Taxpayers Subsidise the Fast Food Industry

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International, Worker's Rights

imagesby Jamison Maeda

McDonald’s recently purchased a $35 million luxury jet for its corporate executives. But the life of a front line fast food worker is startlingly different to say the least.

McDonald’s Canada is being accused of forcing five Belizean workers to live in an apartment leased by McDonald’s then deducting rent from their pay checks leaving them barely enough to live on.  “Even if we leave the apartment and go rent another apartment, that McDonald’s would still deduct the rent from our salary,” one of the workers said.

The Belizean workers arrived in Canada and were told they would be living together in the apartment. Nearly half of their take-home pay was deducted from each pay check by McDonald’s to pay toward rent at the apartment at what appears to be $600 per month more than McDonald’s was paying for the lease.

Fast-food worker salaries are notoriously low. Over 50% of fast food workers in the U.S. rely on food stamps and other social programs. Taxpayers supplement low wages while the average fast food industry CEO salary is over $24 million a year. The annual compensation for a fast food industry CEO is over 1,000 times greater than the average fast food worker. In 2012 it was over 1,200.

And due to U.S. tax law, corporations are allowed to deduct unlimited amounts from their income taxes for the cost of stock options and other forms of “performance pay” for executives. Not only are taxpayers bearing the burden of low fast food worker salaries, but corporations can offer performance pay to executives tax free. McDonald’s, Starbucks, Taco Bell, and other corporations have used this law to reduce their tax bill by more than $230 million dollars.

Fast food workers are also frequent victims of “wage theft,” when an employee is denied pay for hours they worked, or forced to clock out during slow periods, but not allowed to go home. Sandwich chain, Subway, was found guilty of 17,000 separate violations of the Fair Labor Standards Act. The U.S. Department of Labor is now working directly with Subway’s corporate parent company to counteract their wage theft epidemic.

Large corporations will continue to pay low wages, and ordinary people will subsidise them through tax dollars, unless we take a stand and tell the executives in their luxury jet that until they pay their employees a living wage, perhaps we’ll stay home and make our own sandwiches.