Reply to Red Lobster and Olive Garden restaurants to shift more workers to part time to avoid ObamaCare

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[quote=Anonymous][quote=Anonymous]Even if that works for some restaurants it won't work for all. The Bertucci's in Arlington just closed. Big successful chain but it couldn't make it in this economy. Maybe it could have if it could have lowered prices or paid less for health care.

In addition, most businesses need investors. An investor won't buy your argument. If I can make a slightly higher return with my  money in one restaurant than another, I'll pull my money out of the one that is more generous than the market requires to its employees.

I assume you agree that if they charge more per lobster they will get fewer customers. At some point they've already discovered the right combination of price and willing customer that maximizes profit. There's no reason to assume they'll be able to charge enough more to cover the increase in health care cost without losing too many customers. [/quote]
I don't think you're accurately predicting how the law will affect businesses.  I doubt many businesses will pay for any additional employee benefit costs (like healthcare) solely by increasing the cost of their products (ex: charge more for the lobsters).

Instead, I predict that many businesses which are not currently offering employee healthcare options, and which are required to start offering healthcare, will pay for those additional employee benefits by freezing or even reducing what they pay their employees.  In essence, those employees will be getting paid more in benefits, and less in salary.  And presumably, the employees may even gain in the bargain, because the cost of group healthcare purchased through the employer will be lower than the cost of individual healthcare that employees might purchase on their own.  So for example: while the employee pay might decrease by $100/month, the employee might be receiving $120/month  in healthcare benefits.

Obviously, for the many companies that already offer healthcare benefits to their employees, there will be no meaningful change.

[i]Won't employees immediately quit when their employer starts freezing their salaries to cover new healthcare costs?  [/i]No, because all employers are operating under the same rules.  Any employee who quits will not be able to get a better deal from some other employer.

[i]What about employees who were choosing not to buy any health insurance previously, and now will find their pay reduced to cover the costs of health insurance they don't really want?  Aren't they the real losers here?  [/i]I'm not sure how many of those employees exist.  But my personal answer is "tough luck."  One of the goals of the legislation is to ensure broad healthcare.  If some people were choosing not to have any healthcare, and instead were relying on free emergency room care to meet their healthcare needs, that's ultimately an extremely inefficient method of healthcare, and one where I'm paying extra high prices for their healthcare (via taxes to support those emergency clinics).  Under that old system, I'm essentially forced to subsidize the decision by those people to spend their money on something else besides healthcare.  But under the new system, everyone is essentially paying for her own healthcare.

The program makes lots of sense economically.  That's why Romney (and the Repubs and the Dems) supported it when it was created in Massachusetts.  But now that it's a political football, each side feels a need to fight over it.  Since a Dem pushed it, the Repubs have to oppose it.  If Bush2 had proposed something similar, the Dems would have criticized it.[/quote]

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