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What the health care law means for the restaurant industry

U.S. President Barack Obama orders his meal at the Varsity restaurant in Atlanta, Georgia, on June 26, 2012.

Jeremy Hobson: Well one industry that is worried about those very penalties is the restaurant industry.

Karen Bremer is the executive director of the Georgia Restaurant Association and she's with us now from Atlanta. Good morning.

Karen Bremer: Good morning.

Hobson: Well, tell us about your concerns right now about what the health care law is going to do to the restaurant industry.

Bremer: The effect is going to be staggering. The estimates that restaurateurs were sharing with me yesterday -- they're looking at added costs to their insurance of almost $1 million in 2014. So the result of that is going to be that the market will be looking forward to reduced staffing sizes -- which is going to impact your service when you dine in restaurants; wages are going to have to be frozen or lowered.

Hobson: Was the restaurant industry basically then sitting back and hoping the Supreme Court would say this law was unconstitutional? I mean, were they not preparing for this as if it were going to go into effect ever since it was passed?

Bremer: Yes, as many restaurateurs this past year have said to me -- you know, I've said: what are you planning on, how are you dealing with it? These are the kind of estimates that we're getting: We don't know how to act because we do not know where this money is going to come from. It's been the white elephant in many an office in many a restaurant company.

Hobson: Now, the law only requires that places that have 50 or more full-time -- or the equivalent -- have health insurance provided by their employer, or they have to pay penalties. So I mean, this is not going to affect mom and pop places, I assume?

Bremer: Well, it'll affect the mom and pop place if they have more than one location; if they have more than 50 employees collectively. And the restaurants that have been operating on the edge and just starting to come out of this recession, those are the restaurants that will be closing.

Hobson: Karen Bremer is the executive director of the Georgia Restaurant Association. Thank you so much for talking with us.

Bremer: Thank you.

 

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.
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