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Applebees, Jimmy Johns, and Papa Johns to Make Customers Pay for Obamacare–Sounds Like Adjunct Teaching

November 16, 2012

I am trying to get this straight in my head, because every time I read it, the CEO’s or franchisees involved sound like morons.  Because these business owners, most of whom own multiple franchises or offer franchise “opportunities,” like Jimmy John’s, feel that the cost of providing their full-time employees with health insurance will affect the company bottom line, they will add a direct charge to a customer’s bill to force them to pay to cover the outlet’s insurance coverage for employees. And when pizzas for $5-$10 sell on virtually every corner, this sounds like a good idea to whom?

I would rather eat at a restaurant that pays its employees well, but if I had to listen to these CEO’s whine, I would rather not eat out at all.  Eating out is costly, the food at most of those restaurants has gone downhill in quality in the last couple of years, and most get their ingredients from factory-farmed suppliers.  Goody, so now I can eat GMO ingredients and pay to cover some jack-ass CEO’s responsibility for his employees that he finds offensive?  Not sounding like a real enticing option to me.

It’s interesting that these guys who seem like self-made start-ups seem to expect to make the most of their money off of paying subprime wages and neglecting to offer health insurance because they don’t want to pay for it, but they expect their employees to provide great customer service.  So now the plan is for these guys to have employee hour cuts at their restaurants:

Currently, the law states that employers with more than 50 full-time equivalent employees will be charged a penalty for any employees over 30 full-time employees that they don’t cover. Several employers have cited that provision — including Darden Restaurants, Papa John’s, Apple-Metro and Jimmy John’s — in announcing plans to skirt the law by cutting employees’ hours to make them part time.

Metz said he will take the extra step of adding a surcharge because he believes the law will eventually expand to include penalties for not covering full-time equivalent employees. If he has to pay a penalty for his average 35 full-time equivalent employes per restaurant, he said it would cost him $75,000 per location. In that case, he said raising prices wouldn’t be an option, since he’d have to raise prices about 25 percent to cover the costs of Obamacare, which would be “catastrophic” for his business.

It reminds me of adjunct teaching, and well, I have had friends and family members trying to make a living waiting tables.   See my post here about the rate of adjunct pay hovering at about $3.50/hour, about what servers make. Between adjunct teaching and waiting tables, there is a big corporate entity that refuses to offer full-time work, makes a tremendous amount of money off of underpaid workers and refuses to hire full-time under the guise that insurance will cost too much.  I watched people try to navigate this for years, and the people who are generally injured are the employees.  They have no control over whom is being hired, at what hours, and what the rate of pay will be.  Those are forces beyond their control, and yet they are being made to pay directly with their check what their employers don’t want to cover.

Interestingly, it makes me wonder if employees will work second jobs, as John Metz, a franchise owner of at least 40 restaurants claims will happen, or if he will just have fewer workers apply.  Perhaps if he can’t get quality workers, he might change his stance.  Think of the call operators for major corporations, outsourced to people who had trouble speaking English: “Hello, this is Peggy…” The customer backlash may not be in these big guys’ favor.


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