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Restaurants Pledge to Raise Prices to Cover Costs of Obamacare

Obamacare results in cutbacks for workers nationwide
(Photo by David Greedy/Getty Images)

If you hit one of the 40 Denny’s Restaurants in Florida, or any of the national Hurricane Grill & Wings, prices will be going up due to health care.Franchise owner John Metz has decided to tag on a 5 percent increase in price to his restaurant fare and immediately start cutting hundreds of workers’ hours due to the cost of Obamacare.

While this sounds harsh for his workers, Metz acknowledges the hardship it will place on them. It’s a simple matter of economics. From the Dailymail.uk website:

“Obamacare requires businesses or franchises with more than 50 workers must offer an approved insurance plan or pay a penalty of $2,000 for each full-time worker over 30 workers. The program mandates that only employees working more than 30 hours a week are covered under their employers health insurance plan, chains like Olive Garden and Red Lobster are already considering reduced worker hours.”

Metz, like many business owners, is stuck between: A) spending $5,000 annually per employee to join an insurance plan, or B) risking a $2,000 fine for each full-time employee not covered? Metz says the insurance would cost about $175,000 for each restaurant. After all bills are paid, his stores don’t quite clear that much. Money would be lost, and eventually workers laid off.

Like Papa John’s Pizza? More from the Daily Mail news story:

“Earlier this week Papa John’s CEO John Schnatter told shareholders in a conference call this week that Obamacare would cost the company 11 to 14 cents per pizza, a cost that would be passed on to customers.”

Similar cuts are expected at Applebee’s and Jimmy Johns food outlets. Hostess announced this week they are closing three of their large bakery facilities and cutting about 675 jobs. Welch-Allyn, a well-known medical products company, is going to trim about 20 percent of its workforce (they make many of the products used in a doctor’s office or hospital) and even aircraft giant Boeing plans to cut back.

If you’ve been to Kennewick General Hospital, or many of the health care facilities in the Mid-Columbia, you might have noticed the hospital bed you or a family member laid on was built by Stryker. This leading manufacturer of hospital related equipment plans to close their plant in Orchard Park, New York and could cut as many as 1,170 jobs worldwide.

While Welch-Allyn and Boeing don’t pay their workers the same way food-service employees are paid, they are making pre-emptive moves to plan for the millions of dollars complying with Obamacare will cost them.

 

 

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