Big Corporations and Big Social Programs

By Jonathan Wynn 

Having taught at a few different colleges and universities, I’ve had students who knew the real struggles of living in poverty and near poverty. But for every one of those students, there have been hundreds more who were unfamiliar with the anxieties of everyday economic uncertainty.  Poverty is a hard thing to teach about—both the very macro-level issues to the more personal, micro-level ones.

Although my blog post last year on McDonald’s was an invitation to think about work and compensation at a global scale (on The Big Mac Index) recent news offers us a chance to connect the dots between the big headlines of the Obama Administration’s Affordable Care Act, news on new campaigns against low wage pay for fast food work, and those everyday economic hardships. In all the talk about the Affordable Care Act, I’ve seen too much about broken websites and not enough about those unemployed and low-wage workers who need healthcare.

That’s where McDonald’s comes in. As an American institution, McDonald’s helps us think through this puzzle of access to affordable health care and labor.

McDonald’s made headlines a few months ago when the company partnered with Visa and distributed a suggested budget for their $8.25 an hour employees. The idea was to help low wage employees with their finances, but they budgeted just $50 a month for heat, $20 a month for healthcare, nothing at all for food, and $600 for rent (see it here). According to CBS the average apartment rent in the U.S. is $1,231, and the in the ten most affordable U.S. cities rent ranges from $623 to $730—still more than the rent budgeted by McDonalds and Visa. 

Should a full-time job allow an employee to afford basic necessities? If McDonalds and Visa cannot budget out a life for low-wage workers how can anyone?

The answer to making the math work for basic necessities is found in federally funded assistance. An advocacy group, Low Pay is Not Okay, is making headlines for a recorded phone call in which a McDonald’s employee of ten years is encouraged to file for Food Stamps (aka Supplemental Nutritional Assistance Program, or SNAP) and Medicaid (the federally- and state-funded healthcare program for people with low income). 

According to “Fast Food, Poverty Wages,” a new report from the Berkeley Labor Center, over 50% of fast food workers use programs like SNAP, Medicaid, and the Children’s Health Insurance Program. These are not teenagers living with their parents. Almost 90% of minimum wage workers are not teenagers looking for an afterschool gig, but adults over 20. (Take a look at the Low Pay is Not Okay video, and for more discussion see Time magazine).

There have been similar efforts to raise awareness about the low wages at Walmart—the largest employer in the U.S. They too have attracted grassroots advocacy for better pay. (See Jobs for Justice and Our Walmart’s campaign.)

What is the connection between low wage work and healthcare? While McDonalds and Walmart make huge profits and pay workers the minimum amount, society at large foots the bill for these employees’ healthcare: Through taxes we all pay for these companies’ profits by subsidizing minimal living conditions for working class folk. It is almost comically ironic, if it weren’t tragic, that institutions like Medicaid are needed for profits.

How can we put this both a broader perspective and a more personal one?

First, you can see a new documentary called Inequality for All, which hopes to raise awareness about the rising wealth gap in the United States. Within, you’ll learn that the top 400 Americans make more money than half of the U.S. population and that, in 2012, there is a new historic peak in economic inequality. If you heard that there’s been an economic recovery after the 2008 recession but haven’t felt it, the movie gives you an answer as to why: Almost all the gains of post-recession economic growth have gone to the very wealthy. The top 1% received 95% of the economic gains. 

Second, think about the hard economic choices those who are precariously positioned on the economic ladder.  To virtually experience it for yourself, play this great game called Spent. It is a web-based interactive game that forces players to make everyday choices for folks who make the minimum wage, and offers facts about near-poverty labor along the way.

 If you would like to read more sociology about fast food work there’s Robin Liedner’s Fast Food, Fast Talk, Kathy Newman’s No Shame in My Game and Eric Schlosser’s Fast Food Nation.  And the next time you buy a fast food meal or buy deeply discounted products, think about the larger costs of low prices.

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[Jonathan Wynn]

For more information on Big Corporations (in the case of Fast Food) and their Public Costs, see this report: http://www.nelp.org/page/-/rtmw/uploads/NELP-Super-Sizing-Public-Costs-Fast-Food-Report.pdf?nocdn=1