Ronald Kessler reporting from Washington, D.C. —
If you want to know why unemployment remains high, talk to Andy Puzder, CEO of CKE restaurants. CKE operates 3,250 restaurants, including the Hardee’s and Carl’s Jr. chains, in 42 states and 26 foreign countries.
Puzder tells Newsmax he asked Mercer, the largest healthcare consulting firm, to analyze the impact of the law on the privately held, $1.3 billion-a-year restaurant chain. Counting employees who work for the company’s franchises, CKE employs 70,000 people.
Restaurant crews are not currently covered by company health insurance but can buy it on their own through a plan the company offers. Obamacare will require CKE to provide all employees with health insurance beginning in 2014.
“With Obamacare, the best estimate we could get on what happens if we keep all of the people who are currently full-time employees of our company-owned restaurants and we offer medical insurance to everybody as required by the statute is that we would go from paying $12 million a year to $30 million a year for healthcare insurance,” Puzder says from his Carpinteria, Calif., Headquarters.
The additional $18 million in costs — an increase of 150 percent — will have to come from somewhere, Puzder says.
“Last year we spent about $9 million building seven new restaurants,” Puzder says. “The first thing you would do is cut your discretionary spending and, obviously, building new restaurants, which is how we create jobs, would be one of the first things that we cut.”
For company-owned restaurants, this means a loss of 175 potential new jobs. In addition, CKE’s franchises, which account for the bulk of CKE employees, would cut back on expansion, Puzder says. With those costs looming, Puzder is reluctant to grow the company and hire new workers now.
“One franchisee called me before the Republican convention,” Puzder says. “He is a one-unit franchisee in Iowa. He said, ‘Andy, I would like to build another restaurant, but you should tell the people at the Republican Party I'm not going to build one because if I do, I’d go from 25 employees to 50 employees, and 50 employees is when I have to start complying with Obamacare.’”
As a result of the law, “You’re not getting growth, you are not getting restaurant development, and when Obamacare is in place, it is clearly going to retard any kind of economic growth that we might have otherwise expected,” Puzder says.
The law presents Puzder with a grim alternative: changing the status of full-time employees to part-time workers. CKE then would not have to give them the required coverage.
“You would have to take all of your crew people and put them at 30 hours a week or less,” Puzder says. “This is what most companies are going to end up doing.”
However, part-time employees are less productive than full-time workers.
“In our case, it’s really a very distressing thing to do because about 86 percent of our employees in California, for example, are minorities, and about 62 percent are females,” Puzder says. “So we have a lot of single moms, minority single moms working in our restaurants, and they are going to end up having to get two jobs to support their families, and they still won’t have healthcare coverage at either job.”
While that’s an alternative he does not like, Puzder says the company may be forced to take advantage of it unless Mitt Romney is elected president and ends Obamacare.
“I think what everybody needs to know is that Obamacare absolutely is killing job creation in the United States,” Puzder says.
Ronald Kessler is chief Washington correspondent of Newsmax.com. He is the New York Times best-selling author of books on the Secret Service, FBI, and CIA. Read more reports from Ronald Kessler — Click Here Now.
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