ObamaCare Leaves Restauranteurs with a Bad Taste

Daniel J. Flynn is the author of numerous books, including "Blue Collar Intellectuals: When the Enlightened and the Everyman Elevated America," now available from ISI Books. Read Daniel's blog at www.flynnfiles.com.


Stiffed waitresses know there’s no such thing as a free lunch. They may soon learn there’s no such thing as free health care, either.

It’s newsworthy that ObamaCare proponents find a businessman’s proclamation that he intends to comply with the law newsworthy. Dean Hodges, the owner of 18 Jimmy John’s franchises West of the Mississippi, emailed the Huffington Post that he will seek to provide insurance to his uncovered full-time employees. “I’m trying to save for it and plan for it so I can comply with the government, provide health care, and still pay for it,” the sandwich shop proprietor wrote.

Doesn’t highlighting this man-bites-dog story paradoxically affirm that businessmen regard the signature legislation of the present administration as hostile to their livelihood? Restaurant proprietors, whose slim profit margins often revolve around such seemingly petty matters as napkins used and ketchup consumed, have reacted negatively to the increased overhead of insuring employees who work 30 or more hours a week that the Affordable Care Act mandates. Despite its name, the food service industry isn’t finding the law very affordable.

Darden Restaurants, the largest U.S.-based restaurateur, has begun experimenting with limits on employee hours in four markets. The owner-operators of Olive Garden, Longhorn Steakhouse, and Red Lobster released a statement to the Orlando Sentinel affirming that limiting employee hours is “just one of the many things we are evaluating to help us address the cost implications health care reform will have on our business. There are still many unanswered questions regarding the health care regulations and we simply do not have enough information to make any decisions at this time.”

John Metz, owner of dozens of Denny’s, Dairy Queen, and Hurricane Grill & Wings franchises, discussed imposing an ObamaCare surcharge on meals to defray costs—and to not hide them within the bill.  He points out that “to pay $5,000 per employee would cost us $175,000 per restaurant, and unfortunately, most of our restaurants don’t make $175,000 a year. I can’t afford it.” To avoid the added burden of ObamaCare insurance dictates on employers regarding full-time employees, Metz plans to cut back on hours. “It’s ridiculous that the maximum hours we can give people is 28 hours a week instead of 40,” Metz told the Huffington Post. “It’s going to force my employees to go out and get a second job.”

Zane Tankel, CEO of Apple-Metro, said on the Fox Business Network that under a best-case scenario he would have to engage in minimal layoffs at his 40 Applebees franchises in New York because of the health-care overhaul. “We’ve calculated it will be some millions of dollars across our system,” Tankel explained. “So what does that say? That says we won’t build more restaurants. We won’t hire more people—exactly the opposite of what the president says.”

Even Dean Hodges of Jimmy John’s concedes that conforming to the law’s provisions won’t be easy. Hodges notes that just 38 of his 550 employees currently receive health-insurance benefits. He estimates that ObamaCare will compel him to insure another 150. “If I add 150 people to the same plan, we’re talking over $500,000 in premiums. Ten of my 18 stores would become unprofitable…. if I’m unprofitable I can’t go on, I can’t exist, and I can’t employ anyone.”

And unemployment, which has been the nagging concern of millions of Americans during Obama’s first term, figures to get worse in the second administration because of the implementation of the health-care legislation. The unemployment rate exceeded eight percent for 43 months during Obama’s first administration. It exceeded eight percent for just 39 months during the previous 60 years. Put another way, the total amount of time the unemployment rate stayed above eight percent under Presidents Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush I, Clinton, and Bush II doesn’t rise to the amount of time it spent above that mark during President Obama’s first term.

Like the infinite extension of unemployment insurance and the various stimulus boondoggles, ObamaCare offers perverse incentives regarding employment that planners overlooked. Because the Obama Administration didn’t plan for it, business owners, like Dean Hodges of Jimmy John’s, have to.

Will forcing health-care costs on sub shops inflate the cost of a sandwich? Depress the wage of a sandwich maker? Knock workers off the payroll and onto the dole? Put taxpayers on the hook for the health care of the unemployed? Turn the franchise owners’ profits into losses?

The questions weren’t asked when bureaucrats formulated the legislation. They will be answered once they implement it.

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  • Mary Sue

    You know, this almost sounds like Obama's doing this on purpose to destroy employment. (OH wait, it PROBABLY IS!)

    They'd have done a lot better if they REALLY wanted health care, to just plagiarize the Canada Health Act.

    • kafir4life

      As President Stinky (BO) destroys this country's health care system, where will Canadians go when they need health care? Tator Schumer didn't like the question. Didn't think it was "fair".

      • Mary Sue

        Oh yeah, I was saying that ever since they brought up "HilaryCare" back in the 1990s. We'd have to go to *gasp*…Mexico? *shudder*

        • Parenthetical Phrase

          That is exactly what is going to happen. People already buy their prescription drugs there — why not the inferior but cheaper healthcare? Those with a little more money, though, will go to Costa Rica and India. I'd also include Israel but in two years Israel will no longer exist.

          • Mary Sue

            I'm pretty sure it will, or at least it had better.

          • Mary Sue

            (I'm sure israel will exist still)

          • Chris

            Not if Obama can help it.

          • Mary Sue

            He better be impeached by then.

  • rlqretired

    Secretary Sebelius powers to write the rules and regulations are so broad there is no way for business owners to win. She will simply change the rules. Obama is going to get his total gov. takeover one-way or the other. Speaker Boehner is the only person with the power to defund this madness and he is a useless and gutless COWARD afraid he will be called a Racist.

  • davarino

    Uh, four more years of this. Who knows it could be more. I guess I ought to tiddy up my house and get it ready for the next tenant, like in the movie Dr. Zhivago. I'll just go live out in the country and act like I'm uneducated so I dont get executed or sent off to the re-education camps.

    Its to bad we dont have a buffer in the republican party, but it looks like we're being sold out.

    • Lucifer Dye

      That's right, Davarino, go tiddy your house — whatever that means.

  • Snorbak

    I fail to understand why an employer should be responsible for an employee's health care. Why not just place a levy of say 5% (Medicare in Australia) on an employee's income regardless of earnings. Whilst the Australian healthcare system isnt perfect, your healthcare system is a joke.
    Having breifly looked at this Obamacare rubbish, all I see is another ill thought (pun intended) nail in the US financial coffin. Obama is destroying your country faster than any single person in US history.

    • http://twitter.com/Genesyn @Genesyn

      Because the same people who in this article are crying about the cost of healthcare to their employees won't allow us to have a levy or single payer system because "Freedom". We have no other choice than this at the moment until the GOP and Robber Barons come the the realization that the rest of the world has that healthcare is a RIGHT, not a PRIVILEGE for a civilized society.

      • Hairy Reed

        You have a right to someone else's labor? You have a right to what someone else had produced?

        Keep on foaming at the mouth & ranting. Soon the Democrats will tell you what job you can have. Then they will say all your descendant must also work in those jobs. Fortunately for them their children will have to be in leadership jobs. Imagine that.. It has happened before & will happen again.

        Go to celebrity net worth & see what your benevolent Democrat leaders are worth.

        • Jim_C

          In the system we currently have, minus the effect of the ACA which has not taken place, the providers you are talking about will STILL get the shaft (which then shafts the patients), thanks to the machinations of insurance companies, who are essentially rationing care. Mind you, this is BEFORE the ACA has taken effect, and it is something the industry had been expecting for the last ten years.

          Our system sucks. We have great health CARE–but our system SUCKS. It was screwed LONG BEFORE the ACA. The ACA mitigates some of the screwedness and exacerbates other parts.

          Our costs are TWICE any comparable country's, and rising. It has been that way for a long time. So 'hurray for freedom,' make sure you stay healthy!

          I am not comfortable with using the term "right" to describe health care, in fact I disdain to do so for exactly the reason you state. But the OP is more correct, and more reality based, than you are.

      • ebonystone

        "the rest of the world" — You mean like Cuba, China, N. Korea, where quality health care is available only to the nomenklatura, or about 2% of the population. Or maybe you mean like India, Pakistan, Nigeria, the Congo, et al. Face it, only a small part of the world has government-provided health care. And often that care is of dubious quality. Witness the hundreds of Britons who died last year in hospitals from starvation. Or witness the thousands of Canadians who race across the border to the U.S. to get medical tests and procedures done on a timely basis.

        • Jim_C

          For every negative anecdote you can levy against an industrialized nation's universal care, there are 100 positive anecdotes. But at bottom, I agree with you: I do not want government-run health care.

          But I do want government-mandated universal care, and I want controls at a basic level of cost and services. In other words, I want what the Swiss or Singapore has: mandatory health care, funded by private insurance companies who are not allowed to profit at a basic level of care. However, these companies can compete to provide additional "boutique" coverage at a profit, so consumers have choices that fit their needs and their budgets. The well-off, then, can still get exceptional levels of care, but the poor are not left out in the cold.

  • Wumingren

    In 1982 on an ocean ferry from Okinawa, Japan, to Keelung, Taiwan, I met a group of three Swedes who were out seeing the world as students. We struck up a conversation, and when they discovered I was an American, they shifted our mundane travel talk to healthcare. They implored me to do everything I could to see that America did not ruin its healthcare system. At the time, I hardly knew what they were talking about, because until then I had been in the military and stationed overseas for 12 years. Now I know what they were talking about, but back then I didn't have a clue. They got quite animated and earnest about it, saying there would be no place else to go to get good healthcare when needed. These guys were alarmed that America would adopt a Swedish-style national healthcare system, the same system the liberals have been holding up as a shining example of how it's supposed to be done, the same system that was failing the Swedes, but which the liberals blindly continued to praise. What is it with liberals that they can so easily deny the realities that are poking them in the chest every stinking day?

    • davarino

      They dont have to live by the same set of rules they foist on us. Its not that they deny the realities, its that they are exempt and can fool the rest of us. Actually, I guess I shouldnt say they fooled us. The truth is a majority didnt want it but it got shoved down our throats. Lovely

    • Jim_C

      It's a little ironic that you were receiving government healthcare at the time of your conversation, which is why you didn't know what they were talking about.

      I am not a proponent of government run health care but veterans like their system, don't they?

  • http://twitter.com/Genesyn @Genesyn

    So we should leave the system in place where if someone gets ill, they can end up bankrupt and ruined? That's a good plan, yeah.

    • davarino

      Now they wont get the high tech healthcare they will need anyway because the system will deem it to expensive. That's a good plan, yeah.

    • JoJoJams

      No one "ends up bankrupt". My wife had many issues, mental and physical – and we paid many a hospital bill. However, there was one that she got pissed at and stopped paying. It went to a collection agency, and due to her issues and income (mine didn't matter – bill was in her name and from before we got hitched) she literally paid them 1 dollar a month, on the 11k debt she owed. And there was nothing they could legally do about it. The canard of "going bankrupt" from a medical event – no matter how high – is falacious. They can only collect what you can afford to pay. Sure, my wife milked the sysetem and played "the game" – And so can anyone.

      • Jim_C

        And so your wife had no consequences from not paying her bills?

        And the providers: did they get paid for providing the service? Or just dinged when costs when up or their reimbursement went down because people like your wife wasn't paying?

    • Mary Sue

      move to Canada if that is what you are concerned about.

  • Chapoter 7 & 11

    Mike Becker @Genesyn
    There is a big difference between catastrophic health care coverage & what Obama Care is.

    What Democrats did not try was to get rid of the barriers the prohibit health care companies from competing across state line. These were erected around WW2.

    Also various state legislature mandate what health care coverage must have. You cannot choose.

    Ruined? You can discharge bankruptcy in 7 years. You can discharge it immediately depending what chapter you file under.

  • http://frontpagemag jose

    Free stuff is not a right you stupid moron.

  • pierce

    ObamaCare, Obama is beginning to leave a bad taste in my mouth. Now he is out campaigning for higher taxes, and trying to embarrass Boenher and the Republicans into raising taxes, why not cut spending, and I don't mean just cut, slash spending, cut entitlements, act more responsibly. The people may have reelected you, but just maybe, they thought you might mellow a bit. After all you did not have a monstrous mandate.
    Of course you, with your huge ego, would consider a 1 vote win as a mandate. God help us if you get your way, as this country is on a collision course with disaster, you and your fellow Democrats.

    • Jim_C

      No one wants to be the politician who cuts entitlements, which, after all, people have paid for and are therefore entitled to. I note Mr. Obama's opponents are conspicuously silent on their slashing.

      I'm not saying you're wrong; I think it's a no-brainer that we can't continue to spend as we have been for the last 10-15 years. Problem with cuts is no one wants their pie piece taken away–especially seniors, who worked and paid for these things, and who vote.

  • pyeatte

    Two or more food establishments could swap workers around during a given week so that all employees would get 40 or more hours a week but no more than 28 hours with any single employer.

  • Parenthetical Phrase

    I'd bet every dime I own that 100% of restaurant workers voted for Obama and rejoiced at the passing of Obamacare. Now is the time they get to learn about the law of unintended consequences. I don't feel sorry for them but I know it will hurt everyone — not just them. Oh well, such is the price of enlightenment.

    • Mary Sue

      well at least 99.99999 (repeating) %. Maybe one or two would vote Romney. But yeah, irony. And the perils of being uninformed doofuses that are fresh out of their indoctrination camps….errr, I mean, Universities.

      • Lucifer Dye

        Hmm, Mary Sue, but I bet those uninformed doofuses fresh out of their indoctrination camps know that you shouldn't begin a sentence with a lower-case letter.

  • Sonja Silipino

    Okay, Everyone can get in my face if they want to, I don't care, this is my honest thoughts, Iam assuming
    we are all speaking our true feelings here. Ted Kennedy strived for many years trying to get some form
    of overall government health care coverage for all people, it was never definitely detailed, because it never
    got that far. Now I know that many people will say" Ted's plan would have been better than obama's he was
    smarter than that". How do you know it would have been any better? Then there was Hillary Clinton's closed door meetings, tring to rearrange American health care. Remember," Hilly's closed door meetings
    when she ruled the rooast as slick willie's first lady"? As despicable as obama' s health atrosity is,this
    is not an original attempt at socilized medicine. The forerunner of this mess started with Kennedy and
    Hillary Clinton. Hillary has also been trying for years to get gun control, unlimted gay rights, I still remember seeing pictures of her arm in arm with arafat. At heart , she has always came across as being
    sympathetic to the arab and muslim cause.who legalized late term abortions? The clintons did thats who!
    When obama's ratings dipped a smite, who came flying to the convention to gush all those lies about how great abama is? slick Willie did thats who! Hiilary's stud husband. Hillary has worked for obama
    for four years now there is no way she would have lasted if they were'nt on the same page. We all know
    how Hillary takes orders from her male counterparts. With the exception of the economy, anything we see
    of obama now, Hillary has already been there, done that or at least tried to. There sure is a lot of coincidences here. The biggest things a bout obama is his idiots grin and his ego. Somwhere there
    is a village missing an idiot and I think the Clintons found him.

    • Mary Sue

      next time check your formatting, it looks like you typed this up in Notepad with Word Wrap turned ON and then copypasta'd it in. If that's what you're doing, next time turn off Word Wrap before doing that.

      • Lucifer Dye

        Hey, Mary Sue, check my reply to your post above. Next time you feel the urge to advise people, you might check your own posts. "Copypasta" sounds delicious, by the way — is that what they mean by the phrase "eating your own words?"

    • Lucifer Dye

      Since it bothers you that Hillary Clinton was once seen arm-in-arm with Yassur Arafat, I imagine you were positively apoplectic when it was discovered how friendly George W. Bush was with members of the Saudi royal family. Lest we forget, fifteen of the nineteen 9/11 terrorists were also Saudis. Any outrage there, Ms. Silipino? Hmm, thought not.

    • Jim_C

      Sonja, you do know that the ACA, aka "Obamacare," has its roots in both a Nixon-proposed plan (which Kennedy at the time thought didn't go far enough) and the Heritage Foundation?

      Many of Obama's fans wish the ACA were socialized medicine. It isn't.

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