Restaurant to charge surcharge to pay for Obamacare

Posted by: Phineas on November 15, 2012 at 1:01 pm

**Posted by Phineas

Obamacare economist in action

It’s the iron logic of economics, really: either you recoup your costs and make a sufficient profit to justify staying in business, or you go out of business. In this case, not only is the owner of several Denny’s restaurants cutting employee hours to balance the cost, he’s also adding an explicit Obamacare surcharge to each check:

Florida based restaurant boss John Metz, who runs approximately 40 Denny’s and owns the Hurricane Grill & Wings franchise has decided to offset that by adding a five percent surcharge to customers’ bills and will reduce his employees’ hours.

With Obamacare due to be fully implemented in January 2014, Metz has justified his move by claiming it is ‘the only alternative. I’ve got to pass on the cost to the customer.’

The fast-food business owner is set to hold meetings at his restaurants in December where he will tell employees, ‘that because of Obamacare, we are going to be cutting front-of-the-house employees to under 30 hours, effective immediately.’

Obamacare requires employers with 50 or more workers to offer a state-approved (and more expensive) health plan or face fines of $2,000 per uncovered full-time employee. For operations run on typically thin margins, like restaurants, and with a bad economy already making things tough, the options offered are potentially crippling or even fatal to a business. Thus Obamacare creates a perverse incentive to contain costs by cutting hours, which hurts employees, and raising prices, which hurts the consumer.

(And, I don’t know about your area, but a lot of Denny’s customers I see are on fixed incomes. As anyone who understands basic economics (1) knows, businesses usually deal with increased costs by passing them on to the customer. Ergo, Obamacare harms people on fixed incomes.)

Metz recognizes he may lose a fair amount of business by making the Obamacare surcharge explicit, but I say “Good for him” and I hope other service industries make that same decision. Why shouldn’t people know just what goes into their bill, aside from the cost of the meal, itself? We break out sales tax, don’t we? And there’s a separate line for tips, so why not one for our glorious new “free” health care plan?

Maybe, if there’s enough pain and it’s made clear where it comes from, voters will be motivated to do something about it in 2014 and 2016.

And maybe they’ll finally realize that elections have consequences.

via Pirate’s Cove, which has more.

(1) This of course excludes leftists, Democratic members of Congress, the President, and the average Obama voter.

(Crossposted at Public Secrets)

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7 Responses to “Restaurant to charge surcharge to pay for Obamacare”


  1. Tex says:

    What? You mean medical care is not free under Obamacare? But he promised me all this free stuff!

  2. Carlos says:

    It’s about time someone had the guts to start making customers aware of just how much their “free” stuff costs!

  3. Drew the Infidel says:

    Radio talk show host Leslie Marshall was all over the map on Fox News today putting her ignorance about franchise operations on full display. She was in full screed about how much Papa John’s pays pro athletes to appear in their ads, therefore they have enough money to pay Obhammudcare costs on their own without passing it along. Obviously, running your lip for a living does not have much of an overhead or require the slightest degree of business acumen.

  4. Calcon10 says:

    Next step: John Metz is audited and sent to jail…then released after a half-year when IRS admits to “error” and “apologizes.”

  5. Kate says:

    Last time I checked my utility and trash bills they added a surcharge for increases in cost of fuel….so it in a way this is just a way to enlighten people as to what they are paying for at the time of sale in the interest of full disclosure!

    Some ignorant folks don’t understand a thing about running a business…this proves it! The sad part is they get to shout their lack of knowledge from the TV set…without proper rebuttal!

  6. Chris in NC says:

    Calcon10: That is dead on except he will not be released until after 2016. OR he will be mysteriously killed. Yes, Obama is that evil.