Skip to main content

How McDonald's sends taxpayers the bill

By Jack Temple, Special to CNN
October 29, 2013 -- Updated 1307 GMT (2107 HKT)
Workers demonstrate at a Wendy's and Burger King in New York City for higher pay and benefits.
Workers demonstrate at a Wendy's and Burger King in New York City for higher pay and benefits.
STORY HIGHLIGHTS
  • Jack Temple: Fast-food companies shift costs of their low pay onto taxpayers
  • Temple: McDonald's tip line told worker, a mom, to apply for food stamps, Medicaid
  • Low wages at 10 largest fast-food firms cost taxpayers $3.8 billion each year, he says
  • Temple: It would be a real value to all if fast food workers got higher wages and benefits

Editor's note: Jack Temple is a policy analyst at the National Employment Law Project, a nonprofit organization that works to promote policies and programs that create jobs and help unemployed workers regain their economic footing.

(CNN) -- Don't let McDonald's new "Dollar Menu and More" distract you. Although an order of McNuggets might cost more than a buck now, the truth is that the Dollar Menu was never a bargain.

In reality, whether you eat the fries or not, fast-food companies such as McDonald's actually shift billions of dollars in hidden costs onto taxpayers every year. How? These costs flow directly from their business model of low wages, nonexistent benefits and limited work hours, which force millions of fast-food workers to rely on public assistance to afford basic necessities such as food and health care.

To see this business model in action, take a look inside the employee break room at many McDonald's restaurants, where you might find a poster displaying information for a 1-800 "McResource" hotline designed to offer counseling to employees who need financial, housing, child care or other help.

Jack Temple
Jack Temple

In a recent exchange on the McResource hotline, documented in a newly released video, an employee who has worked at McDonald's for 10 years -- yet earns the Illinois minimum wage of $8.25 per hour -- is urged to find additional support for herself and her two children by paying a visit to nearby food pantries, applying for food stamps and signing up for Medicaid.

In other words, rather than sitting down with their employees to address the reality that the company's pay scales are just too low -- and that even long-term employees can't get by on their small paychecks -- McDonald's has decided to coach its workers on how to enroll in public safety-net programs to supplement their poverty-level wages. (McDonald's called the video an inaccurate portrayal of the resource line.)

In total, this business model of low wages and no benefits at the 10 largest fast-food companies costs taxpayers an estimated $3.8 billion each year, according to a recent report by the National Employment Law Project. At McDonald's, the company's low-wage jobs cost taxpayers an estimated $1.2 billion a year -- twice as much as any other fast-food company.

Public safety-net programs such as the Supplemental Nutritional Assistance Program (commonly known as "food stamps") and Medicaid are crucial programs for alleviating poverty and promoting economic security in the United States. That is precisely why we cannot afford to let multibillion-dollar companies drain the resources of these programs by paying poverty-level wages to millions of their workers.

Fast food workers demand higher wages

The good news is that over the past year, thousands of workers in the fast-food industry have begun organizing and staging strikes in dozens of cities across the country, calling for a living wage and the right to form a union. These demands should be taken seriously. All Americans -- even those who have never worked in fast food or have no plans to eat fast food -- need to recognize that the low-wage fast-food industry poses significant costs to all of us each year.

Fast-food workers should have the ability to bargain collectively for higher wages and better working conditions. Giving workers a voice at the workplace will ensure a fairer, more democratic workplace, while keeping in check the irresponsible business model of CEOs tapping the public safety net for billions in subsidies each year as they continue to pay poverty-level wages.

At the same time, Congress should pass a long-overdue increase in the federal minimum wage, which has remained stuck at just $7.25 per hour -- or $15,080 a year -- for the past four years.

Although many companies will continue to pay as little as they can get away with, raising the minimum wage to $10.10 per hour, as proposed in the Fair Minimum Wage Act of 2013, would boost wages for 30 million workers, generating $32 billion in new economic growth as higher wages power greater consumer spending.

A fairer fast-food industry that provides higher wages, promotes greater economic growth and spares taxpayers billions in costs every year sounds like a real value worth fighting for.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Jack Temple.

ADVERTISEMENT
Part of complete coverage on
December 19, 2014 -- Updated 1022 GMT (1822 HKT)
President Obama has been flexing his executive muscles lately despite Democrat's losses, writes Gloria Borger
December 18, 2014 -- Updated 1951 GMT (0351 HKT)
Jeff Yang says the film industry's surrender will have lasting implications.
December 18, 2014 -- Updated 2113 GMT (0513 HKT)
Newt Gingrich: No one should underestimate the historic importance of the collapse of American defenses in the Sony Pictures attack.
December 10, 2014 -- Updated 1255 GMT (2055 HKT)
Dean Obeidallah asks how the genuine Stephen Colbert will do, compared to "Stephen Colbert"
December 18, 2014 -- Updated 1734 GMT (0134 HKT)
Some GOP politicians want drug tests for welfare recipients; Eric Liu says bailed-out execs should get equal treatment
December 18, 2014 -- Updated 1342 GMT (2142 HKT)
Louis Perez: Obama introduced a long-absent element of lucidity into U.S. policy on Cuba.
December 16, 2014 -- Updated 1740 GMT (0140 HKT)
The slaughter of more than 130 children by the Pakistani Taliban may prove as pivotal to Pakistan's security policy as the 9/11 attacks were for the U.S., says Peter Bergen.
December 17, 2014 -- Updated 1600 GMT (0000 HKT)
The Internet is an online extension of our own neighborhoods. It's time for us to take their protection just as seriously, says Arun Vishwanath.
December 16, 2014 -- Updated 2154 GMT (0554 HKT)
Gayle Lemmon says we must speak out for the right of children to education -- and peace
December 17, 2014 -- Updated 1023 GMT (1823 HKT)
Russia's economic woes just seem to be getting worse. How will President Vladimir Putin respond? Frida Ghitis gives her take.
December 17, 2014 -- Updated 0639 GMT (1439 HKT)
Australia has generally seen itself as detached from the threat of terrorism. The hostage incident this week may change that, writes Max Barry.
December 12, 2014 -- Updated 2020 GMT (0420 HKT)
Thomas Maier says the trove of letters the Kennedy family has tried to guard from public view gives insight into the Kennedy legacy and the history of era.
December 15, 2014 -- Updated 1456 GMT (2256 HKT)
Will Congress reform the CIA? It's probably best not to expect much from Washington. This is not the 1970s, and the chances for substantive reform are not good.
December 15, 2014 -- Updated 2101 GMT (0501 HKT)
From superstorms to droughts, not a week goes by without a major disruption somewhere in the U.S. But with the right planning, natural disasters don't have to be devastating.
December 15, 2014 -- Updated 1453 GMT (2253 HKT)
Would you rather be sexy or smart? Carol Costello says she hates this dumb question.
December 14, 2014 -- Updated 2253 GMT (0653 HKT)
A story about Pope Francis allegedly saying animals can go to heaven went viral late last week. The problem is that it wasn't true. Heidi Schlumpf looks at the discussion.
December 14, 2014 -- Updated 1550 GMT (2350 HKT)
Democratic leaders should wake up to the reality that the party's path to electoral power runs through the streets, where part of the party's base has been marching for months, says Errol Louis
December 13, 2014 -- Updated 2123 GMT (0523 HKT)
David Gergen: John Brennan deserves a national salute for his efforts to put the report about the CIA in perspective
December 12, 2014 -- Updated 1426 GMT (2226 HKT)
Anwar Sanders says that in some ways, cops and protesters are on the same side
December 11, 2014 -- Updated 1439 GMT (2239 HKT)
A view by Samir Naji, a Yemeni who was accused of serving in Osama bin Laden's security detail and imprisoned for nearly 13 years without charge in Guantanamo Bay
December 14, 2014 -- Updated 1738 GMT (0138 HKT)
S.E. Cupp asks: How much reality do you really want in your escapist TV fare?
December 11, 2014 -- Updated 1828 GMT (0228 HKT)
Rip Rapson says the city's 'Grand Bargain' saved pensions and a world class art collection by pulling varied stakeholders together, setting civic priorities and thinking outside the box
December 13, 2014 -- Updated 2310 GMT (0710 HKT)
Glenn Schwartz says the airing of the company's embarrassing emails might wake us up to the usefulness of talking in-person instead of electronically
December 12, 2014 -- Updated 2233 GMT (0633 HKT)
The computer glitch that disrupted air traffic over the U.K. on Friday was a nuisance, but not dangerous, says Les Abend
ADVERTISEMENT