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The Burger Chain That Pays $10 An Hour With Benefits | ThinkProgress
Shake Shack, a burger chain with locations in Florida, New Jersey, New York, Pennsylvania, Washington, D.C. as well as international locations in the Middle East, Russia, Turkey, and the United Kingdom, pays starting workers $9.50 an hour outside of New York City and $10 an hour for New Yorkers, CEO Randy Garutti told ThinkProgress. It also offers full-time employees health, dental, vision, retirement, and disability benefits plus paid time off.
But on average, workers get $10.70 an hour thanks to a program it calls Shack Bucks. Every month, it gives employees a percentage of the company’s top-line sales. “It’s sort of immediate revenue sharing, not a long-term program,” he noted.
The company pays about 70 percent of employees’ health care premiums and also matches contributions to their 401(k)s. He added that he is “more excited” than all of these perks about how many employees move up into manager roles. “There are a lot of people who started making $9 an hour and are now general managers in our restaurants making very good money,” he said. The owners started in fine dining and brought the compensation practices from those restaurants into its original burger and hot dog stand.
And Shake Shack isn’t the only eatery taking this approach to its workforce. Michigan’s Moo Cluck Moo pays entry-level workers $15 an hour, a move its owners say leads to less turnover, better customer service, and more skilled employees. In-N-Out, a West Coast burger chain, pays $10.50 an hour for entry-level employees. Outside of the burger world, Boston-based burrito chain Boloco pays starting workers anywhere from $9 to $11 an hour, which the owner says increases loyalty and productivity and, in turn, profitability.
In light of the conversation to raise the minimum wage, others have decided to join in. Two pizza companies in St. Louis will soon pay at least $10.10 an hour. It has also spread outside of the food industry: clothing retailer The Gap recently announced it will also raise its lowest wage to $10.
But the fast food industry is notorious for low pay, where workers make so little that they consume $243 billion in public benefits each year just to get by.
How Low Wages Cost Taxpayers A Quarter-Trillion Dollars Every Year
Fast food workers are particularly likely to rely on these programs. More than half of all front-line fast-food workers who work at least 30 hours per week are enrolled, compared to 25 percent of the overall workforce. Fast food workers and their families receive $7 billion per year in public assistance, $3.9 billion of it in the form of health care programs like Medicaid and the Children’s Health Insurance Program (CHIP). The fast food workers included in the study were nearly five times less likely to receive health insurance through their work than is typical across the entire economy, at 13 percent compared to 59 percent.
Walmart's Low Wages Cost Taxpayers Millions Each Year
Due to low wages and few benefits, Walmart workers at a single 300-person Supercenter store rely on anywhere from $904,542 to $1,744,590 in public benefits per year, costing taxpayers, according to a new report from the Democratic staff of the House Committee on Education and the Workforce.
The report focused its analysis on Wisconsin, because the state’s data is the most comprehensive and up to date. It looked at how many workers enroll in the state’s Medicaid program and extrapolated how many services they rely on from programs such as the Supplemental Nutrition Assistance Program, Earned Income Tax Credit, school lunch program, Low Income Home Energy Assistance Program, and Section 8 housing vouchers, among others.
Looking at just those currently enrolled in Medicaid, the report estimates that each employee takes in $3,015 in public benefits a year. But that may be a low estimate, as other workers may enroll in other programs. Assuming a higher number, each employee could use more like $5,815 in benefits a year.
Walmart’s wages are some of the lowest in the industry, despite the fact that it is the country’s largest private employer and one out of every ten retail workers is employed there. Workers make $8.81 per hour on average, according to IBIS World, 28 percent less than those who work for other large retailers.
Its employees also get few benefits through their employment. Only about half of Walmart workers are covered by its health care plans, in part because the costs may be to high. While the company decided to expand health care coverage to part-time workers in 2006, it has since reversed course.
Walmart’s model isn’t the only way in the discount retail space, however. Rival Costco, which competes with Walmart’s Sam’s Club stores, pays employees about 40 percent more. The average Costco worker makes $21.96 an hour. Nearly all of the workers who are eligible for the company’s benefits are enrolled.
Costco has come under analyst pressure to lower wages and boost profit, but the company’s CFO has thus far refused to do so. Its bottom line, however, seems strong: Profits rose by 19 percent to $459 million last quarter.
Shake Shack, a burger chain with locations in Florida, New Jersey, New York, Pennsylvania, Washington, D.C. as well as international locations in the Middle East, Russia, Turkey, and the United Kingdom, pays starting workers $9.50 an hour outside of New York City and $10 an hour for New Yorkers, CEO Randy Garutti told ThinkProgress. It also offers full-time employees health, dental, vision, retirement, and disability benefits plus paid time off.
But on average, workers get $10.70 an hour thanks to a program it calls Shack Bucks. Every month, it gives employees a percentage of the company’s top-line sales. “It’s sort of immediate revenue sharing, not a long-term program,” he noted.
The company pays about 70 percent of employees’ health care premiums and also matches contributions to their 401(k)s. He added that he is “more excited” than all of these perks about how many employees move up into manager roles. “There are a lot of people who started making $9 an hour and are now general managers in our restaurants making very good money,” he said. The owners started in fine dining and brought the compensation practices from those restaurants into its original burger and hot dog stand.
And Shake Shack isn’t the only eatery taking this approach to its workforce. Michigan’s Moo Cluck Moo pays entry-level workers $15 an hour, a move its owners say leads to less turnover, better customer service, and more skilled employees. In-N-Out, a West Coast burger chain, pays $10.50 an hour for entry-level employees. Outside of the burger world, Boston-based burrito chain Boloco pays starting workers anywhere from $9 to $11 an hour, which the owner says increases loyalty and productivity and, in turn, profitability.
In light of the conversation to raise the minimum wage, others have decided to join in. Two pizza companies in St. Louis will soon pay at least $10.10 an hour. It has also spread outside of the food industry: clothing retailer The Gap recently announced it will also raise its lowest wage to $10.
But the fast food industry is notorious for low pay, where workers make so little that they consume $243 billion in public benefits each year just to get by.
How Low Wages Cost Taxpayers A Quarter-Trillion Dollars Every Year
Fast food workers are particularly likely to rely on these programs. More than half of all front-line fast-food workers who work at least 30 hours per week are enrolled, compared to 25 percent of the overall workforce. Fast food workers and their families receive $7 billion per year in public assistance, $3.9 billion of it in the form of health care programs like Medicaid and the Children’s Health Insurance Program (CHIP). The fast food workers included in the study were nearly five times less likely to receive health insurance through their work than is typical across the entire economy, at 13 percent compared to 59 percent.
Walmart's Low Wages Cost Taxpayers Millions Each Year
Due to low wages and few benefits, Walmart workers at a single 300-person Supercenter store rely on anywhere from $904,542 to $1,744,590 in public benefits per year, costing taxpayers, according to a new report from the Democratic staff of the House Committee on Education and the Workforce.
The report focused its analysis on Wisconsin, because the state’s data is the most comprehensive and up to date. It looked at how many workers enroll in the state’s Medicaid program and extrapolated how many services they rely on from programs such as the Supplemental Nutrition Assistance Program, Earned Income Tax Credit, school lunch program, Low Income Home Energy Assistance Program, and Section 8 housing vouchers, among others.
Looking at just those currently enrolled in Medicaid, the report estimates that each employee takes in $3,015 in public benefits a year. But that may be a low estimate, as other workers may enroll in other programs. Assuming a higher number, each employee could use more like $5,815 in benefits a year.
Walmart’s wages are some of the lowest in the industry, despite the fact that it is the country’s largest private employer and one out of every ten retail workers is employed there. Workers make $8.81 per hour on average, according to IBIS World, 28 percent less than those who work for other large retailers.
Its employees also get few benefits through their employment. Only about half of Walmart workers are covered by its health care plans, in part because the costs may be to high. While the company decided to expand health care coverage to part-time workers in 2006, it has since reversed course.
Walmart’s model isn’t the only way in the discount retail space, however. Rival Costco, which competes with Walmart’s Sam’s Club stores, pays employees about 40 percent more. The average Costco worker makes $21.96 an hour. Nearly all of the workers who are eligible for the company’s benefits are enrolled.
Costco has come under analyst pressure to lower wages and boost profit, but the company’s CFO has thus far refused to do so. Its bottom line, however, seems strong: Profits rose by 19 percent to $459 million last quarter.
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