There is No Free Lunch in Obamacare

Andrew Puzder writes Job Creation Is Price for New U.S. Health Law in Bloomberg, 12/26/11:

Excerpt:

Our company, CKE Restaurants Inc., employs about 21,000 people (our franchisees employ 49,000 more) in Carl’s Jr. and Hardee’s restaurants. For months, we have been working with Mercer Health & Benefits LLC, our health-care consultant, to identify Obamacare’s potential financial impact on CKE. Mercer estimated that when the law is fully implemented our health-care costs will increase about $18 million a year. That would put our total health-care costs at $29.8 million, a 150 percent increase from the roughly $12 million we spent last year.

To offset higher health-care expenses, we will have to cut spending on new restaurant construction, one of our largest discretionary spending areas. But building new restaurants is how we create jobs. An $18 million increase in our costs would more than consume the $8.8 million we spent on new restaurant construction last year, leaving nothing for growth. We will also need to reduce our general capital spending, which also creates jobs and allows us to improve our infrastructure and maintain our business. In summary, our ability to create new jobs could vanish.

The complexity of this legislation makes it hard to anticipate costs in the future. Our investments pay off — when they are successful — over the long term. Because we don’t know what our health-care expenses will be in two or three years, we are unable to determine with any certainty how much our investments will have to return for us to be profitable. All of that counsels in favor of holding off on new investments and saving our funds. We want to grow. But we are unable to do so knowing that large and undetermined liabilities will absorb funds we otherwise would invest for expansion.

HKO Comments:

Mr. Puzder speaks  eloquently how jobs are created and how government policies stifles that creation.  I hear this dilemma frequently, but few have stated it so clearly.

This administration has clearly demonstrated that it has no clue how the private sector works or how government policies impact private hiring.  Government has never created a single job: each job it has “created” came at the expense of at least one job in the private sector, often more than one.  They are capable, however, of killing job creation with its mandates and regulations.

I strongly recommend that you read the whole article. Tips to Carpe Diem for posting it as well.