Subway CEO says don't worry about Obamacare
He argues that while it will make his industry less competitive, at least all operators are facing the same problem.
"It’s going to affect the food business and it’s going to make it less competitive, compared to eating at home, for instance," he said. "But probably every operator will have to deal with this. It will be an extra cost on the average hour that you have to pay for. And probably people will raise their prices and pass it on to the consumer."
Dunkin' Brands (DNKN) and other companies that depend on part-time workers are lobbying the Obama administration to relax requirements that they provide health insurance for people who work as little as 30 hours per week. Employers with 50 or more workers are required to offer what's known as "minimum essential" health insurance. Critics say the mandate would create onerous financial burdens on many businesses.
For Subway, Obamacare would apply to franchisees with multiple locations becaues the typical store has about 12 employees. The closely held Milton, Conn., company is taking a more measured tone toward Obamacare than others in the restaurant industry with good reason. As NBC News recently noted, Papa John's (PZZA), Denny's (DENN) and Applebee all saw their reputations suffer among consumers because of critical comments their executives made about the Affordable Care Act.
Speaking later on CNBC, Deluca said Obamacare was the "biggest concern of our franchiees because they don't have enough information" on its potential impact. Their unease understandable. A company spokesperson could not be immediately reached for further comment.
As my colleague Aimee Picchi recently noted, employers pay about $4,664 to insure a single worker and $11,329 for a family on a yearly basis, which is far more expensive than the $2,000 per worker penalty companies face for not following Obamacare starting next year. Many critics say business will find it financially sensible to pay the penalties rather than provide health insurance.
According to data from the Congressional Budget Office cited by the Heritage Foundation, a conservative think tank, Obamacare will result in 6 million fewer Americans enrolling in employer coverage by 2016. However, the nonpartisan FactCheck.org disputes the idea that Obamacare is a "job killer."
"As we’ve said before (a few times), experts project that the law will cause a small loss of low-wage jobs -- and also some gains in better-paid jobs in the health care and insurance industries," FactCheck says. "Furthermore, some small businesses with fewer than 25 employees are already getting tax credits under the new law to help defray the cost of providing worker coverage."
The debate over Obamcare's impact on the economy won't be over for a long time.
--Jonathan Berr doesn't own shares of the listed stocks. Follow him on Twitter @jdberr.
We were all better off with the health care system we had. At least we wouldn't have had a bunch of radical left ideologues writing the legislation or a waistful bloated government controlling it!
Man..It looks like "half the people" that commented on this are morons or imbeciles...
No sense pointing them out or responding to idiotic statements..They wouldn't understand anyway.
It is global embarrasment that we are the riches most powerful nation in the world and we cannot even provide universal health coverage for our citizens. Hell I pay almost $1000.00 a month for our family health, dental and vision insurance then I have a $3000.00 annual deductable. And this though my work. In my eyes it cannot be much worse than that.. $15000.00 before i see a nickle of it in a return. But thank god I had it when my 13y.o. daughter came down with Type 1 diabetes. I would have lost everything, so if I have to pay a .25 cents more for a sub and we have coverage for all. GREAT!! Obama could of given the the Conservatives/Right Wringers the Perfect Bill and you would still bitch Because it vis from OBAMA. The funny things is you right wingers do not have a plan. You are totally clueless but sure can bitch well.
Well, I understand the cost thing but I also understand the safety and quality of life thing. Safety and quality is worth the cost. So I guess I'll enjoy more Subway in the future. This isn't hard since there's a subway on every other corner.
I don't need dunkin dough making me and mine worse off or a pizza chain damaging my over all quality of life. However, I like pj's pizza so I may still buy it but I may buy less since subway is closer to my home and heart that I live by.
The idea of everyone from CEO down to minimum wage getting good healthcare is a noble idea and worth pursuing. However, the way I see this plan working out for the average person is as follows:
(1) Fast food (any minimum wage type industry) raises prices to offset cost
(2) Middle income to low income stops eating out
(3) Fast food jobs disappear due to lack of demand
(4) More people on loose jobs
For the upper class - nothing changes- They are not going to own a company in the US just to provide jobs. They will invest outside the US and retain their level of income. This is true from the most liberal to the most conservative, from Obama to Romney
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