OP-ED: The Economy Is Binging on Fast Food and Low Wages—and It Needs to Change

by Mike Evangelist

Fast-food workers are walking off the job in 150 U.S. cities today to demand a raise in pay, in the latest demonstration of discontent with the low-wage jobs that have become the new normal in today’s economy.

The economy has added jobs slowly and steadily since the labor market downturn ended just over four years ago, but the new jobs are concentrated primarily in lower-wage industries, according to a recent study by the National Employment Law Project.

Our study tracked private-sector job losses during the recession and job gains during the recovery. We found a striking imbalance: Mid- and higher-wage industries (e.g., manufacturing and construction) were hit hardest during the downturn, accounting for more than three-quarters of the nearly 8.8 million jobs lost. On the other hand, lower-wage industries—particularly food services, retail, and administrative support services—have seen the greatest gains over the recovery.

This unbalanced growth means that today, lower-wage industries employ 2 million more workers than at the start of the recession, while mid- and higher-wage industries each employ about 900,000 fewer workers. The food services industry has seen exceptional growth, adding 1.3 million jobs over the past four years, driving industry employment nearly 10 percent higher than it was at the start of the recession.

Simply put, many of the better-paying jobs we lost have not come back. In their place, we’re seeing a rise in low-paying jobs, like those in fast food (a subset of food services).

A typical worker in the food-services industry—the lowest paying in our study—can expect to earn little more than $9 an hour, or less than half the median wage in construction or durable manufacturing. In addition to earning low wages, frontline workers in the fast-food industry lack access to basic benefits, such as employer-provided health care. Contrary to industry claims that fast-food workers are mostly teenagers, 70 percent are adults age 20 and older, more than one-third of whom are raising children.

Also alarming, U.S. taxpayers are footing the bill for the fast-food industry’s low-wage, no-benefits business model, which forces employees to rely on public assistance to make ends meet. More than half the families of frontline fast-food workers must rely on one or more public-benefit programs, such as food stamps or Medicaid. The cost of low wages is being shifted to taxpayers; it amounts to a public subsidy of fast-food industry profits to the tune of $7 billion a year.

Employment growth in low-wage industries will continue, but there’s no immutable law of economics that requires these jobs to be bad jobs—any more than dirty and dangerous manufacturing jobs in the 20th century were destined to be bad jobs. Instead, as the economy continues to recover and evolve, the fast growth of lower-paying positions and the rising numbers of adults in those jobs underscore the need to boost wages and raise the floor for all workers. Fast-food workers are calling for $15 an hour and the right to unionize. Considering the billions in profits that the fast-food giants are raking in, these corporations can afford to share more of their wealth with frontline workers.

Lawmakers in Congress should be doing their part to strengthen the economy from the ground up by raising the federal minimum wage, which has been stuck at $7.25 since 2009. Raising the federal wage floor to $10.10 an hour would help alleviate hardship for nearly 30 million workers.

As fast-food workers around the nation stand up to demand a living wage today, let’s be clear about this: We cannot afford an economy where people who work for a living cannot make a living from their work. Low-wage jobs are fast becoming the core of our economy. We need to improve these jobs, and we can start by raising pay.

Mike Evangelist is a policy analyst with the National Employment Law Project and author of the report, The Low-Wage Recovery: Industry Employment and Wages Four Years Into the Recovery.