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What you need to know for 08/23/2017

The real cost of cheap fast food

The real cost of cheap fast food

Taxpayers subsidizing an entire industry

America’s fast-food industry appears to have the recipe for success — for shareholders, anyway. But it’s not a very healthy one for workers, roughly half of whom make less than $8.69 per hour; or taxpayers, who have to subsidize those workers through various forms of public assistance, to the tune of $7 billion a year. Obviously, cheap hamburgers and such (which also add billions to the country’s health care bill every year) aren’t the bargain many consumers think they are.

Legislators ought to keep that in mind as they confront the idea of raising the minimum wage, which many fast-wood workers are paid. If the minimum were $15 an hour, as workers in 100 cities who are planning a one-day strike today think it should be, it would surely reduce their reliance on government programs like Medicaid, food stamps and child health care subsidies.

Unfortunately, a jump like that would also raise the price of fast-food fare, in turn reducing sales and crimping industry profits. Thus the chance that politicians would vote for so large an increase — the current federal minimum is just $7.25, though many states have higher minimums — is probably slim to none.

But some increase wouldn’t be so bad considering how much substandard wages are costing the economy. The fast-food industry is not alone in its parsimony, of course; employers in the retail sector are also notoriously low-paying.

Wednesday’s Froma Harrop column pondered whether American consumers would be willing to pay more to buy better-quality clothing produced by Americans, rather than the flimsy imported garments they now buy. A similar question might be asked of fast-food restaurant patrons: Would they pay more to support a living wage for their fellow American workers? We suspect that if such an increase hiked the price of a typical fast-food meal 50 cents and no cheaper alternative existed, consumers who like that kind of food — once they recovered from sticker shock and stopped grumbling — would go back to their old habits, a new normal having been established.

The big differences are that workers now reliant on the government’s help to survive would be able to hold their heads high, and taxpayers wouldn’t have to subsidize McDonalds et al. to the extent they now must.

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