90.9 WBUR - Boston's NPR news station
Top Stories:
PLEDGE NOW
Health

Co-owner Jeff Trenam goes over the lineup of the evening dinner menu with his wait staff at the Blue Plate restaurant in San Francisco on Aug. 29. Dozens of San Francisco businesses charge diners an extra fee to pay for employee health care. (Eric Risberg/AP)

At a recent meeting with a group of successful restaurant professionals, there were the predictable questions — like, “How do you obtain financing for your nth venture?” — but there was a surprising inquiry from a soft-spoken young chef who asked: “If Obamacare stays in place, will you reduce your staff’s hours so that they are no longer full-time and thus you won’t have to cover them under your health plan?”

As the only business owner from Massachusetts, where a health care law that closely resembles the president’s Affordable Care Act has been in place for the last five years, I shared my experience (and tried to hide my shock). No, we did not reduce hours — nor did we even consider it. If someone strong is working for you, it seems counterintuitive to have them work less, even if it costs you a bit more.

My business has absorbed the costs associated with the new health mandate in the same way we absorb rising fuel surcharges or higher prices of flour. They cut into our profit, sure, but when I weigh the cost … [against] knowing that my 24-year-old barista can’t afford coverage because he only makes $10 an hour, I willingly take the cut to my bottom line.

My business has absorbed the costs associated with the new health mandate in the same way we absorb rising fuel surcharges or higher prices of flour. They cut into our profit, sure, but when I weigh the cost of paying staff to cover for chronically sick employees who don’t see a doctor because they don’t have one, or the pressure of knowing that my 24-year-old barista can’t afford coverage because he only makes $10 an hour, I willingly take the cut to my bottom line.

Most of the country has yet to go through this and there is great concern among restaurant owners about how they would pay (only small businesses that employ over 50 people would be affected). I was dismayed to hear one owner say, “We might have to reduce our staff’s hours to avoid paying this extra burden.” The panelist in question has 170 employees with only about a quarter of them on the company’s health insurance plan. I could see his horror as he mentally calculated his annual costs if he was required to provide insurance for all of his employees.

Naively, perhaps, I couldn’t believe that a thriving business would take those measures to reduce costs. But then a few days later I read that the Darden Restaurant Group (Olive Garden, Red Lobster, Capital Grille, among others) was test-running an almost-identical plan in select markets. They were cutting full-time staff to 30 hours per week in order to avoid paying health benefits.

The reality is that we live in the only major industrialized nation where health care is primarily provided by employers. Whether you believe that this is a good or bad system, a fair or unjust expectation for small business, the fact remains that the average person’s best bet for health insurance is through their employer.

I’ll never forget my surprise when I switched careers and started working in a restaurant after two years as a management consultant, where I took for granted benefits like health insurance and paid vacation. I was given the option of paying full premium for insurance, which I did, and which wiped out half — yes, 50 percent — of my paycheck. At such a hefty cost, they told me, I was one of the only employees to sign up for health coverage.

My staff, mostly young adults recently out of college, believes they are invincible. Most don’t want to spend any part of their hard-earned paycheck on the chance that they might someday get sick. And they most definitely don’t want to if the premiums are half of their wages.

Even if I had no obligation to do so, I would still gladly split their insurance premium with them to make it more palatable — and in recognition of the fact that there isn’t a better option. And of course, having insurance also increases their chances of staying healthy and not calling out sick.

I’ve had to pay more to insure my staff and I accept that. In addition to creating a healthier workforce, it’s important to establish fair expectations from employers. And in the final analysis, I would not consider profit made on the backs of uninsured workers well-earned.

The views and opinions expressed in this piece are solely those of the writer and do not in any way reflect the views of WBUR management or its employees.

Please follow our community rules when engaging in comment discussion on this site.
  • http://twitter.com/kmuskiewicz Kristina Muskiewicz

    Yet another reason to love Joanne Chang and her restaurants.

  • J__o__h__n

    I’ve always enjoyed eating their food and I’m glad to learn that Flour treats their employees fairly.
    Yet another reason to never step foot into the Olive Garden or Red Lobster. I can’t believe someplace as expensive as the Capital Grille can’t afford to provide heath care for its workers. Disgraceful.

  • Yoshi

    Thank you, Ms. Chang, for such a considered and well-presented view of this issue. It’s heartening to know that not all employers rate their bottom line as more important than the well-being of their employees. It’s also wonderful to hear the logical and financial sides of this argument being presented: it’s beneficial to the company to have employees who can look after their health properly; and also, if the U.S. is going to persist in being a country (*the* country) where health insurance comes from employers, then employers have to go along with that. And no employer should be allowed to cut hours to avoid paying health insurance, that’s just playing dirty pool.

  • Leslie

    Bravo Joanne! I worked next door to Flour on Farnsworth Street for 5 years. The staff was unfailingly pleasant and thoughtful. I’m glad to know this further good thing about Joanne Chang, I know that I will never again go into Capital Grille, Red Lobster or others in that group. I also will have to find out if my favorite restaurants do this horrid thing to their staff and find other favorite restaurants.

  • alison hearn

    Thanks for leading by example.

  • Brian

    Joann Chang is amazing! I’ve been living in South End for 6 years. I love Myers + Chang and Flour. Her respect for her employees definitely comes through in the service. I hope the other South End restaurants’ owners read this.

  • Donna Williams

    However you treat your employees is how they will treat the customers.

  • beth

    Single payer health insurance in MA. It’s the only way. We still need to keep fighting for it. Why should we settle for a system that doesn’t work for anyone, neither the employees nor the employers? It’s time to sever the employer based health insurance relationship and move to a system that everyone pays into and everyone gets covered, regardless of their employment status. It’s not so outlandish, folks. Many countries in the developed world provide this service to its citizens and also happen to have robust capitalist economies. It can be done.

    Why would anyone want something as precious as their health (and it’s care) to be so attached to something as transitory and, nowadays, temporary as a job? It makes no sense to me.

  • Sean

    wonderful article Joanne, and kudos to you for putting your employees first. clearly, owner-operators like you understand just how critical human capital is. you mentioned you are taking the ‘hit’ of increased costs directly from your bottom line. my concern is, would the lower profit discourage, or at least give you pause from expanding your business at that location or new locations?

  • allswellhere

    Kudos to Joanne – a person of conscience and common sense. What stupid employers don’t realize is that every time someone uninsured gets ill, the insured pay for it out of the uninsured pool or when hospitals renegotiate their rates with insurers and take into consideration the bills they have absorbed – leaving the insured to pay higher premiums for those who don’t carry insurance. Double whammy to already high premiums that they pay. It is an absurd system that puts insurance in the employers’ courts. The quality of coverage is all over the place, the overhead of dealing with multiple plans and their individual technicalities is a cost passed on to all receiving health care. But until we have a single payer system, we will continue to be the most expensive in the world and our low ranking of overall health in the world.

  • emob

    Thank you. Even though I’ve never been to your businesses, I think I’ll go now and recommend it.!

  • PM

    As a small restaurant owner in my 2 nd year of business I applaud ms Chang for her care of her employees ,I personally was only offered employer subsidized health care once in my 20 years in the business and that was in San Francisco , never in Boston ,while fully paying for my employees healthcare would cripple my business ,I myself pay for mine privately not thru the business thanks to Romney I was forced to ,I will now take a hard look at my pricing structure and see if I can emulate her ,l am also a Neighbour to both her restaurants in the south end and a big fan of the service I receive in her businesses – yes you tall waitress at Myers and Chang with the cool glasses !! While not nearly as busy as flour or M&C I hope to one day to offer health care to my staff as my most important asset is my staff and always will be .Joanne I will be frequenting your business’s more frequently and will urge others to do so too .
    Sincerely PM.

  • ChristineIam

    ((((Applause)))

  • Donna Caron

    Starbucks manages to provide health insurance for their workers.

  • http://everydayscholar.tumblr.com/ Adam Mandeville

    Thanks for presenting a balanced view of the issue: that it will cost a bit more, but it’s worth it if you believe in taking care of your employees. It’s better than the two alternatives you present of paying 50% of your salary or trying to never get sick.

  • JoelN

    Certainly an overhaul of the employer-provided health insurance system is in order, so that individuals can afford and purchase healthcare regardless of their employment status (and let’s have the debate about the pros and cons of a single payer system, versus the alternative non-governmental proposals). Until it does happen, let’s hope for more employers like the author.

  • Steven Kelly

    The Applebees chain has adopted the cut-back plan also. They allow their closing cooks, servers, and bartenders to get 40 hours while the rest are cut back to 30. Obamacare isn’t forcing companies to pay insurance, they are forcing them to cut hours. Now a hard working American needs to work two jobs just to get a 40 hour work week. Down with Obama! Down with Obamacare! Always wanted to yell that inside of an angry mob! Thanks for a well-written and thought-provoking piece. And thanks for biting the costs at your place, as a server, I can really respect you taking the hit. Wish these blood sucking corporate vampires would do the same.

  • MelissaJane

    Bless you. I spent my 20s as an uninsured pastry chef married to an uninsured cook, and the idea that that particular industry is somehow special and shouldn’t have to worry about health insurance for its employees is bewildering and frustrating to me. As you said, your business accepts other costs as part of doing business, including when those costs rise – as, for example, when rising oil costs push up food prices – finding ways to adjust its financial model as necessary. Why should paying a living wage and offering benefits considered standard in other industries be any different?

TOP