No, O, no it’s not
Over one-third of the 9.1 million full-time jobs among America’s business franchises could be cut back or eliminated by ObamaCare as small businesses struggle to maintain profitability while coughing up money to pay for government-mandated healthcare, according to the International Franchise Association.
Astonishingly, The New York Times – official mouthpiece of the left – recently featured a bakery in San Diego to illustrate the point.
First, a refresher on the mandate: Under ObamaCare, employers with more than 50 employees must either offer health insurance to all full time employees or pay a fine of $2,000 per worker – every year.
Currently, the Baked in the Sun bakery in San Diego does not offer health insurance to 90 of its 95 employees, which means that owners Rachel Shein and Steve Pilarski have one of three choices facing them – none of which will be good for their business: They can offer health insurance to all employees and figure out how to finance the additional cost; they can pay a fine for not offering health insurance; or, they can trim their full-time workforce to 50 employees so they can avoid both the cost of offering insurance and the cost of the penalty.
Welcome to the world of unintended consequences. Although, the cynic in me believes that the Regime knew full well that small businesses would be forced into this dilemma. (Thus, decimating small businesses, thereby forcing millions of more Americans to work for larger companies, many of whom could ultimately be unionized – in the socialist pipe dreams of the community organizer, anyway.)
Baked in the Sun’s owners estimate that the cost of offering insurance will run about $200 per worker per month, or about $216,000 per year to cover all 90 currently uninsured employees, of which the bakery would pay half and the employee would pay the rest. Their annual revenues are $8 million, but because food service is an extremely low-margin business, only about $200,000 of that is profit, meaning that financing the $108,000 employer-paid half of the additional coverage would cost Shein and Pilarski half of their yearly profits. (A leftist’s dream come true.)
Even with an exemption for the first 30 employees, paying the penalty would still cost the bakery approximately $130,000 a year.
So, what’s a small business to do? In this case, Baked in the Sun‘s options are realistically reduced to two: a): provide the insurance, or, b): lay off 45 employees. Of course, “progressives” would argue that given that the bakery already makes an “obscene” profit, of course it should provide the coverage.
So, reduce the owner’s profits to $50,000 each; or reduce the workforce to 50 employees. Hmm. Two thoughts:
Let’s assume that the owners go with option “a.” Accepting that Shein’s and Pilarski’s incomes would be cut in half, at what point would it no longer make sense for them to keep the bakery open? I’ve never worked in a bakery, but I do know that these folks get up a hell of a lot earlier every day than do you or I do. Why would they just not close up shop and go to work for a larger company? (O seen drooling in the corner.)
Let’s now assume that the owners opt for “b.” First, contrary to the protestations of the left, small business owners don’t hate their employees. (You know, like major corporations supposedly do?) I’m sure that Shein and Pilarski have warm relationships with at least most of their employees, and would be devastated by being forced to lay off half of them. Second, Baked in the Sun most likely doesn’t have 95 employees accidentally; the owners obviously need their current workforce-size to operate their business. Reducing their workforce for the sole purpose of complying with ObamaCare would most likely lead to even less profitability – or ruin. (Again, mission accomplished for O.)
Baked in the Sun is just one of tens of thousands of small businesses facing the real-world choices of O’s “affordable” healthcare. No campaign slogans. No too-good-to-be-true promises. Just difficult, real-world choices. A 2011 Hudson Institute study found that the franchise industry alone could face additional costs of $6.4 billion, most of which will be passed on to consumers – a simple concept that low-information Obamabots are, for some reason, unable to grasp.
A North Carolina Five Guys burgers franchise owner, for example, recently said that he is facing added costs of $60,000 a year under Obamacare – and that he would have to boost prices of burgers, fries and hot dogs as a result. What part of that is so difficult for the socialist mind to understand?
This will all get much worse before it gets better, folks.