 11 hours per week and 28 percent of those who work full time rely on some form of public assistance, according to the study.

“Low wages paid by employers in the fast-food industry create especially acute problems for the families of workers in this industry,” the study’s introduction reads. “Median pay for core front-line fast-food jobs is $8.69 an hour, with many jobs paying at or near the minimum wage. Benefits are also scarce … and many of the families of fast-food workers must rely on taxpayer-funded safety net programs to make ends meet.”

The fight to improve the lot of low-wage workers in both the food service and retail sector has been chugging along since at least last year, when a group of Wal-Mart workers threatened to strike on Black Friday, the biggest shopping day of the year. Some workers at McDonald’s, Wendy’s, and other major fast food chains went on strike in late August, demanding health benefits and a living wage.

Democratic Senator Elizabeth Warren from Massachusetts has even taken up the issue of fair worker, arguing in a March Senate hearing that it would only cost McDonalds four cents more per meal to provide a $10.10 minimum wage to all of its workers.

But the focus on the tax aspect of the inequity is new, and it’s a shift with the potential to give this particular protest movement staying power, argues David S. Meyer, a professor of sociology and political science at the University of California in Irvine who studies large protest movements. Still, he doubts that it would be enough to affect a policy change on its own. “Are the people who are not making enough money at McDonald’s enough to support a political campaign? Probably not. That’s certainly not there,” he says.

Another issue: McDonald's didn’t become the biggest restaurant chain in the world without a successful business model. “It exists to sell food cheap,” Meyer points out. “And if you pay people $15 an hour, it won’t be as cheap. And they would be crazy to pay people much more than their competitors.”

For the movement to affect change, he argues it would have to strike a chord with a powerful enough group of people, or capitalize on the right news story. “The antinuclear movement hung around for years, and then Three Mile Island happened and made the whole thing bigger,” he says. “It just takes the right opportunity.” 

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