Tuesday, November 5, 2013

DEBATE: Is Taxpayer cost of fast-food industry's low paying Jobs More than it's Worth?

Relative to the price of a value meal, $7 billion is an awfully big pile of cash. Relative to the total payroll of fast-food workers in the U.S., or the total cost of major nationwide benefits programs, it's not much. 
That figure made headlines last month after researchers at the University of California, Berkeley, and the University of Illinois, Urbana-Champaign, reported that front-line workers at fast-food restaurants, and their families, receive at least $7 billion a year in public benefits to supplement their wages—typically, under $9 an hour. The authors described the amount as "the public cost of low-wage jobs in the fast-food industry."
Other researchers dispute that interpretation. They say the cost to the public would be higher without those jobs. And if fast-food restaurants raised their wages, that wouldn't guarantee a corresponding decline in benefits: Some restaurants might automate functions and cut jobs, and some benefits remain available to workers making higher salaries. 
"There are unintended consequences associated with raising the minimum wage," said Michael Saltsman, research director at the Employment Policies Institute, a conservative think tank in Washington, D.C.
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One challenge in interpreting the $7 billion estimate is that several voices in the debate are funded by groups with an agenda on the minimum wage. Mr. Saltsman's organization receives funding from the restaurant industry. Meanwhile, the group that produced the estimate got funding from Fast Food Forward, a New York body that advocates raising wages for fast-food workers. And Sylvia A. Allegretto, the lead author and a UC Berkeley economist, has urged that her data be used to lobby for a higher minimum wage. 
Mr. Saltsman and Dr. Allegretto said their funders have no effect on their findings.
Read the rest of the story HERE.

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