Fast food isn't the only part of the restaurant industry where workers are seriously underpaid. A recent report
from the Restaurant Opportunities Centers United shows that many workers in full-service restaurants are also paid so little that they need and get nearly $9.5 billion in public assistance each year. And as in fast food, we're talking about large, profitable chains: Darden, the parent company of Olive Garden, LongHorn Steakhouse, Capital Grille, and more; Dine Equity, the parent company of IHOP and Applebee's; Bloomin' Brands, the parent company of Outback Steakhouse, Carraba's Italian Grill, and more; Brinker International, the parent company of Chili's; and Cracker Barrel. Workers at these five chains need an estimated $1.4 billion from programs including the Earned Income Tax Credit, Medicaid and the Children's Health Insurance Program, the Supplemental Nutrition Assistance Program, and heating and housing assistance.
These five companies spend millions on lobbying—with one key priority being to keep the tipped worker minimum wage at $2.13 an hour, where it's been stuck for decades. Meanwhile:
The ROC report frames public assistance to workers at these restaurant chains as taxpayer subsidies for the chains' low wages; it's a powerful argument, but one that the respected economist Arindrajit Dube is arguing doesn't hold up
as applied to programs that aren't tied to labor force participation or hours worked.
I'm not sure I'm 100 percent on board with Dube's argument, but in any case we don't need the taxpayer subsidy argument to see the hundreds of millions of dollars in public assistance needed by workers at these profitable chains as an indictment of their wages and labor practices. It's as simple as this: If a profitable company is paying its workers hundreds of millions of dollars a year less than they need for the most basic medical care, food, and housing, that company is a driving force in the low-wage economy. You don't need to believe that the public assistance going to their underpaid workers is a direct subsidy to the companies to see something wrong with that.