[Congressional Record (Bound Edition), Volume 157 (2011), Part 4]
[Senate]
[Pages 5375-5376]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      PRIVATE SECTOR JOB CREATION

  Mr. ALEXANDER. Mr. President, last month marked the 1-year 
anniversary of President Obama signing the health care bill into law. I 
believe it was an historic mistake. We have talked about the health 
care law in a variety of ways. One thing we have said is that at a time 
when our country needs to make it easier and cheaper to create private 
sector jobs, the health care law makes it harder and more expensive to 
do so. Someone might ask: How could that happen? This morning I wish to 
mention a few examples of how it actually is happening, how the health 
care law actually is making it harder and more expensive to create 
private sector jobs.
  Last September I met with about 35 chief executive officers of chain 
restaurant companies. According to the Bureau of Labor Statistics, the 
retail and hospitality industries are the largest employers in the 
United States, second only to the U.S. Government. Food services and 
drinking places provide roughly 10 million jobs. Most of these are 
first-time job seekers and low-income employees--the young and the poor 
companies that provide a huge number of jobs to low-income Americans.
  One of the chief executive officers I met with said his company had 
been operating with 90 employees on the average, and as a result of the 
health care law, their goal was to operate with 70 employees. That is 
fewer jobs. There were many other examples of that around the room.
  Many of the attendees are on the National Council of Chain 
Restaurants. They have significant concerns about

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the law, and they provided me with specific examples.
  One restaurant chain based in Tennessee with worries about the law is 
a company called Ruby Tuesday. Ruby Tuesday has 24,000 full-time 
employees and 16,000 part-time employees.
  According to Ruby Tuesday, the employer mandate will cost them 
roughly $47.5 million--$2000 penalty/per employee/minus the first 30 
employees--yet their annual net income last year was just over $45 
million. In other words, the cost of the health care law to them equals 
the entire profits of this multibillion dollar company. Ruby Tuesday 
says as a result, it will have to reduce its workforce by 18 percent in 
order to hold their profits even. The company will increase the hours 
for their full-time employees and reduce their overall workforce in 
order to reduce the number of people for which coverage would be 
required.
  The problem we are talking about is that the new law requires 
employers who don't provide acceptable coverage to pay a ``fair share'' 
penalty of $2,000 per full-time employee. A full-time employee is 
defined as someone who works 30 hours a week instead of 40. We can see 
that a company such as Ruby Tuesday, with that many employees, would 
have a big cost, $47.5 million, which equaled its entire profits for 
the year.
  Another restaurant chain, White Castle, is also concerned. It said 
that according to their internal estimates, the health care law's 
provision imposing penalties for employer-sponsored health plans, whose 
costs to the employee exceeds 9.5 percent of that employee's household 
income, would be particularly punishing. In its present form this 
provision alone would lead to an approximate increased cost of over 55 
percent of what White Castle currently earns in net income. This 
devastating impact would cut future expansion and job creation by at 
least half. The impact would be predominantly felt in low-income areas 
where jobs are most needed.
  A representative of the National Retail Federation testified in 
February about another large chain quick service restaurant--QSR--and 
its potential job loss. This company preferred to remain anonymous, but 
the chain estimates that the incremental cost to comply with the new 
law is $10 to $15,000 annually per affected restaurant which across the 
entire system could be $50 to $75 million in incremental costs a year. 
This would wipe out one-third of that system's profits per year, 
potentially eliminating 10 percent of its stores, which means hundreds 
of restaurants and the potential elimination of 12,500 jobs.
  There was another example, a large franchise system with multiple 
casual dining restaurant concepts and projects.
  They estimated the average cost per restaurant in their system of the 
new health care law would be $237,000, which equates to a systemwide 
cost of providing health insurance benefits to full-time employees of 
almost $806 million per year. If all of this chain's small business 
franchisee owners elected to pay the employer penalty instead of 
providing insurance, the cost would be reduced but to just over still 
$84,000 per restaurant or a savings of $286 million systemwide. So to 
cope with the increased costs of the health care law, the employers who 
are restaurant owners--and these are the largest employers in America, 
they employ the most people in America except for the U.S. Government--
are seeing their costs go up and, as a result, there are fewer jobs for 
Americans.
  Republicans believe it would be better to reduce health care costs 
step by step so more people can afford to buy insurance instead of 
expanding a system that costs too much, and we will continue to 
advocate that position.
  The important thing to remember about the law--we have heard it said 
it hurts Medicare, it adds regulations, raises taxes, and individual 
premiums are going up--is that it makes it harder and more difficult 
and more expensive to create private sector jobs at a time when our 
country should be dedicated to making it easier and cheaper to create 
them.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Brown of Ohio). The Senator from Alaska is 
recognized.

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