[Congressional Record Volume 140, Number 65 (Monday, May 23, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 23, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
U.S. RESTAURANT CHAINS PROVIDE HEALTH COVERAGE TO FOREIGN WORKERS--AND 
   PROSPER--BUT WON'T CONTRIBUTE TO THE HEALTH CARE OF U.S. EMPLOYEES

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                          Monday, May 23, 1994

  Mr. STARK. Mr. Speaker, there has been a tremendous amount of debate 
recently about the proposed employer mandate to help pay for health 
care reform. Employers who hire minimum-wage or near minimum-wage 
workers are very vocal in their opposition to helping to pay for their 
employees health care coverage.
  These employers argue that paying for health care will cause them to 
close up shop. But before we jump to conclusions, let's look at some 
real numbers in one of the largest industries that hire low-wage 
workers--the restaurant industry. After looking at the numbers, it's 
clear that many of these U.S. companies pay for the health care of 
their workers in foreign lands--and prosper--but do not provide health 
care for their American employees.
  Data indicates that U.S. restaurant chains are growing steadily--even 
in light of two U.S. minimum-wage increases in 1990 and 1991. Burger 
King, to quote from its parent company's 1993 annual report, ``turned 
in another year of strong performance * * * Operating profit was up 
significantly over last year, achieved mainly through continued margin 
improvement and new store openings.'' Burger King opened 540 new stores 
in 1993.
  Dairy Queen's revenues have increased 136 percent over the last 
decade, from $131.9 million in 1984 to $311.1 million in 1993. The 
number of Jack-in-the-Box restaurants increased by 12 percent between 
1990 and 1993. Shoney's, Inc. reports in its 1993 annual report that 
``revenues of $1.14 billion were a record for the company and 
maintained an unbroken string of consecutive increases in annual 
revenues for the 34th year.''
  Remember, this business success is occurring in the years immediately 
following two consecutive increases in the minimum wage. While 
businessowners may have cried bankruptcy in 1989, by 1992 they were off 
to record earnings--and growth. Not only have these businesses done 
well financially, there was a 3.14-percent increase in the number of 
restaurants opening during this period.
  Many of these restaurant chains are also booming in the international 
marketplace. In 1993 you could find a Burger King in about 50 
countries. Pizza Hut, Kentucky Fried Chicken, and Taco Bell--all owned 
by Pepsi Cola--have a combined total of 6,312 restaurants in foreign 
countries like Canada, Australia, Mexico, Belgium, Spain, Japan, and 
Singapore. Dairy Queen has 762 foreign locations, including 542 in 
Canada and 112 in Japan.
  And sales are up in the international arena. Pizza Hut notes in Pepsi 
Cola's 1993 annual report that its international sales posted double-
digit growth in 1992 and 1993. Pizza Hut's profits increased in Canada, 
for example, reflecting higher net pricing, additional units, and 
volume growth. Taco Bell and Kentucky Fried Chicken also saw their 
international sales increase by double-digit figures in 1992 and 1993.
  And, yes, many of these U.S. companies provide health care coverage 
for their employees in foreign countries, but refuse to provide health 
care for American workers.
  For example, Pepsi Cola, which boasts its restaurant sales grew to 
$9.4 billion in 1993, an increase of 14 percent, quotes in its annual 
report that ``management believes strongly in, and has worked hard for, 
health care reform. [But] Pepsi Cola is opposed to * * * employer 
mandates.'' Unfortunately for Pepsi Cola, the company owns--not 
franchises--1,704 restaurants in foreign countries and therefore must 
pay for the health care of its workers in many of those countries, 
including Canada. If paying for health care is so expensive and will 
force companies out of business, how can Pepsi Cola afford to increase 
its worldwide restaurant locations by 41 percent from 1988 to 1993?
  We cannot be manipulated into letting some businesses pass the cost 
of health care onto other businesses and taxpayers. Everyone must pay 
their share--and if U.S. restaurant chains are paying for the health 
care of their employees in foreign nations, it is reasonable to expect 
the same for American workers.

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