The recent flurry of well-known restaurants urgently looking to cut costs before the Affordable Care Act’s business regulations take effect in January 2013 have left many people with a bad taste in their mouths.

Conversations from outspoken restaurant CEOs heated up around Election Day, as business leaders from places like Applebee’s to Denny’s threatened to freeze hiring or enact layoffs because of Obamacare. Other businesses, like Wal-Mart, have joined the move to impart measures that would deny health insurance to newly hired employees and limit laborers to work 30 hours a week to avoid rising business costs. The Affordable Care Act, which was signed into law in March 2010, requires business to offer government-defined health care plans to any employee who works 30 or more hours a week. Businesses that do not comply with the regulation are fined $3,000 for each employee that is not covered — a financial cost that many restaurant companies that are struggling under today’s economy can’t take.

With the economy as tough as it is, we can agree that many businesses have to do what they need to do in order to keep their businesses afloat, even if it means cutting costs. But by doing so, are these eateries endangering America’s poor people, who, according to the U.S. Census Bureau, are majority female? Statistics show that 5 million more women than men live in poverty and that 27.6% of the poor population is African-American. An important measure of Obamacare is the expansion of Medicaid, a health insurance program for the financially needy that is dependent on taxpayer dollars. It is also a program that would be heavily used by many impoverished individuals who work low-wage jobs at these type of restaurants.

Today’s socioeconomic atmosphere is reminiscent of our past, eras in which the many poor people were consistently denied access to social rights. 60s-style boycotting of restaurants that seek to cut hours because of Obamacare is a popular message spreading through social media; so much so, that restaurants like Papa Johns have lost their approval rating amongst the public according to recent reports. It’s safe to say that for many, saving a dime on the cost of the blue-collar’s back does not sit well with Main Street.

This is where we must look to analyze how powerful our economic power could be. By patronizing business that flat-out say, “We can’t support the poor nor do we care too”, we are financially backing their ideology by putting more money in the pockets of people who want to preserve the nation’s uneven distribution of wealth. But then there’s the catch-22. If these businesses lose patrons, their businesses will suffer, encouraging them to do the inevitable: cut back on staff, eliminate hours, and lower pay. Or, because of labor complaints, they’ll go out of business, and thousands of people will be out of a job. Unfortunately, those at the bottom line, those that make these businesses run daily will be the hardest hit, proving that business and politics are like oil and water – they just don’t mix.

How, then, do we insure that all people are able to receive the benefits of Obamacare? How do we protect those living in poverty? As consumers that care, we may have to be the ones to foot the bill. Some businesses, like one Denny’s franchise, are considering adding a 5% surcharge to customer’s bills in order to protect employees, while others want to pass on charging customers extra because of the possibility of lost foot traffic.

It’s embedded in American culture to take care of those in need.  Medicaid, Welfare, Social Security, WIC, and Disability  — these are all government-backed programs that draw on taxpayer dollars to take care of those who need assistance to survive. In order to balance the complex toll that universal healthcare has taken on businesses, it will be vital that those who do have it step in and fill the gaps for those who don’t.

Our success in keeping Main Street viable will come down to whether or not everyone from the working class to the wealthy will be willing to look out for their fellow Americans by pulling out a little more change from their piggy banks. Because this isn’t a story of Welfare Queens or Food Stampers gone rogue. It’s a battle for many of life and death, one that’s both tricky and downright horrifying for a great portion of our nation.

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  • Fa

    This was one of the best articles I’ve read on Clutch in weeks! Really well balanced and researched. Although I’m Canadian and the US healthcare reform won’t affect me directly, I believe that every person is entitled to free or affordable healthcare that is high quality. We cannot live or function if we are sick, plain and simple!

    • moemiel

      as a fellow canadian n a health provider i hate it when ppl say canadian health care is free. its not. its tax payer supported. and it’s not affordable for evryone either

    • Fa

      I understand your point, but I did not say that Canadian healthcare is free or affordable- I said that everyone should be entitled to free or affordable healthcare. I know well how many issues there are with our system, which is why I also advocate for high quality care. I’m not sure where in the world has the ideal healthcare model, but what we have now, globally, is surely lacking.

    • Pseudonym

      Taiwan. They developed their current health system by having a committee study 13 or so different countries with universal healthcare and they designed their system by incorporating the best of each country/method.

    • Joy

      moe I hear yeah. Yeah some people refer to Canada’s plan as free, and like you said it’s not. It’s tied to taxes. I will say though: the Canadians that I’ve talked to love the plan.

    • Joy

      Fa: Nothing in life is REALLY free. People that work and pay taxes will be paying for their healthcare insurance, and collectively we will be paying for the people that don’t work, and pay taxes. That’s the part I don’t like.

  • Pseudonym

    Firstly, Hostess DID NOT go out of business b/c of labor complaints. The employees were used as a scapegoat for the owners to get rid of a failing company. (The final decisions were made while the company was in bankruptcy court.) They’ve been working without profits for quite some time and- even then- execs were able to walk away with a combined $1.2 million in bonuses from the same company that stopped contributing to its employees retirement pension plans over a year ago and was simultaneously putting 18,000 people out of a job. If you are so “broke” that you can’t contribute to retirement plans or keep employees, where the heck are you finding this $1.2 million to pay your execs?

    Secondly, there is no actual Catch-22; there’s just the threat/illusion of one that keeps our country slaved in a “corporatocracy.” The reaction of these companies shows exactly why the “trickle down” economic theory doesn’t work. Yeah, yeah, yea, these executives are complaining about having to spend a few thousand dollars extra per employee who is probably earning $30,000 or less/year while they are making $millions/year, plus bonuses, plus stocks and options. Paying for their employees’ health insurance won’t put more than a dent in their profits. There’s no reason why these execs should be living in multi-million dollar mansions, have private planes, and millions to spare, yet their employees are scraping by. Who do you know that works at Wal-mart, Denny’s, or Papa Johns who isn’t struggling and one emergency expense away from poverty? Don’t believe the hype. They can afford it. Just check out how Coscto operates:

    (Example NYTimes article:, Money and Business:

    We need to stop patronizing these businesses and start shedding light on those with better business practices and make it a point to shop there. The greed has gotten out of control- see in how the upper 5% has now become the upper 1%. Next it’ll be the upper 0.00001%.

    I don’t know how economics are handled in other countries, but there needs to be some regulation regarding how much of one’s profits are attributed to employee salaries. It makes no sense for billion dollar businesses to be paying their employees under minimum wage. Call me socialist if you must, but the greed is sickening!

    In terms of health insurance, we need to let the charges go to the employers, stop patronizing those businesses who try to revolt, and the dust will settle. I’m sure other companies are aware of how Costco is thriving and paying employees $17/hour with great medical benefits vs. an average hourly wage of $8.81 ($10.11 for full time) at Wal-mart.

    Don’t fall for the trap. These threats are based in lies. The Papa Johns owner has a net worth of $600 million and has a $7 million guest house! Last year, he gave away 2 million free pizzas as a promotion, but can’t pay an extra 10-14 cents/pizza so that his employees can be healthy? Chil’ PLEASE!!!!!!!(

  • thatgirl99

    Um…Denny’s as a company did not want to have a 5% surcharge. It was one franchise that is now closed.

  • sassy1

    I think that you all are also forgetting that this will impact small businesses as well. These are the business that stand the most to loose. I’ve actually one of the few people that probably actually read the entire healthcare bill. It has it good and its bad points. I am very interested in seeing how this will impact the small mom and pop stores.

    • Pseudonym

      Well, everything has its good and bad points. Coffee, college, meat, makeup, democracy, PPACA….

      As for small businesses, businesses with 50 or less employees do not have to make health insurance available to their employees. In my opinion, if a business is able to employ over 50 people, I think they have probably expanded to the point where they can afford to provide their employees with health insurance. Even if you’re paying those 50 people minimum wage, you’re a multi-million dollar company.

      Small mom and pop stores with 50 or less employees will not be affected. Did you read that part of the entire PPACA bill?


  • Joy

    I really don’t get what all the hoopla is about Denny’s. Their food is horrible; especially their breakfasts. Talk about mushey pancakes. I stopped eating their long before the hoopla. Int’l Pancake House, and Waffle House is much better.