Fast-food restaurants are serving their workers an "unhappy meal" of poverty wages, leaving workers struggling to make ends meet and making all of us underwrite corporate profits by transferring the costs of workers' health care and other basic needs to taxpayers, according to a report released on October 15 by researchers at the University of California, Berkeley Labor Center.

The study counts the cost to society of an industry that pays its employees poorly and its CEOs millions. It summarizes the major challenges faced by fast-food workers:

  • Low wages: "core front-line fast-food jobs pay an average of $8.69 an hour."
  • No benefits: 87 percent of fast-food workers do not receive health benefits from their employer.
  • 52% of fast-food employees' families are forced to rely on social safety net programs like food stamps or Medicaid.
  • Not enough hours: fewer than 3 in 10 employees (28 percent) work 40-hour weeks.


  • The damage wrought by fast-food corporations is not limited to the industry's workers. Americans indirectly pay twice for every "unhappy meal." They pay once to the restaurant (fast-food is a $200 billion industry and McDonald's, for example, pays its CEO $13.8 million a year), and again as they are forced to cover healthcare and other basic needs because these multi-billion dollar corporations fail to provide their hard-working employees living wages. The UC Berkeley report estimates the latter cost nearly $7 billion per year.

    This business model is particularly troubling at a time when 7 of the 10 fastest-growing U.S. occupations, including restaurant work, pay less than the national median wage. Low-wage jobs such as fast food and retail work are hallmark jobs of the so-called economic recovery. They are jobs on which more and more people depend to support themselves and their families: the average fast-food worker today is over 28 years old. Fewer than 1 in 5 fast-food employees is a teenager living with a parent.

    It's time to hold big corporations accountable for a deliberate and flawed low-wage business model that hurts workers and taxpayers.

    "This is the public cost of low-wage jobs in America [that] remains hidden in national debates about poverty, employment and federal spending," the study's authors note. They call for action to improve workers' lives, "either through public policy measures such as living and minimum wage laws, or through collective bargaining." Read the full UC Berkeley report.

    This summer, fast-food workers stood up across the country and demanded a living wage, participating in strikes in more than 60 cities.

    This piece first appeared in the SEIU blog