Local Wendy's cuts employee's hours due to Obamacare costs
An Omaha-based Wendy's franchisee is cutting all non-management workers' hours to part time in order to avoid paying health insurance to its employees.
The cost of Obamacare was cited as the reason:
The company has announced that all non-management positions will have their hours reduced to 28 a week. Gary Burdette, Vice President of Operations for the local franchise, says the cuts are coming because the new Affordable Health Care Act requires employers to offer health insurance to employees working 32-38 hours a week. Under the current law they are not considered full time and that as a small business owner, he can't afford to stay in operation and pay for everyone's health insurance.
There are 11 Wendy's restaurants in the metro. "It has a huge effect on me and pretty much everybody that I work with," says Growbeck, who understands the reasoning and says other part-timers at other fast-food restaurants are facing the same problem. "I'm hoping that I can get some sort of promotion because then I would get my hours, but everybody is shooting for that because of the hours being cut."
Burdette says the decision affects around 100 employees. It was a tough one and he understands why people are upset, but the hour reduction is effective in two weeks for all non-management. Management employees will continue to have benefits as they are officially full time.
Liberals are claiming the cost of Obamacare is "negligible":
By moving workers to part-time status in order to avoid paying for their health benefits, the Wendy's franchise would shift the costs of insurance coverage onto hundreds of employees:
But anecdotal evidence suggests this strategy may backfire on the Omaha Wendy's operations. This fall, Denny's quickly distanced itself from a franchisee's similar ploy, while Darden Restaurants saw a sharp 37 percent drop in profit after threatening to cut workers to part-time.
Heaping blame on Obamacare may be a popular tactic among the fast food industry, but it is a misleading one. According to the Urban Institute, Obamacare has a negligible impact on business costs, leaving large companies virtually unaffected while actually reducing costs for small businesses.
If a business is paying $150 a month for employee health insurance coverage and those costs rise significantly - doubling in some cases - how is the impact on business costs "negligible?" And does anyone still believe the propaganda that Obamacare will actually reduce costs? The evidence is overwhelming that it won't.
Note: The drop in Darden Restaurant profits had little nothing to do with their plan to cut workers' hours in order to avoid paying health insurance. The suggestion that the public is punishing Darden is belied by the facts. Darden profits had been slipping since 2010 and there is no evidence that the plan to cut workers hours significantly damaged the company - certainly not not to the point that its profits dropped 37%.
Meanwhile, liberals continue to be in denial about Obamacare's effect on businesses of all sizes. Some companies will go under, some become so unprofitable they will have to significantly curtail its workforce, and some, like Wendy's, will have to cut employee hours to stay afloat. This is the reality facing American businesses and to try and sugar coat it by denying it is happening or will happen is about what we might expect from the "reality based community."