Prediction: Obamacare will cause a wave of restaurant closings.
Chief Justice Roberts said that the Affordable Care Act’s fine for not purchasing Obamacare insurance was Constitutional because it was really a tax. That was legally outrageous but it was economically interesting. What is the difference between the government taxing you for the sake of “services” the government wants to provide and the government fining you for the same reason? The fact is Obamacare is a massive tax in lots of ways. Being required to pay more for services we don’t want (at least, not at that price) is no different than having our taxes raised.
And it has the same effect on businesses–it hurts and destroys them. Ellie Bufkin writes at The Federalist,
By now most people have heard that many popular restaurants in New York City have abolished tipping, and raised their menu prices by up to 40 percent, which now gives them the ability to pay everyone on staff more and provide full-time health coverage. Some restaurants tried a different tactic, including Brooklyn pizzeria Franny’s. They announced that checks would soon include a line item that reads “3% surcharge for Obamacare,” then quickly reversed that decision after complaints. Now they will raise all their prices, despite their concerns this means “putting $22 pizza on the menu.”
A manager at Franny’s compared the line-item to a fuel surcharge. When gas prices go up, delivery companies will often charge their clients a percentage of their order to offset the extra expenditure. Citing Obamacare’s inflated health-insurance premiums and requirement that eateries like Franny’s insure their full-time staff, restaurants have asked their guests to pay.
Restaurants like Franny’s operate with razor-thin margins, which is so often the reason that the food and beverage workforce does not have employee-sponsored health care. This a very transparent way of letting the public know how the new health-care law affects a small operation like theirs.
Remember, Obamacare isn’t only directly hurting businesses. It is also hurting consumers. While restaurants have to try to sell the same food at higher prices, families are having to pay higher prices for insurance policies that require them to pay more “out of pocket” for medical care. So the same factor causing restaurants to charge more is also reducing disposable income.
No wonder the holiday spending has been low!
And, by the way, if you think people will “eat healthier” without restaurants, think again. Customers will still want to save time and money. Thus, they are far more likely to buy fast-food type items that are no different than fast food.
This will all have the effect of further damaging the middle class and increasing the income gap. So in addition to the injuries of Obamacare we will have to listen to increasingly shrill Democrats rant about the growing income inequality that they themselves have caused.