Los Angeles Times • Michael Hiltzik
The Carl’s Jr. and Hardee’s restaurant franchises headed by Andrew Puzder, President Trump’s Labor secretary nominee, are among the nation’s major employers of low-wage workers. As Puzder faces a confirmation hearing scheduled for Feb. 2, it’s proper to examine how much his industry’s employment practices cost the American taxpayer. It’s a bundle.
A 2013 study by the Center for Labor Research and Education at UC Berkeley found that public assistance for front-line fast-food workers costs roughly $7 billion a year. That’s a subset of the $152.8 billion the federal government spends on support for low-wage working families, according to a separate study.
Puzder’s CKE Restaurants, which owns the Carl’s Jr. and Hardee’s brands, collects a taxpayer-funded subsidy of about $247 million a year, according to an estimate by the National Employment Law Project. That’s what it takes, NELP said, to “offset poverty wages and keep [CKE’s] low-wage front-line workers and their families from economic disaster.”
NELP’s figures are approximations because CKE is a private company and stingy with financial information. The group extrapolated from costs of public services identified by the UC Berkeley labor center, especially for the participation of fast-food workers in Medicaid and the Children’s Health Insurance Program, food stamps, and the earned income tax credit, which carried the greatest burdens of fast-food industry employees. CKE says it doesn’t comment on “employee personal matters” such as enrollment in public programs.
The burdens that low-wage employers shift to taxpayers — think of it as socializing their employment expenses — crop up in public from time to time, usually when a big company is caught steering its workers to public health or welfare programs. In 2009, Ohio officials disclosed that more than 15,200 Wal-Mart employees in the state were receiving Medicaid and 12,700 were on food stamps. Wal-Mart topped the list of Ohio employers with employees in both programs. The company turned an operating profit of $22.8 billion that year.
The issue isn’t only one worthy of short-term concern. It’s important when weighing Puzder’s qualifications to become secretary of Labor, partially because of his hostility to raises in the minimum wage. He told me in March that he isn’t opposed to any increase at all, but to an increase to $12 or $15 an hour, which he described as “the kind of dramatic increases that are being bandied about in the political process right now.”