Good Jobs Seattle
Seattle Fast Food Fact Sheet
Across the Seattle metro area, approximately 33,000 workers work in fast food. 1 There
is one fast food job for every two aerospace jobs in the region, and one fast food job
for every three IT positions. 2 These workers earn poverty wages while wearing the
uniforms of some of the world’s best known brands, like McDonald’s, Burger King, and
Taco Bell.
Fast food is the lowest-paying job in the country and in Seattle:
✦ The median hourly wage for Combined Food Service and Preparation Workers,
Including Fast Food, is $9.50 an hour in the Seattle metro area. That is one of
the lowest of any occupation in the region—lower than home health aides
($11.63 an hour), maids and housekeepers ($11.30 an hour) and child care
workers ($10.74 an hour).3 Nationally, the median wage for fast food jobs is
$8.78 an hour, lower than all other reported occupations.4
In our outreach, few fast-food workers in Seattle report making close to the
median wage of $9.50 per hour, instead reporting making minimum wage
($9.19) 5 or close to it.
✦ Nationally fast-food workers work only 24 hours a week on average, further
reducing their low wages. 6 A 24-hour-a-week worker making the Seattle
median fast-food wage of $9.50 an hour would earn only $11,856 in a year. At
minimum wage, that number falls to $11,469. By comparison, the poverty line
for a 1-person household is $11,490.7
✦ Almost a quarter of all jobs in America now pay wages below the poverty line for
a family of four. 8
Fast-food wages don’t support even small families:
✦ An economic model developed by MIT researchers puts the living wage for
Seattle at $20.53 an hour for an adult with one child, or approximately $42,700
per year.9 This means that fast food workers on average earn only 28% of the
wages they need to survive in Seattle.10
“McJobs” are growing in Seattle:
✦ Retail and hospitality/food service sectors are projected to grow by 10% in the
Seattle region, adding 22,000 jobs by 2020.11
✦ The main fast-food occupation, Combined Food Service and Preparation
Workers Including Fast Food, is projected to grow by 14% or nearly 3,000 jobs
by 2020 in the Seattle Metro Area.12
✦ Job growth among most well-paying occupations in leading Seattle area
industries like aerospace and IT are projected to grow at a rate less than the rate
1
Good Jobs Seattle
Seattle Fast Food Fact Sheet
of fast food jobs. For instance, job growth among aerospace engineers in the
Seattle area is projected to grow by approximately 280 jobs by 2020, only 10%
of the projected job growth in fast food jobs.13
✦ The Bureau of Labor Statistics estimates that nationwide, 7 out of 10 growth
occupations over the next decade will be low-wage –like serving customers at
big-box retailers and fast-food chains.14
Low wages and cost of living in Seattle:
✦ Nearly 35% of residents (more than 205,000 people) who live in the city of
Seattle pay more than 30% of their income in rent.15
✦ Adding transportation costs, 49% of the population, or one in two residents in
Seattle (291,600) pays more than 45% of their income on rent and commuting,
the threshold considered affordable.16
✦ One in five residents in Seattle would have to pay 50% of their income to afford
the average one bedroom rental price of $1180 per month. 17
✦ More than one in four Seattle workers (58,000 people) can’t afford the average
one bedroom apartment in Seattle, because they would have to pay more than
30% of their income in rent.
✦ Nearly 13% of Seattle workers, if they are single, would qualify for food stamps.
✦ More than 25% of Seattle workers, who make less than $35,000 per year, would
qualify for SNAP benefits if they have two children.
SNAP Income
Household
Size
1
Limits (2012)
Monthly
Income
$1,916
18
Annual
$22,992
2
$2,586
$31,032
3
$3,256
$39,072
4
$3,926
$47,112
5
$4,596
$55,152
Source: Foodhelp.wa.gov
Chains reap big profits:
The big chains are profitable and have recovered from the recession, reporting higher
revenues, fatter operating margins and more cash than before the financial crisis.19
2
Good Jobs Seattle
Seattle Fast Food Fact Sheet
2012 Domestic Revenue, Profits & CEO Pay at major fast-food corporations:
Domestic
Total CEO
CEO to Worker
Revenue
Total Profit Compensation
Pay Ratio
Yum! Brands
(Taco Bell, KFC, $3.35 billion $1.59 billion $14.16 million
1194:1
Pizza Hut)
McDonald's $8.81 billion $5.46 billion $13.75 million
1160:1
Domino's
$1.28 billion $112 million
$9.16 million
773:1
Burger King
Wendy's
$1.26 billion $117 million
$2.23 billion $7 million
$6.47 million
$5.89 million
20
546:1
497:1
✦ For example, McDonald’s made $5.46 billion in profits in 2012, a 27% increase
in profits over five years.21
✦ It would take a minimum-wage full-time worker (making an annual salary of
$19,115) more than 740 years to earn as much as the YUM! Brands CEO made in
2012 ($14.16 million).22 Meanwhile, Wendy’s paid its CEO nearly as much as it
made in profits in 2012.
Chains profit from system that leaves workers squeezed:
McDonald’s and the other chains don’t operate the vast majority of their stores
themselves; most fast-food restaurants are franchises.23 The chains sell the rights to
operate a Burger King, Domino’s, or other location to individuals or smaller companies
– the franchisees. But after the franchisee buys a McDonald’s or Pizza Hut, the chain
keeps making money off them and retains significant control. The chains receive
royalties of typically 4-5% on every burger or pizza purchased. They also often require
franchisees to pay another few percent of revenues into advertising funds,24 and in
some cases are the landlords of restaurants.25 McDonald’s franchisees pay McDonald’s
some 10% of their gross sales as rent on top of the 4% they pay in royalties.26
The chains set product offerings and may control suppliers or sell supplies directly to
franchisees,27 set restaurant hours and control prices and promotions.
The chains take their cut off the top of every sale to reap billions in profits, leaving
workers squeezed at the bottom - left with minimum wages and part-time hours that
keep workers and their families in poverty.
3
Good Jobs Seattle
Seattle Fast Food Fact Sheet
Estimate from US Census County Business Patterns, 2010 for Limited Service Restaurants
(NAICS 722211) and Snack and nonalcoholic beverage bars (NAICS 722213).
1
Cluster Employment. Greater Seattle Data Sheet, accessed May 16, 2013 from: http://
www.seattle.gov/oir/datasheet/economy.htm. Data from 2009 from Puget Sound Regional
Council shows approximately 84,000 Aerospace jobs and 109,000 in IT. More data available at
psrc.org
2
3U.S.
Bureau of Labor Statistics. May 2012 Occupational Employment Statistics for SeattleBellevue-Everett MSA. Accessed May 16, 2013 from http://www.bls.gov/oes/current/
oes_19820.htm#35-0000
4U.S.
Bureau of Labor Statistics. May 2012 National Occupational Employment and Wage
Estimates: United States. Accessed May 16, 2013 from http://bls.gov/oes/current/oes_nat.htm
5
http://www.dol.gov/whd/minwage/america.htm#Washington
Production and nonsupervisory workers in U.S. limited-service restaurants worked an average
of 24.1 hours a week in 2011, and average hours in the industry have not gone above 24.7
hours a week for at least the last 10 years. See BLS, Current Employment Statistics survey,
hours, limited-service restaurants (NAICS code 722513), series ID CEU7072251307. Neither BLS
nor the New York State Department of Labor maintains hours data for the fast-food industry for
New York State, the New York City metropolitan area or for New York City.
6
US Census (2012) Federal Poverty Guidelines. Accessed from: http://aspe.hhs.gov/poverty/
13poverty.cfm#guidelines
7
8
http://www.huffingtonpost.com/robert-reich/union-membership-rate_b_2572819.html
Living Wage Calculation for King County (2012): http://livingwage.mit.edu/counties/53033.
More household variations available at the website. Accessed May 1, 2013. Annual wage
calculated by multiplying $20.53 by 2080, the number of hours worked by a full time employee
per year, to get $42,700.
9
10
$11,856/$42,700 = .277 = 27.7%
Washington Industry Control Totals for Occupational Employment Projections, May 2012, WA
Employment Security Department: https://fortress.wa.gov/esd/employmentdata/reportspublications/industry-reports/employment-projections
11
Washington State Employment Security Department. Long-term Occupational Projections.
Accessed May 16, 2013 from https://fortress.wa.gov/esd/employmentdata/reportspublications/industry-reports/employment-projections
12
Washington Industry Control Totals for Occupational Employment Projections, May 2012, WA
Employment Security Department: https://fortress.wa.gov/esd/employmentdata/reportspublications/industry-reports/employment-projections; Aerospace Engineers: Occupational
Outlook Handbook, Bureau of Labor Statistics, accessed from: http://www.bls.gov/ooh/
architecture-and-engineering/aerospace-engineers.htm
13
14
http://www.huffingtonpost.com/robert-reich/union-membership-rate_b_2572819.html
4
Good Jobs Seattle
Seattle Fast Food Fact Sheet
Housing affordability considered 30% or less of Area Median Income, or approximately
$19,266 for Seattle MSA. Source: Seattle-Tacoma-Belleview, WA: Housing and Transit
Affordability Index. 2012. Center for Neighborhood Technology. Accessed from: http://
htaindex.cnt.org/map/
15
Transit/commuting affordability considered 15% or less of Area Median Income, or
approximately $9612 for Seattle MSA. Source: Seattle-Tacoma-Belleview, WA: Housing and
Transit Affordability Index. 2012. Center for Neighborhood Technology. Accessed from: http://
htaindex.cnt.org/map/
16
Using City of Seattle income estimates chart, and rent estimate from: http://
www.apartmentratings.com/rate/WA-Seattle-Pricing.html
17
18
http://foodhelp.wa.gov/basic_food.htm
19National
Employment Law Project, “Big Business, Corporate Profits, and the Minimum Wage,”
http, p. 6.Based on NELP analysis of corporate data in Standard & Poor’s Capital IQ database.
Revenue and Profits: SEC filings for each corporation; CEO Compensation: Most recent SEC
Form 14A for each corporation.
20
21National
Employment Law Project, “Big Business, Corporate Profits, and the Minimum Wage,”
July 2012. http://nelp.3cdn.net/e555b2e361f8f734f4_sim6btdzo.pdf p. 4.
Based on the WA minimum wage of $9.19 per hour. We know that few workers work full time
however, so the number of years is probably much larger. At 24 hours per week and annual
salary of 11,856, it would take nearly 1200 years.
22
23Nation's
Restaurant News, Top 100, June 25, 2012, p. 54
24
KFC Franchise Disclosure Document, Item 6, Other Fees.
25
McDonald’s Franchise Disclosure Document, Item 6, Other Fees.
26McDonald’s
Franchise Disclosure Document, Item 6, Other Fees lists royalties (services fees) at
4%. Total rent and fees franchisees pay to McDonalds are 14.5% of revenues, according to Mark
Kalinowski, Janney Montgomery Scott, “MCD: A “Typical” U.S. Franchised Restaurant’s Annual
Income Statement,” February 8, 2012. Rent is thus, on average, just over 10%.
Domino’s Franchise Disclosure Document, Item 1, The Franchisor, and any Parents,
Predecessors, and Affiliates.
27
5