10-17-13 7:00 AM EDT | Email Article
 

By Al Lewis

 

It's time for millions of Americans to take a moment out of their lunch breaks and give thanks to their fellow taxpayers.

 

Burgers, tacos, pizzas, hot dogs, egg rolls, chicken nuggets, french fries and all the other greasy delights that our fast-food industry cooks up would not be as cheap as they are today without taxpayer subsidies.

 

There is no free lunch. There is not even, really, a Dollar Menu.

 

The fast-food industry costs U.S. taxpayers about $7 billion a year, according to a report released this week. Researchers at the University of California at Berkeley and the University of Illinois said this subsidy comes about because 52% of fast-food workers are paid so poorly that they must rely on public assistance programs such as Medicaid and earned income tax credits.

 

The National Employment Law Project jointly issued another report showing that the largest fast-food companies, by employee count, could afford to pay their employees better.

 

Last year, of the 10 largest fast-food chains, the seven that are publicly traded earned a combined $7.44 billion in annual profits: McDonald's Corp. (MCD) , Yum Brands Inc. (YUM) (KFC, Taco Bell and Pizza Hut), Burger King Worldwide Inc.(BKW) , Wendy's Co. (WEN) , Dunkin Brands Group Inc. (DNKN) , Sonic Corp. (SONC) and Dominos Pizza Inc. (DPZ)

 

They also put up $7.6 billion for dividends and stock buybacks, and they gave $52.7 million to their highest-paid executives, the NELP report said.

 

Both studies were sponsored by Fast Food Forward, a progressive group that wants these restaurants to pay their workers at least $15 an hour. They also demand benefits such as health care and paid sick days.

 

This is a gutsy demand in a nation where the president can't seem to get the federal minimum wage raised from $7.25 to $9 an hour.

 

It's even gutsier to bring it up during a week when some government workers aren't getting paid anything, and when a global economic collapse looms as just one bad decision away.

 

But these are desperate times. Fast-food workers aren't the teenagers of decades past. After five years of abysmal job growth following the 2008 financial crisis, these are increasingly the only jobs available for low-skilled workers. Most fast-food workers are now older than age 20, and 68% percent are the main wage earners in their families, according to one of the studies.

 

Adjusted for inflation, the minimum wage is currently 20% less than it was in 1967. Any employer who pays it is costing someone else money.

 

We have heard similar arguments applied to Wal-Mart Stores Inc. (WMT) and other low-paying employers. When their employees need medical care they turn up in emergency rooms, indigent and uninsured. When they need to feed their families, they apply for food stamps. People who work shouldn't have to be this poor.

 

They could give every fast-food worker in this country a one-time $100,000 bonus and it wouldn't even add up to a rounding error in the hundreds of billions we gave the banks.

 

And it's difficult to find a more potent symbol of the gap between rich and poor than the Golden Arches. Last year, McDonald's gave its CEO Don Thompson a compensation package worth $13.7 million, or more than 558 times what McDonald's employees make after holding down two jobs.

 

Most Americans don't seem to care about this gap as long as they get their $1 McDouble cheeseburgers. Even people running around with corporate expense accounts are often reduced to eating Big Macs.

 

McDonald's and Subway ranked among the top-five most expensed restaurants for people turning in corporate expense reports, according to a recently survey by Certify, an online travel and expense management solution provider.

 

If taxpayers are indeed subsidizing fast-food restaurants, they are also subsidizing the corporations who pay for their traveling employees to eat there.

 

Fast-food restaurants are imposing even more costs on society as likely culprits in America's obesity crisis. A study earlier by John Cawley and Chad Meyerhoefer said obesity adds $190 billion a year to annual medical costs.

 

People used to joke about the government paying people to dig a hole and then fill it. Now it apparently pays to fatten Americans, and then it pays for their health care.

 

But at least a taxpayer-subsidized cheeseburger tastes better than dirt.

-Al Lewis; 415-439-6400; AskNewswires@dowjones.com

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

10-17-13 0700ET

Copyright (c) 2013 Dow Jones & Company, Inc.
Copyright 2014 MarketWatch
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