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Prepping for Obamacare, Olive Garden and Red Lobster Cut Workers' Hours ^ | October11, 2012 | Mike Shedlock

Posted on 10/11/2012 11:45:23 AM PDT by Kaslin

In hopes of reducing the impact of Obamacare, Olive Garden and Red Lobster are reducing hours and studying the impact.

Right now, this is just a small test, involving only four stores markets. However, if large chains are testing in that direction, no doubt other companies are doing the same. I also suspect smaller chains have already shifted to that model completely.

Please consider Prepping for Obamacare, Chain Cuts Workers' Hours.

The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting the impact of looming health coverage requirements.

Darden Restaurants declined to give details but said the test is only in restaurants in four markets across the country. The test entails increasing the number of workers on part-time status, meaning they work less than 30 hours a week. Under the new health care act, companies will be required to provide health care to full-time employees by 2014. That would significantly boost labor costs for businesses.

About 75 percent of Darden's employees are currently part-timers.

Given the challenging job market, Darden has been able to offer lower pay rates to new hires. Bonuses for general managers have been reduced as sales have stagnated. Servers at Red Lobster are handling four tables at a time, instead of three.

And last year, the company also put workers on a "tip sharing" program, meaning waiters and waitresses share their tips with other employees such as busboys and bartenders. That allows Darden to pay more workers a far lower "tip credit wage" of $2.13, rather than the federal minimum wage of $7.25 an hour.

Darden isn't the only restaurant chain looking at managing labor costs.

This summer, McDonald's Chief Financial Officer Peter Bensen noted in a conference call with investors that the fast food company was looking at the many factors that will impact health care costs, including the number of full-time employees.
Like One, Like All

There you have it, right at the end. McDonald's is looking at part-time work as well, hoping to avoid the impact of Obamacare.

Are any major restaurant chains not doing the same thing?

So, let me repeat the same questions I asked on Tuesday: Is Obamacare Responsible for the Surge in Part-Time Jobs? What About Obama's Defense Layoff Suspensions?


In response to the above article "StockBuzInvestors" wrote ...

Hello Mish

Having one last 19 year old who hasn't flown the coop yet, I took it upon myself over the last year to help him and his numerous friends look for work down here in sunny Dallas.

Here are a few observations.

  1. Companies have cut back as many employees as possible to under 32 hours so as to avoid having to pay any benefits
  2. Christmas hiring actually began in September and is winding down in mid-October. It is definitely ahead of schedule.
  3. Temp agencies are having a field day, absolutely flooded with applicants and temporary, not full time permanent positions.

1, 2, 3
More Like 1-2-3-4

  1. Outlier that will be revised lower, later
  2. Reversion to mean from three previous bad months
  3. Early Christmas Hiring
  4. Obamacare

I suspect all of those came into play. Assigning appropriate weights is not a simple task.

For more discussion, please see Mish on Capital Account: IMF Downgrades, Unemployment, Participation Rate, Conspiracies; What is the Best Way to Measure Unemployment?

KEYWORDS: 2012; democrats; obama; obamacare

1 posted on 10/11/2012 11:45:27 AM PDT by Kaslin
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To: Kaslin

Could it be any other way?

2 posted on 10/11/2012 11:50:35 AM PDT by SMARTY ("The man who has no inner-life is a slave to his surroundings. "Henri Frederic Amiel)
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To: Kaslin


3 posted on 10/11/2012 12:00:28 PM PDT by slickdain (USA now belongs to America ... wait in this line for your taco and unemployment check!)
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To: Kaslin

All business owners take heed. If you still don’t believe our country will be bedlam when the commies plans come to fruition, you are going to have a rude awakening. Obamacare will destroy all businesses in this country. If you don’t stand up and fight today, tomorrow it may be too late!

4 posted on 10/11/2012 12:03:56 PM PDT by gr8eman (Ron Swanson for President!)
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To: Kaslin

Don’t worry. Obama will fix this in his next term. If you even walk past the time clock your considered eligible for Zero Care.

5 posted on 10/11/2012 12:17:00 PM PDT by cableguymn (The founding fathers would be shooting by now..)
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To: Kaslin

If Obama gets elected, I wonder how long it’ll be before he passes some decree forcing business to not only hold onto workers, but add more. Obamacare is his baby and I doubt he’ll let reality defeat it without a fight.

6 posted on 10/11/2012 12:33:42 PM PDT by RWB Patriot ("My ability is a value that must be purchased and I don't recognize anyone's need as a claim on me.")
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To: Kaslin


Cuts will also take place at LongHorn Steakhouses.

7 posted on 10/11/2012 12:48:33 PM PDT by upchuck (I miss my dog Snoopy. May 16, 1997-September 24, 2012 -- 15 years, 4 months. Forever in my heart.)
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To: gr8eman

“All business owners take heed.”

Some may see this as an excuse to cut healthcare altogether (as well as all of the other benefits those former full-time employees won’t receive now). American workers are more screwed than American businesses...

8 posted on 10/11/2012 2:40:24 PM PDT by kearnyirish2 (Affirmative action is economic war against white males (and therefore white families).)
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To: Kaslin

2 full-time employees turn into 3 part-time - 1 new job for Obama and the ObamaMedia to brag about.

9 posted on 10/11/2012 4:30:20 PM PDT by LZ_Bayonet ( I AM THE TEA PARTY LEADER !)
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To: LZ_Bayonet

Well that brings the employment numbers up in their logic

10 posted on 10/11/2012 4:33:28 PM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: RWB Patriot

If he gets reelected, he’ll need another term to finish what he couldn’t do in his first term and in his second term

11 posted on 10/11/2012 4:35:47 PM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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