[Congressional Record Volume 140, Number 107 (Friday, August 5, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 5, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
           THE REAL STORY OF PIZZA HUT AND EMPLOYER MANDATES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Texas [Mr. DeLay] is recognized for 5 minutes.
  Mr. DeLAY. Mr. Speaker, the Democrat leadership's approach to the 
process of health care reform is described best as full steam ahead and 
damn the public.
  One of the reasons we are asking for time for the public to see those 
bills that have not even been written yet is that all kinds of 
misinformation is being thrown out to the American people, and we must 
have time to respond to it so that the American people can see what is 
happening.
  We have finally found the people who can sell the Brooklyn Bridge--
the Democrat leadership.
  Mr. Speaker, Pizza Hut has the Nation's largest employment program 
for people with disabilities and the Nation's largest reading incentive 
program. Both of their corporate offices and their franchises 
participate in community based educational and recreational programs 
all over the country. Through their Harvest program, they feed the 
needy and help feed those who are victims of national disasters such as 
Hurricane Andrew.
  However, on July 15 the health care reform project, Hillary's health 
care commission, launched an attack on Pizza Hut in an attempt to 
convince the American people that mandates are benign. This 
misinformation was reiterated on the House floor here just last night.
  The project claimed that Pizza Hut was thriving in Germany and Japan 
where health care taxes are mandated and, claimed, therefore, mandates 
will work here too. Pizza Hut's experience, however, is just the 
opposite.
  Allan S. Huston, president and CEO of Pizza Hut, presented an 
explanation of his situation before the Labor and Human Resources 
Senate Committee on July 22. In his testimony he explains that his 
opposition to mandates is based on personal business experience. He 
says, ``I think mandates--employer and employee--are the wrong solution 
for America. * * * My view is anchored in actual experience in a number 
of foreign markets. From what I have seen of mandates in Europe and 
elsewhere, they contribute to the descending economic spiral of higher 
prices and unemployment.''
  Let us just go through the facts about Pizza Hut. In Germany Pizza 
Hut has lost money for 10 of the last 11 years. It finally began 
turning a small profit in 1993, hardly a good investment.
  In Japan, where Pizza Hut does not own its restaurants, or even a 
controlling share, its franshisee has not made a profit in the last 8 
years. Pizza Hut has only 66 restaurants in all of Germany and 64 
restaurants in all of Japan. It has more than that combined right here 
in the Washington, DC, area.
  Why? Because they have been able to flourish under what is left of 
the free market system.
  In the past 5 years it has built less than 50 restaurants in both of 
those countries combined, compared with building 1,700 restaurants in 
the United States. Between 1992 and 1993, Pizza Hut had added only 224 
jobs in Germany while it added 14,654 jobs in the United States.
  For a pizza that costs $11 in the United States, Pizza Hut must 
charge $19 in Germany and $25 in Japan.
  Hillary's commission claims that Pizza Hut could easily raise the 
price on pizza to pay for those mandates. But our experience in the 
United States is that customers respond to higher prices by eating less 
often in restaurants and less volume directly results in lost jobs.
  I guess the proponents of mandates for health care coverage want the 
companies in the United States and Pizza Hut to mimic the disaster of 
their companies and Pizza Huts in Germany and in Japan.
  In my State of Texas alone in a study commissioned by the American 
Legislative Exchange Counsel, they projected a job loss under the 
employer mandate type health care at 68,300 jobs in Texas alone. Of 
course, this does not account for the wage reductions employees must 
face. CONSAD Research Corporation estimated that almost one and a half 
million workers would face reduced wages, hours or benefits under 
mandated health care. And as I mentioned this morning, the majority 
leader believes that businesses can somehow absorb this cost. He said 
that the 1991 minimum wage increase had no effect on business. That 
just simply is not true. Pizza Hut had a resulting staffing decrease 
equivalent to the loss of 16,500 jobs because of the 1991 minimum wage 
increase.
  All of these incidents that I have been talking about, Mr. Speaker, 
point to just one thing. Pizza Hut's experience in other countries is 
indicative of the effects of mandates and they are bad for business, 
and they are bad for employees.

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