Eateries facing a plate of health care issues

Moderated by Rick Badie

Higher menu prices. Fewer work hours and jobs. Zero expansion and possible closings. This, writes a local franchiser, will be the potential impact in the restaurant industry of health mandates under the Affordable Care Act. But the co-founder of a workers’ advocacy group suggests that businesses can profit by taking care of personnel.

Repeal Obamacare

By Aziz Hashim

More than three years into our jobless “recovery,” 12.1 million Americans are still out of work. Nearly 23 million have stopped looking or can’t find full-time work.

The labor participation rate is 63.6 percent, the same level we saw in 1981. Employers are only adding slightly more jobs per month needed to keep pace with normal labor-force expansion.

So why did the unemployment rate go down below 8 percent last month? In large part, due to an increase in part-time work. While the drop in unemployment may seem completely positive, there is an underlying problem for small business owners due to Obamacare.

As employers begin to make their growth plans for the next year, the true costs of Obamacare have started to sink in. They threaten much of the growth forecast in businesses like mine, a franchise of pizza, burger and chicken restaurants that include Atlanta-based Popeyes Louisiana Kitchen. I want to grow my business and add more locations. Obamacare penalizes me every time I add a full-time worker to my franchise.

The employer mandate forces employers to provide coverage or pay a penalty once they reach the 50 full-time-employee threshold. Employers face a decision of closing a business, eliminating jobs, or shifting workers from full- to part-time to avoid the law’s penalties. We are likely going to choose the latter option.

In the franchise industry, there are thousands of multi-unit franchises like me who are put at a competitive disadvantage by the law’s employer mandate. This threatens growth in our industry. In cases where a franchisee owns and operates multiple locations, the law treats these firms as one company for tax and health-care purposes.

Suppose a multi-unit franchisee owns four establishments with 15 full-time employees each. Under the law, this multi-unit franchisee will be treated as a single firm with 60 full-time employees. The employer will be required by law to provide health care benefits for all employees or pay a fine of $2,000 per full-time employee per year. If these four establishments were owned and operated separately, they would be exempt from the health care requirement.

If these four separately owned businesses choose to offer health insurance, they would in many cases be entitled to a tax credit, making this an even further disadvantage for multi-unit ownership.

Businesses cannot operate at a loss for an extended time. That is the choice this law may force companies to face. Another often-overlooked factor is that many businesses will have an added incentive to become more automated and employ fewer workers. Utilizing automated check-out counters and purchasing new machinery are options we must consider to reduce the number of employees and remain profitable under these mandates.

Business owners like me who want to continue to expand would feel more confident about expansion and hiring plans without Obamacare. The only way to change this is by repealing Obamacare in its entirety and starting over with market-based solutions.

Aziz Hashim is president and CEO of  Decatur-based National Restaurant Development, Inc.

Health care can help stabilize workforce

By Saru Jayaraman

There’s been a lot of talk about the recent announcement by Darden, the world’s largest full-service restaurant company and owner of Olive Garden and Red Lobster, that it would reduce workers’ hours to avoid having to provide health coverage when the Affordable Care Act goes into effect in 2014.

None of the coverage mentioned the impact on one key stakeholder group: consumers.

The Affordable Care Act (ACA) is a great step to ensure that people who touch our food are not sick, making sure that we don’t get sick as well. Darden claims the ACA is forcing the company to reduce its employees’ hours to stay afloat.

Moreover, the National Restaurant Association would have you believe the industry is going to collapse if it actually provides workers with genuine health-care access. There are plenty of great employers in America already providing benefits.

For the last three decades, Zingerman’s Community of Businesses in Michigan has been providing up to 80 percent of workers’ health care premiums on a comprehensive health care plan. Zingerman’s started as a two-employee deli in 1982. It has grown to an award-winning company with nine businesses that employ 575 workers and realize more than $40 million per year in revenue.

How? Zingerman’s was committed to working benefits into its business model from the start and heard workers’ input in choosing the plan.

Says Zingerman’s founder Paul Saginaw, “What do you get from it? You get a stable workforce. You get a workforce that can stay healthy. You get someone who feels good about the company and is out there trying to help the company be successful. The benefits are enormous. So now you figure out how to make it work.”

Everyone agrees health care costs are high. Saginaw believes a government-funded plan would be best. Without that, Saginaw needs and wants his employees to be healthy, for the sake of his workers and customers, and for his own bottom line. His workers say their customer service is better because they feel secure.

In fact, restaurants in the whole city of San Francisco have had to contribute toward a health care fund for their workers since 2008. Business is booming.

The organization I direct, Restaurant Opportunities Centers United, puts out a consumer guide on which restaurants provide benefits like paid sick days and which don’t at www.rocunited.org/dinersguide. We should support restaurants that do and let others know they shouldn’t cut corners because we put our health in their hands every time we eat out.

Saru Jayaraman is co-director of Restaurant Opportunities Centers United in New York.

17 comments Add your comment

Andre Plessis

November 1st, 2012
6:08 pm

70% of shoppers have stopped buying goods or services from a company after experiencing poor customer service.
64% have made future purchases from a company’s competitors after experiencing poor customer service.
81% are willing to pay more for a better customer experience.

Andre Plessis

November 1st, 2012
5:57 pm

In my experience in the restaurant industry, VERY FEW UNDERSTAND THIS BUSINESS, which is why so many fail. It is not because yo have money, and you have a cook that you will succeed. If you want to succeed, you must understand HOSPITALITY. Hospitality means that you must make people feel as if they were at home. And for that you need people who have those skills that are not TEACHABLE.

Andre Plessis

November 1st, 2012
5:52 pm

In regards to the restaurant, what kind of risk are you talking about? Most restaurant have INVESTORS, and the owner has just part of the risk. And if you think that the efforts of the WORKERS IS NEGLIGENT COMPARED TO THE RISK OF THE OWNERS OR INVESTORS, then why don’t you tell the workers IN THEIR FACE. WITHOUT WORKERS, THERE IS NO BUSINESS. If you have a problems with GIVING, they don’t get into a business.

The rules in life is that YOU MUST TAKE CARE OF THOSE WHO TAKE CARE OF YOUR BUSINESS IF YUO WANT TO BE SUCCESSFUL. If yu do not consider them, they won’t give a dman about your business. No wonder some of you are struggling with the type of mentality you have. SOME RESTAURANTS MAKE PLENTY OF MONEY. JUST DUPLICATE THEIR SUCCESS. But for that it would require you to READ, EDUCATE YOURSELF, BE PASSIONATE ABOUT WHAT YOU DO. But all you care about is your profit and NOTHING ELSE. THAT IS WHY YOU ARE FAILING. If you want to be successful, your workers must see the big picture. They don’t so you FAIL. Simple as that.

Andre Plessis

November 1st, 2012
5:46 pm

For all of you who complain about OBAMACARE, you should educate yourself and HAVE A BIGGER VISION. The reason that other companies like APPLE, MICROSOFT, DISNEY, RITZ CARLTON and so many other successful companies offer those benefits is because they had a BIGGER VISION than yours. They found a way to reward THEIR WORKFORCE, because without them, YOU HAVE NO BUSINESS. Take off your workforce, your employees and tomorrow you are OUT OF BUSINESS.

So because they wanted to take care and reward their employees, they implemented steps to reach their goals, dreams and visions. For those of you who bitch because Obama wants workers to get health benefits, shows that you have no vision, no concerns for your workers who do all the job, thus you are not doing well. If you study the most successful companies, they take care of their workers for the most part. Rarely you will see a successful company that does not take care of its employees. It can happen but not easy to find a way to be successful when you ignore the needs of your employees.

Anyone can increase its prices, to afford benefits for its workers, when you know how to do it, when you refuse to be in the commodity business, which does not work unless you are Walmart, and when you understand that YOUR FUTURE IS BASED ON HAVING A SUPERIOR CUSTOMER SERVICE ORGANIZATION.

If you are not successful enough to afford healthcare for your own worker, it’s because you do not give a damn about your employees, thus it is impossible for your workers to give a damn about your company. YOU GET WHAT YOU PAY FOR. YOU REAP WHAT YOU SOW.

Simple as that!

zeke

November 1st, 2012
10:27 am

What a socialist left wing commentary by S.J.! People, companies, businesses are not in business to give benefits, hire people! For our government, supposedly our free market capitalist, personal responsibility and integrity, government to require that businesses “provide health insurance” to workers IS NOT CONSTITUTIONAL! Sure it is fine for a GE, Microsoft< Apple, Intel and the like to do so! They can adjust their pricing to account for the extra costs. My small business with 30 employees, and, considering an expansion that will raise the total employment to about 60, CAN NOT DO THAT! I have 20 or more competitors in my market area. I cannot raise my prices will nilly to give away a benefit to my workers. Now, if you want to change the wording to "offer a health care plan or option" , then I can "offer" a plan to my employees and they can pay for it!!!

[...] Last fall, a server at a North Carolina Olive Garden was forced to work with Hepatitis A because the company neither offers paid sick days nor any kind of health care. Three thousand people had to get tested for Hepatitis A and many ended up winning a … Read more on Atlanta Journal Constitution (blog) [...]

MrLiberty

October 31st, 2012
2:32 pm

Obamacare is just the most recent intervention into the economy that small businesses are being hurt by. Labor regulations, minimum wage, employment regulations, tort issues, licensure, permits, etc. have all made life miserable both for small businesses and those who remain unemployed because of high employment costs. While republicans and democrats alike pat themselves on the backs for all they have done “for the working man,” they are all so economically ignorant that they can only see the immediate effects of their legislation, but never see the person who is not hired because the small business cannot overcome that financial burden that government has now set up before him.

The free market works. The fascist society we have in america today does not – and never has. It is ironic that we supposedly fought WW2 to rid the world of fascism while our own government was embracing it at home and has been embracing it ever since. Economic ignorance will be the ultimate downfall of this nation.