Obamacare = A Very Ugly Employment Picture

by Pejman Yousefzadeh on November 24, 2012

I have noted this story of a community college that is going to cut work hours for its adjunct faculty and temporary workers in order to avoid the Affordable Care Act’s requirement that the community college pay for health insurance for all of its employees. As anyone might have guessed, this is all just the beginnings of a trend:

Shortly after Nov. 6, Zane Tankel, who runs 40 Applebee’s restaurants in the New York City area, announced that his company was freezing employment and would not build any new restaurants. President Obama’s re-election, Tankel explained, meant that ObamaCare was likely to be fully implemented, costing his company millions of dollars and significantly raising the cost of hiring a worker.

Tankel’s statement prompted outrage and threats of a boycott, but he was far from alone. Already John Schnatter, CEO of Papa John’s Pizza, has announced that he would likely lay off some workers. Earlier, Schnatter said that ObamaCare would cost his business $5 billion to $8 billion annually, forcing him to increase the price of pizzas.

Meanwhile, two other restaurant chains, Olive Garden and Red Lobster, are moving many of their employees from full- to part-time work in order to avoid the law’s mandate that anyone working more than 30 hours must have insurance. An owner of 40 Denny’s in Florida, meanwhile, says he’ll add a 5% surcharge to customer bills in 2014 to cover his increased costs.

While restaurants, with traditionally low profit margins and large numbers of low-skilled, low-wage workers, are exceptionally vulnerable to ObamaCare’s costs, other business are being hit too. For example, Boston Scientific has announced that it will now lay off up to 1,400 workers and shift some jobs to China.

And Dana Holdings, an auto-parts manufacturer with more than 25,000 employees, says it to is exploring ObamaCare-related layoffs.

These, and countless other employers across the country, are not doing an impression of Montgomery Burns. They are simply responding to economic reality.

(Via InstaPundit.) Of course, it ought to go without saying that no one with the least bit of understanding when it comes to economics should be surprised by any of this.

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