The Company Store Redux: Are Fast Food Corporations Reinforcing America’s Culture Of Dependency?

The Fast Food Company Store: Are Payroll SNAP Subsidizing and EBT Allowances By Fast Food Companies Reinforcing America's Culture Of Dependency?

Do you know how Wal- Mart became so successful? Well fast food companies are guilty of the same economy-destroying crimes-SNAP subsidizing payroll.
Image Credit: Commons.wikimedia.org

Much ado has been made recently of the news that major fast food corporations like McDonald’s and Taco Bell have been essentially subsidizing their payrolls with government entitlement programs, like food stamps (better known as SNAP) and Medicaid. According to Forbes Magazine, “roughly 52 percent of all fast-food workers are on some form of public aid including food stamps, to the tune of $3.8 billion.” At $1.2 billion in public aid usage, McDonald’s counts for nearly one-third of that spending alone.

There are just over 1.5 million fast food employees in the United States, accounting for roughly $886 million of the $63.4 billion in SNAP spending projected for this year. They will be among the hardest hit by the $5 billion in SNAP cuts that went into effect this past Friday, making it more important than ever that we not only know how that money is being spent, but that we encourage those who are spending it to do so with greater prudence than ever.

The company store gets a facelift

Wal-Mart locations by state, circa 2011.

When it was discovered by Congressional Democrats earlier this year that Wal-Mart was guilty of the same offense as the fast food industry, the company’s ‘infiltrate and conquer’ business model seemed to come full circle: set up shop in an area, use your inordinate buying power and government clout to disrupt the local economy, suck up all the workers whose competition you’ve decimated, pay them substandard wages while the government subsidizes the rest, then scoop up a much higher percentage of that aid money as the only store in town now worth shopping at. It’d be pretty ingenious, if it wasn’t so morally repugnant. The key to this strategy lies in Wal-Mart’s ability to accept payments from entitlement programs like SNAP. The fast food industry can’t do that…or can they?

Courtesy of the USDA’s Food Environment Atlas, circa 2010.

It turns out they can. Today, nearly every major fast food chain in America now accepts SNAP payments through the Electronic Benefit Transfer (EBT) system. For decades now, SNAP purchases have been limited to grocery items only, but thanks to companies like Yum! Foods – owners of KFC, Pizza Hut, and Taco Bell – as well as lobbying giants like the National Restaurant Association, America’s nearly two hundred thousand fast food restaurants are now competing for a piece of the food stamp pie. Given their speed, semblance of variety, and convenience – fast food restaurants outnumber grocery stores by over six to one – the fast food industry stands to give even grocery titans like Wal-Mart cause for alarm.

What’s good for the goose…

Just how effective this model has been so far remains to be seen. According to a June 2012 report published by EatDrinkPolitics called “Food Stamps: Follow The Money,” the USDA is not required to disclose how much individual retailers make from SNAP, nor does Congress require businesses to collect data on SNAP purchases. The report also states that “such data is critical to evaluating SNAP effectiveness as well as to inform policy discussions on how to encourage healthier SNAP purchases.”

However, being that a savvy, well-informed consumer base is bad for business, the unholy conflation between data collection and tyrannical oversight stands firm in this area, preventing the USDA from being able to more effectively do their job. The grocery industry has spent millions, if not billions of dollars lobbying Congress and the USDA to maintain and advance their SNAP agenda. With companies like McDonald’s and KFC lending their voices (and their financial contributions) to that chorus, it would seem that the fast food industry is poised to set up their own company stores, further widening the poverty gap and condemning fast-food employees to a glass ceiling that is as low as it is thick, with the American taxpayer expected to foot the bill.

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