KY Policy Blog

Kentucky Fast Food Workers Struggle with Low Wages While Industry Does Well

By Jason Bailey
October 15, 2013

Kentucky’s 32,000 frontline fast-food workers make such low wages that 46 percent of them qualify for low-income public assistance programs at a cost of $115 million in 2011, according to a new report released today by researchers at the University of Illinois and University of California-Berkeley.

The report shows that the low wages of non-managerial fast food workers make them twice as likely as all workers to participate in income-based public assistance programs. In Kentucky in 2011, 44 percent of fast food workers received the earned income tax credit, 11 percent participated in Medicaid, 17 percent had children in Medicaid or CHIP and 24 percent received SNAP benefits, formerly known as food stamps.

These programs are a critical part of our safety net, playing a key role in helping those in economic distress meet basic needs and make their lives better. However, costs for these programs are higher when large, profitable corporations who can afford to pay their workers more simply do not do so.

According to another new report, the nation’s seven biggest fast-food companies made a combined $7.4 billion in profits last year, paid $53 million in salaries to top executives and distributed $7.7 billion in dividends and buybacks to shareholders. YUM! Brands, headquartered in Louisville and the nation’s second-largest fast food company, made $1.59 billion in profits last year, and its CEO brought in $14.1 million in total compensation.

The median wage for fast food workers nationally is $8.69 an hour, and many make at or near the minimum wage–the real value of which has eroded over the years. An estimated 87 percent of fast food workers don’t receive health benefits through their employer.

The report notes that the nature of the recovery means many people are struggling in low-wage jobs. While 60 percent of job losses in recent years have been in middle-wage jobs, only 20 percent of post-recession job growth has been in such jobs. Low-wage positions like those in fast food make up nearly three out of five jobs generated in the first three years of the recovery.

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