December 5 2011
George Will’s Friday column in the Washington Post is a must read. He tells the hardscrabble story of how, in 1941, a 24-year-old truck driver with $326 in start-up costs managed to turn a lone hot dog stand into a corporate giant--CKE Restaurants—a company made up of 3,200 restaurants (Carl’s Jr. and Hardee’s) that employees 70,000 Americans.
But this American success story might not have a happy ending.
In the article, Will examines what Obamacare means for businesses like CKE Restaurants--businesses that mainly employ part-time and minimum wage workers (the ones who weren’t lucky enough to get an Obamacare waiver).
When CKE’s health-care advisers, citing Obamacare’s complexities, opacities and uncertainties, said that it would add between $7.3 million and $35.1 million to the company’s $12 million health-care costs in 2010, [CEO] Puzder said: I need a number I can plan with. They guessed $18 million — twice what CKE spent last year building new restaurants. Obamacare must mean fewer restaurants.
And therefore fewer jobs.
While Will doesn’t cover it in his column, the restaurant industry is being hit with another set of regulations—those being placed on the food they serve. From banning some ingredients (certain shortenings and cooking oils) to limiting the use of other ingredients (salt), to requiring restaurants to put calorie information on their menus (despite studies that show people ignore such postings), to instructing restaurants to cut their serving sizes. Cities are even passing zoning laws that will ban certain restaurants from entering neighborhoods.
The healthcare mandates coupled with the ever more onerous food regulations being pursued by governments at all levels will hurt these businesses. But, more importantly, these regulations will cost jobs—for the very people suffering with the highest unemployment rates, the young.
While the Labor Department states that the unemployment rate has dipped to 8.6 percent this month, the youth unemployment rate remains at a jaw dropping 23 percent. That is the exact demographic that is employed by companies like CKE Restaurants.