Restaurant to charge surcharge to pay for Obamacare

November 15, 2012

Obamacare economist in action

It’s the iron logic of economics, really: either you recoup your costs and make a sufficient profit to justify staying in business, or you go out of business. In this case, not only is the owner of several Denny’s restaurants cutting employee hours to balance the cost, he’s also adding an explicit Obamacare surcharge to each check:

Florida based restaurant boss John Metz, who runs approximately 40 Denny’s and owns the Hurricane Grill & Wings franchise has decided to offset that by adding a five percent surcharge to customers’ bills and will reduce his employees’ hours.

With Obamacare due to be fully implemented in January 2014, Metz has justified his move by claiming it is ‘the only alternative. I’ve got to pass on the cost to the customer.’

The fast-food business owner is set to hold meetings at his restaurants in December where he will tell employees, ‘that because of Obamacare, we are going to be cutting front-of-the-house employees to under 30 hours, effective immediately.’

Obamacare requires employers with 50 or more workers to offer a state-approved (and more expensive) health plan or face fines of $2,000 per uncovered full-time employee. For operations run on typically thin margins, like restaurants, and with a bad economy already making things tough, the options offered are potentially crippling or even fatal to a business. Thus Obamacare creates a perverse incentive to contain costs by cutting hours, which hurts employees, and raising prices, which hurts the consumer.

(And, I don’t know about your area, but a lot of Denny’s customers I see are on fixed incomes. As anyone who understands basic economics (1) knows, businesses usually deal with increased costs by passing them on to the customer. Ergo, Obamacare harms people on fixed incomes.)

Metz recognizes he may lose a fair amount of business by making the Obamacare surcharge explicit, but I say “Good for him” and I hope other service industries make that same decision. Why shouldn’t people know just what goes into their bill, aside from the cost of the meal, itself? We break out sales tax, don’t we? And there’s a separate line for tips, so why not one for our glorious new “free” health care plan?

Maybe, if there’s enough pain and it’s made clear where it comes from, voters will be motivated to do something about it in 2014 and 2016.

And maybe they’ll finally realize that elections have consequences.

via Pirate’s Cove, which has more.

Footnote:
(1) This of course excludes leftists, Democratic members of Congress, the President, and the average Obama voter.

(Crossposted at Sister Toldjah)


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