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EATING CROW

Olive Garden Now WON'T Cut Worker Hours Over Obamacare

Public backlash forces restaurant to keep on full-time staff

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by Lisa Fine

Staff Writer t

Image: AP

After being served a large order of negative publicity, the company that owns Olive Garden and Red Lobster restaurants has decided not to chop workers' hours to avoid the cost of providing them health coverage under Obamacare.

The announcement from Darden Inc., the Orlando-based company, came in the same week it offered a lowered profit outlook for the year, blaming failed promotions and public backlash on the Obamacare issue.

The company said back in October it would conduct tests in four different markets to see if using more part-time employees was the way to go. Under the law, large companies must provide insurance to employes working over 30 hours a week starting in 2014.

Customers flooded Darden with feedback on its company web site and Facebook page and in restaurants, Bob McAdam, who heads government affairs and community relations for Darden, told the Associated Press. Also, internal surveys showed both employee and customer satisfaction declined at restaurants where the tests were in place. Darden reported $476 million in profit last year and has 185,000 employees, about 75 percent of whom work part time.

"What that taught us is that our restaurants perform better when we have full-time hourly employees involved," McAdam told the Associated Press.

Via Associated Press

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Should providing health insurance be the responsibility of the employer?

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Comments (view in Forum)

  • DARSB
    !
    Since my preferred single-payer system is dead for the moment, then yeah, employers ought to keep up with their traditional benefit offerings.
  • Neo_NtheMatrix
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    @Cheenoguy - The employees continued to work for Olive Garden, did they not? If they were so poorly paid, as some contend, wouldn't they just quit?
  • u
    Cheenoguy
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    @Neo_NtheMatrix
    Funny. You were just telling me the other day how there were no jobs.
    If you work full time and can't provide for even yourself you are underpaid. Not that I expect you to understand the value to the economy of people actually having money to spend.
  • Neo_NtheMatrix
    !
    @Cheenoguy - The job problem is a recent condition, starting in 2009. Many of these Olive Garden employees have been working there longer than that.

  • View all 7 replies >

  • u
    RobertJHarsh
    !
    I wonder where Olive Garden is hurting because every time I go over to one, the place is packed. What they'll do is attrition out full time workers so no one really makes a career out of being a server, host, or a bartender and make them part-time just in time before 2014. In fact, I can see some kind of a "part time" system put in place were only the manager, asst manager, exec chef, and sous chef are all full time, the rest are part time workers. This plan would "please shareholders" and help with profits. Just wait. Bookmark this.

    I like breadsticks and the donuts. Yummy!
  • Dan_Tien
    !
    "What that taught us is that our restaurants perform better when we have full-time hourly employees involved," McAdam told the Associated Press. What it really taught them is that it doesn't pay to offend a large percentage of their customers.
  • PNWest
    !
    These conservatives are going to get us to a healthier America in spite of themselves. Chick-Fil-A, Dennys, Applebees, Papa Johns, Jimmy Johns, Olive Garden have all helped liberal America get healthier by us boycotting their High Fat/High Sugar foods. It is good news when these right wing CEOs flap their lips about Obamacare and have their stock prices hit. Unless you own their stock.
  • MRMacrum
    !
    Low Priority on my worry list. Businesses have to adapt all the time. Olive Garden should not even had made this an issue. They get no sympathy from me. The fear over the Health Care law is over blown.
  • NormalFlora
    !
    Darden is notorious for treating their servers like crap. They get away with paying them below minimum wage because "they earn tips" but then have them illegally doing things at this reduced wage that DO NOT involve direct customer care.
  • Denizen_Kate
    !
    I would prefer a single-payer system, but since that doesn't seem likely, and the costs keep going up, then employers probably should be required to continue contributing to the cost for full time workers.
  • PoliticalSpice
    !
    And don't you just love this story! I read that papa johns, dennys and applebees all lost money cause of this anti- worker nonesense. Great news. And it happened kind of spontaneously.
  • DarthSidious
    !
    Welcome to Amerika where you can be yourself and be an individual, long as you agree with everyone else. What most people in this country fail to realize is this country was founded upon dissension and not bowing to the government. Our Founding Fathers would be ashamed of the passive complacency the vast majority of sheep in this country have become.
  • JustTheFacts
    !
    It's no companies responsibility to take care of their workers for the rest of there life! You get a salary and if you want healthcare then pay for it out of your own pocket. If you don't like your salary then quit or better yet start your own business since you idiots think it's so easy! Stop running the price of healthcare up for those of us who are self-employeed or a small business! Not everyone can be a parasite and leech off the government or a big corporation!
  • Ashstop
    !
    Thank You!!
    Well said!! Soon only the big companies will be around, it will no longer be profitable for small business to stay open!
  • PoliticalSpice
    !
    Maybe no company has the responsibility to take care of someone for the rest of their life, but large companies do have a responsibility to provide health insurance. Thats the law. Deal with it.
  • Ashstop
    !
    It will all be passed to the consumer, it's all simple math, when the cost to stay in business goes up either lay off workers or go up in prices, increase in price would bring in more revenue "IF" the number of consumers stayed the same, the people that could only afford a $40 meal for 2 once a month will now need $60 to eat there, it's simple math.
    Small businesses that are already struggling will simply close down,... Another win for the Obama group
  • Zazziness
    !
    I thought giving tax breaks to the rich means they'll run around to every small business in the U.S. and make sure they keep them going. Or at least you'd sure think so after all the times Republicans have claimed cosseting the wealthy means we all thrive.
  • Ashstop
    !
    @Zazziness
    Yea, that's the mindset of most till reality sets in, without even placing blame look at Hostess... Maybe (50?) rich people lost their income and 18,000 lost their job! A big win for everybody!!! At least those 50 rich folks don't have any income!! Now I understand.
  • Zazziness
    !
    @Ashstop Those "fifty rich folks" drove the company straight into the ground. Tell me, if you knew your CEO had given himself a 300K raise *while in bankruptcy" and then he came crying to you mentioning you're going to need to tighten your belt, would you lick his toes or would you find another job? The folks at Hostess decided another job would be the best option but maybe you're into being trampled mercilessly. Shrug. Some people are.
  • Ashstop
    !
    @Zazziness
    Ask those 18,000 when their unemployment runs out, surely you don't believe they all went to better jobs? If you do that's not saying much for the people that are unemployed and can't find work... I was using Hostess as an example of the rich losing income hurting the rest of the company,( I agree it was wrong about the CEO's of Hostess but that wasn't what I was trying to say!)
    If government makes small businesses that are struggling pay $1000's of dollars more in benefits to their workers then the cost for the same amount of labor for the struggling companies will sky rocket! Small business go under every year, no way this will not cause many more to fail!! Sure! Some wealthy owner will have paid his " fair share " and lost his business ... But what about all the workers? Will they be happy knowing they had a job last year and IF the had a job this year the would have had free insurance?
  • u
    ithink2
    !
    @Zazziness Really? If this is how you think the economy works then I can see why you wouldn't understand what was going on. The 'rich' don't have to run around to every small business. If publically traded, then the 'rich' invest thru the market. If the small business is not publically traded, then many will seek the individual investors to provide capital or at minimum guarantees to the bank for lending to the business. But we are not talking about the truly rich, we are talking about the $250,000 dollar guy who reports business income thru personal income tax.

    That $250K is not personal income, it's the business income. If that guy took all that money as a paycheck, then the business would close it's doors. This is the guy the tax rate increases would hurt.

    Our biggest issue now is that banks are not lending and investors are waiting to see what ramifications the new normal will have on their portfolios.

    We do thrive in a lower tax environment. In 2007, the federal government had more tax revenue then at any time prior to or since. We had less than 5% unemployment for 11 of 12 months, December 2007 had a 5% unemployment rate. We were fighting two wars. In 2007 we spent $163 billion dollars more than we took in, the deficit.

    In 2012, we spent $1.1 trillion dollars more than we took in. One war, unemployment just now below 8%, with more unemployed today than at any time in the last 30 years. We have spent more than $1 trillion dollars over what we have collected in each of the last four years.

    We do not have a revenue problem, we have a spending problem. Taxing the top 1%, 100% of their income will not pay for the 2012 federal deficit of $1.1 trillion dollars.

    If we let all the tax cuts expire that would produce about $500 billion dollars in additional revenue per year. That would not pay for half of what we over spent in just this last year.

  • View all 9 replies >

  • Keyjo
    !
    In the U.S.B.R.(United States Before Reagan), most employers provided health insurance to their employees at very low rates. The insurance was affordable because they were part of a "group plan" getting "group rates." A high volume of clients meant a co-op more or less. The U.S.A.R.(United States After Reagan) had become a hive of capitalist greed adapting the "let them eat cake" mentality.
    Insurance should become nationalized and operated as a non-profit industry. That along with big oil and the banking industry.
    It's time that the good of the many outweighs the good of the few.
  • Zazziness
    !
    Yup, they failed to recognise there has been a shift in national viewpoints. Quite a few conservatives have been caught off guard by that.
  • u
    KyleMFb
    !
    If they want healthy employees then they should offer healthcare I'm sure giving your workers health insurance is cheaper then your workers missing work plus business are breeding grounds for germs anyway
  • Bobolinsky
    !
    Imagine if health insurance companies had to compete for business the same way that car insurance companies do.

    Why are employers the health insurance middleman to begin with?
    The reason we have employer provided health insurance is government meddling in the economy by FDR. Wage controls caused employers to look for other ways to attract and keep the best and brightest. Employers started providing health insurance. Then the crony capitalists went to their cronies in government and got themselves a tax break for providing insurance.

    And now we have a distorted heath insurance market that caters to the purchaser (employer) instead of the consumer (employee). Another down side is that the large corporations often self insure since they have a large enough risk pool on the payroll. small and medium-sized businesses however have to deal with the additional cost of not only providing health insurance but also all the time and cost of shopping for, negotiating for and maintaining health insurance.

    Take the tax break away from the employer (middleman) and give it to the employee (consumer). Free up the free market to do what it does best by allowing people to buy insurance across state lines. Insurance won;t need to be forced to allow parents to keep their college student on their plan even if they're over 26. Heck, the insurance company wouldn't even care if the over 18 y/o is a student... sort of like car insurance.

    Think health insurance commercials like the car insurance commercials we see today. Free Quote! Compare Online! Highest Customer Satisfaction Rating of all the Competitors!

    So how do we get there from here?

    Step 1- Repeal Obamacare...

    Alternate Step 1- Endure the descent into socialized medicine and keep reminding people that there's a better way.
  • Bobolinsky
    !
    And Welcome to Politix Lisa. I apologize for not noticing earlier. I used to read every story on here critically and the first step was always to see who wrote it.

    I've been thinking for awhile that Politix needs another writer. It's just that I've been thinking that Michael needs help... not Mary, Dain and David.
  • u
    commonsense51
    !
    This is exactly what the GOP said would happen with Obamacare. Businesses will lay off workers, cut hours in order to stay profitable. We will all be paying more for dinners at Olive Garden. When will Democrats ever understand that when you tax someone, they will pass the cost onto their patrons. I don't know about you but i am sick of coddling and supporting dead beats who abuse drugs, alcohol, sex, etc. If a person chooses to screw up his life, he should not have free healthcare on the backs of tax payers.
  • jessejaymes
    !
    Shouldn't be eating at Olive Garden anyhow. It's MSG + bad cholesterol + salt and sugar calories + overpriced. Bad Olive Garden. Junk food.
  • Phreakwars
    !
    You mean big corp business will have to sell their food at the same prices mom & pops do to stay competitive? OH THE HORROR !!!
  • u
    commonsense51
    !
    @Phreakwars You have got to be kidding. The 30 million people that Obama added to the healthcare on the backs of tax payers. Do you actually think most of these people will be able to afford the expensive Obamacare? Most people who do not get health care is because they can't afford it. Do you think a law mandating they must now purchase it will change anything but raise taxes on those who will subsidize these people. They will magically fall under the income limits for free healthcare. These income limits are always way too high. They will be subsidized by the middle class as always and our premiums will skyrocket. Where have you been for the last 30 years watching our health cost go up. This is just one more socialist Government program funded by the middle class all to grow the democrat electoral welfare base.
  • Phreakwars
    !
    @commonsense51 afford the expensive Obamacare? They will be purchasing their insurance from insurance companies, not the government. Did you forget about the exchanges? And how do you know it will be expensive? Anything to back that up besides fear mongering/
  • o
    Sonny
    !
    I know these guys would start to back off of this "fire workers because of Obamacare" nonsense....Most Americans can see right through those "sour grape" tactics and did not appreciate this and other companies taking out their wrath on the regular working guy/gal...And, after all, this is still America...And, yep you guessed it...MONEY TALKS & their political BS posturing...WALKS!...Seems that all of those holier than thou "job creators" would much rather be rich than politically "right"...LOL
  • jessejaymes
    !
    As I told Red Lobster in a recent email, I don't really care what they do about Obamacare. Their service and food quality is not even remotely close to what it was 10 years ago. Which is unfortunate since I used to love Red Lobster and ate there several times a month. But I don't anymore. Because? Their food SUCKS.
  • Fishbone345
    !
    Boy is that the truth. I remember a time when Red Lobster was one of the nicer places to get seafood and or steak at. How times change, now they are the ghetto of restaurants.
  • jessejaymes
    !
    @Fishbone345 They really are. I used to love their seafood platter but now like I told them in my email, if I want to eat something that tastes like seasoned cardboard I can do that a whole lot cheaper at McDonalds.
  • joyshusband
    !
    I agree, and Red Lobster is now the number one place for how do I say, low budget Appalachian Americans to propose to the mother of their brothers kids.
  • o
    Sonny
    !
    That cowardly tactic would never have stayed "quiet" for very long...And if they have the unmitigated gall to do that to regular rank & file workers...Then they should have the guts to do it out in the open..
  • Jack-Black
    !
    @Sonny nah....do it quietly and behind closed doors just as the cowards that past the health care take over bill did. Just for good measure the should throw in a few "Cornhusker type" bonuses for managers who save the company the most cash.
  • o
    Sonny
    !
    @Jack-Black Well the passing of the ACA--was hardly done "quietly or behind closed doors"....Far from it! But if this or any other company wants to "punish" innocent workers...Then the rest of the American public needs to know, so that they can decided if they want to patronage this place anymore in the future.
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