Fast Food Restaurants Cost Taxpayers Nearly $8 Billion


Why Are We Subsidizing Profitable Corporations?


By Dr Stuart Jeanne Bramhall


Over the past few days, the corporate media has been trumpeting September’s “low” 7.2% unemployment rate. For the most part, the mainstream media fails to report that joblessness has only decreased 0.1% since August. Or that 20,000 of the 148,000 jobs created were temporary jobs. They also neglect to mention that most new jobs since the 2008 economic crisis don’t pay enough to live on. Which means that US taxpayers subsidize minimum wage workers to the tune of $7.8 billion a year. Given the current $17 trillion government debt, this seems like a major chunk of change.

In 2012, half of US jobs paid under $33,000 annually. Most of these minimum wage jobs are in America’s fast food restaurants, where employees struggle to get by on $7.25 an hour.

According to a recent University of Berkeley/University of Illinois study, 52% of fast food workers rely on federal programs like Medicaid, food stamps, the Earned Income Tax Credit, and Temporary Assistance for Needy Families to provide for their children. This is due partly to poverty-level wages and partly to heavy reliance by fast food outlets on part time workers (under 30 hours per week). MacDonald’s et all are reluctant to take on full time employees owing to the new requirement (under Obamacare) that they provide health insurance for full time workers. .

Something seems terribly wrong here. MacDonald’s, Subway, Burger King, Wendy’s, Domino’s Pizza are all highly profitable corporations. So why is the US taxpayer bailing them out by providing health care, food stamps, and other federal benefits for their employees and their families?

Work Week Shrinking Under Obamacare

Under Obamacare, employers are only required to provide health insurance if workers put in more than 30 hours a week. has been tracking employers that are either cutting work hours or only hiring part time workers to reduce their obligation under the new law.

When employers cut back their full time workers, Obamacare shifts responsibility to the federal government (through expanded Medicaid programs and premium subsidies) to provide health coverage for minimum wage workers. Thus in addition to subsidizing MacDonald’s, Subway, Burger King, Wendy’s, Domino’s Pizza, the taxpayer is also subsidizing highly profitable insurance companies like Aetna, United Health Care, and Blue Cross/Blue Shield.

The Government Accountability Office reports that Obamacare will increase the federal deficit by $6.2 trillion. $709 billion of this will fund Medicaid expansion (from 2014-2023). The rest will take the form of direct subsidies to insurance companies.

Sarah Palin Describes Obamacare as Corporatism

In a recent oped on Breitbart, former Alaska governor Sarah Palin describes Obamacare as “a sort of corporatism, which is the collusion of big government with big business.” While she and I disagree on many issues, that we definitely agree on.

She goes on to predict that the exorbitant costs will cause a breakdown in the US health care system. When this happens, she believes, Americans will clamor for the government to enact a single payer system which excludes parasitic health insurance companies from the health care equation.

I sure hope she’s right. Palin makes the unsubstantiated claims that single payer funding will lead to death panels and higher costs. There are no death panels in Medicare, which is a single payer system. Moreover Medicare, which was enacted in 1965, enables senior citizens to access health care far more cheaply and efficiently than private insurance does.

Nor are there death panels in the dozens of other countries that publicly fund health care. Even more importantly, they all pay about half what the US does for medical services. Seems to me it’s high time for the US to catch up with the rest of the civilized world. Except for the US, all other industrialized countries guarantee that all citizens, regardless of income, have the right to see a doctor when they’re sick.

photo credit: caribb via photopin cc

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Posted by on Oct 23 2013, With 0 Reads, Filed under Economy, Jobs & Careers. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.


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7 Comments for “Fast Food Restaurants Cost Taxpayers Nearly $8 Billion”

  1. It’s not just fast food restaurants, this is the MO of the big retailers, hotels and chain restaurants as well. Limit full time jobs so they don’t have to pay benefits – no pension plans. All the junk they sell is made in some asian sweatshop or farmed/grown in filthy ponds (Red Slobster) and the goal is to pocket the profits. On September 10, 100 big US corporations sent a letter to Pelosi and Boehner signed by their HR chiefs, demanding amnesty for illegals and dramatic increases in the number of foreign worker permits so they can bring em in, pay them dirt wages, and put the illegals and foreigners on the US taxpayer benefit wagon as well. Same corporations who are citing “labor shortages” in the letter laid off and cut jobs for thousands of US citizens. See NumbersUSA for the article and the link to the letter.

  2. And also, smokers must pay a tax to help with healthcare on every pack of smokes, however the extremely unhealthy fast food is exempt? Surely, the healthcare costs of caring for fast food eaters is astronomical!

  3. Capitalism is first, then law enforcement and finally medical. The hoops required expose all to the law enforcement preview before care.

  4. The race to the bottom is accelerating at an ever increasing speed. The middle class, what remains of it, just took another hit. The two class system is almost here. We’ll have the well-to-do class, and everybody else will be lumped into the working/welfare class. Got to find another place to live.

  5. Exactly the same scenario is being employed in the UK minimum wage and part time earners are being subsidized via a system of so called “tax credits”. in effect this is a subsidy to the employers who do not pay a living wage.

    Re death panels the NHS has been bumping people off using the Liverpool Care Pathways methodology and over a hundred thousand people have been killed by neglect in the last 12 months ( see Stafford NHS). Eugenics is alive and well in the UK. The former Communist leader of the NHS Nicholson has been defended by David Cameron and no-one has been charged with any crimes despite the number of deaths.

    Sir David Nicholson, KCB, CBE is Chief Executive of NHS England. … He joined the Communist Party of Great Britain after graduation

  6. Once again you have educated me to a subject for which I was in the most part ignorant Dr. I figured Obamacare was better than no healthcare at all but according to what your saying it is an incentive to create as many low a paying thirty hour a week jobs as possible. Forget the part about it being in collusion with big business and the insurance company’s I think everybody but Arianna Huffington and her crack team of drooling morons working over water proof keyboards knows that but to act as a recruiting agent for McDonalds? When is this ever going to end. Is their no amount of treason the American sheeple will not tolerate?

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