Since the president’s reelection earlier this month, four large restaurant chains, Papa Johns, Applebee’s, Denny’s and Darden Restaurants (the company that owns the Olive Garden, Red Lobster, and LongHorn Steakhouse chains) have all recently released statements about their companies’ plans to respond to the increased costs of complying with Obamacare regulations.According to Mandel, it's coming as a bit of a shock to the left that Obamacare has severe economic consequences for lowly employees, but, of course, it does:
According to the healthcare law, every full-time employee must be provided with comprehensive medical coverage if the company employs more than 50 full-time workers. If a company refuses to comply, they will be faced with fines of $2,000 per year, per employee, as of January 1, 2014.
Appearing on Fox News Business early last week, Applebee’s CEO Zane Tankel explained the steps his business would have to take in order to stay in operation:This would be devastating to many of those workers, however:
The costs of fines or healthcare for dozens of employees per restaurant have the potential to bankrupt individually owned chains across the country. The Applebee’s in New York City would face fines of $600,000 per year if insurance isn’t provided for full-time staff, and estimates for offering federally approved insurance would cost “some millions” across the Applebee’s system.
The restaurant industry, already operating with razor thin margins, doesn’t have the ability to absorb tens of thousands more in healthcare expenditures without a considerable increase in sales. It’s a basic realty of economics: more has to be coming in than going out.
The only solution for restaurants that want to stay open and maintain competitive pricing would be to cut employee hours to part-time status. This is the conclusion already reached by several large chains–companies that provide jobs to tens of thousands of working class Americans.
If workers are moved to part-time status, the onus for paying for insurance would then be placed on employees who have suddenly seen their incomes reduced drastically. Another provision of Obamacare is the requirement for Americans to purchase insurance or face a financial penalty, a tax as defined by the Supreme Court.Nancy Pelosi said that we had to pass Obamacare in order to find out what's in it, and she rammed it through the House of Representatives without a single Republican vote. Now it's the law and we're starting to discover what's in it. Inter alia, the very people the Democrats claim to care so much about - young, poor, single moms struggling to make ends meet for their children - are going to get clobbered. They shouldn't feel too bad though. They can take comfort in knowing that liberals care about them.
Some of these employees may qualify for Medicaid and would be exempt from the tax specifically designed to compel Americans to purchase insurance, regardless of their desire to do so. Cash-strapped states would then be on the hook for expanding Medicaid in order to fulfill the needs of the estimated 11-17 million Americans newly enrolled on Medicaid thanks to Obamacare.
These workers, directly pushed further into poverty by Obamacare via reduced hours would then be enrolled in a system with the worst healthcare outcomes in the country, including the ranks of the uninsured. The costs of providing millions more with insurance would then be passed on by states unable to afford the Medicaid loads they already have. As a result, residents should expect fewer services from their states or higher taxes, if not both.