It's long been clear that American taxpayers are subsidizing the fast food industry because so many of its low-paid workers end up needing some form of public assistance. But banks? Banks are one of the nation's most profitable businesses. They pay top executives huge sums. Why is it that nearly a third of bank tellers rely on government benefits of one kind or another to keep their families afloat? The low pay in too many areas of the private sector essentially transfers responsibility and costs to the public sector that are paid by taxpayers instead of business.
America's widening income inequality is largely due to industries such as banking that bring in billions of dollars in profits but pay low wages to rank-and-file employees. According to a recent report from the Committee for Better Banks, a coalition of labor advocacy groups, the median annual income for a bank teller in the United States is $24,100, or $11.59 per hour, an amount so low it qualifies 31 percent of the nation's half-million bank tellers and their families for a range of government benefits.
The report says that when all those benefits are added up, including the Earned Income Tax Credit, Medicaid, children's health insurance, the Supplemental Nutrition Assistance Program (food stamps) and other forms of welfare, it costs taxpayers nearly $900 million a year. The public perception of bank tellers may be that they have middle-class jobs, but every year bank tellers rely on $105 million in food stamps to help feed their families.
Meanwhile, the median salary for a banking chief executive is about $550,000 and within the industry there are some eye-popping pay packages. Bank of America CEO Brian Moynihan received $12 million in 2012.
This doesn't just happen. It is the culmination of industrial policies that have allowed the economy's gains to enrich those at the top without being fairly shared with employees who work lower-rung jobs. More than half of families of fast food workers receive some form of public assistance, costing American taxpayers $7 billion annually, according to a study by the University of California Berkeley Labor Center and the University of Illinois. Workers need the ability to seek reasonable compensation and decent benefits as a reward for hard work, or increasingly the government — meaning taxpayers — will have to step in to make up the difference.
Raising the minimum wage from the current $7.25 per hour ($7.93 in Florida starting Jan. 1) to $10.10 per hour has been proposed by Democrats in Congress and is supported by President Barack Obama. But it should appeal to conservatives as well. Working parents gain pride and independence when they are able to provide for their children rather than be forced to rely on government safety net and entitlement programs. Workers who make a decent living become taxpayers and homeowners, which brings stability to communities. And experience shows that modest increases in minimum wages have little or no significant impact on employment levels.
Most bank tellers earn more than the minimum wage, but a raise for workers at the very bottom can help raise wages up the income ladder. Taxpayers have a stake in making work pay fairly, but it will only happen if government insists that government stop subsidizing private enterprise.