Sunday, October 14, 2012

Restaurant chain uses Obamacare as excuse for cuts it was probably planning to make anyway

Laura Clawson for Daily Kos Labor

Thu Oct 11, 2012

Papa John's has company in the Obamacare fear-mongering game. Darden Restaurants, the parent company of Olive Garden, Red Lobster and others, is joining the pizza chain in threatening dire consequences stemming from the requirement that large companies offer affordable health insurance to employees working 30 or more hours a week. But where Papa John's has threatened to pass the 11 to 14 cent per pizza added cost it claims will come from insuring or refusing to insure their workers along to customers, Darden is sticking it straight to its workers by planning to make sure hourly workers just don't get the 30 hours a week that would tip them over into qualifying for insurance.

Here's the thing: Obamacare or no, this is completely typical behavior from Darden. The chain already keeps 75 percent of its hourly workers below 30 hours of work a week, and:

Darden has been aggressively keeping labor costs down. It has cut bartenders' pay and required servers to share tips with them. It also has eliminated busboy positions at Red Lobster and reduced the number of servers working each shift at that chain.

Labor costs as a percentage of sales have dropped steadily from 33.1 percent in fiscal 2010 to 30.8 percent in the most recent quarter.

What we have here is not some Obamacare cataclysm of good employers being forced to cut their employees' hours or go out of business. Rather, it's a food service sweatshop finding one more way to screw its workers. Darden is one of the 20 largest low-wage employers in the country; meanwhile, it was profitable in the last fiscal year and over the last three fiscal years, and has higher revenues, profits, operating margins and cash holdings than prior to the recession. In recent years, Darden has paid nearly $14 million in fines and settlements for wage theft.

It's a sad fact that almost any time you're eating in a restaurant, you're in a low-wage, low-benefits workplace. Usually, employers who've taken the high road are the only ones that stand out in the restaurant industry. But Darden has repeatedly distinguished itself by being one of the worst employers in an industry of bad employers. That it would use Obamacare as an excuse to cut the hours of the few remaining full-time hourly workers in an overwhelmingly part-time workforce is hardly a surprise.