Small Business Owner Fears Obamacare's Impact on Jobs and Economy

In 2006, when Indiana small-business owner Scott Womack purchased a development agreement to expand his IHOP franchise into Ohio, he had no idea Congress would pass a massive overhaul of the health care system four years later.

Today, one year after that legislative overhaul became law, Womack is very aware of Obamacare -- and of its effects on his plans for growth.

Under the year-old law, Womack must provide health insurance to all full-time employees beginning in 2014. Right now, he employs nearly 1,000 full- and part-time workers and already offers insurance to his management staff. He simply does not know how he'll generate the revenue to do more.

Womack estimates the cost of the law to his company will be 50 percent greater than his company's earnings -- in other words, beyond his ability to pay.

That's not because his company of 12 IHOP restaurants in Indiana and Ohio is unprofitable. Quite the opposite, in fact. By industry standards, he's doing well. But labor-intensive restaurants generate profits of just 5 percent to 7 percent per employee.

With fears about how he'll afford to provide health insurance with those low profit margins, Womack is worried about his expansion plans in Ohio. He can't exactly cancel his development agreement. But he'll only be able to fund his new restaurants -- and the construction, real estate and manufacturing jobs that would go along with them -- if Obamacare is repealed.

"If the health care reform law is not repealed or if the employer mandate doesn't go away, we're going to have to take drastic action," Womack explains.

From his perspective, the law represents Congress' fundamental misunderstanding of important differences among industries. He's frustrated that so few lawmakers sought input from people like him -- but he's doing what he can to speak up now to offer a glimpse into the law's effects on small-business owners.

Category:

News & Politics

Tags:

• Obamacare
• Mike Pence
• health care
• small business
• health insurance
• health care reform
• PPACA
• employer mandate
• IHOP
• Scott Womack
• restaurant
• Indiana
• Ohio
• heritage
• heritage foundation

[PostalNerdGamer21]

I would rather have a job then health insurance. That's my two cents.

[dfrank2356]

I never said people shouldn't be allowed to have health care, I just don't believe someone else should pay for it. I believe hospitals should be forced to care for all people, not just those who have the money. The hypocratic oath taken by doctors should take precedent, and no hospital should be allowed to turn away someone who is sick. The major problem with health care is that there are many who have top notch health care who abuse the system. That and malpractice are pushing prices higher

[flany1960]

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[LanceWinslow5]

ObamaCare is an absolute unemployment nightmare. Trust me!

[moisiss]

It's hard for me to feel bad for anyone who funds their life on the back of basically slave labor. Most "front of house" restaurant employees are paid WELL below minimum wage ($2.13/hr in my state) from the restaurant and the"back of house" are, at best, slightly above minimum wage. To hear richie-rich crying about how he can't afford to offer a health insurance plan to the people that make his business possible comes across as a bit ridiculous to me.

[submitbannerusa1]

Great video...i do believe if your going to work hard you may as well work for yourself...thumbs up!

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[luvcheney1]

@ramhoves Lets, see, a $2 million annual sales restaurant takes in about $40,000 a week. 5% of that is $2000 a week, of $8000 a month. Think you can buy insurance for 50 employees, at $8000? Gee, wish I could get insurance for $150 a month. Sure, maybe with an $8000 annual deductible you fucking idiot.

[luvcheney1]

@TheAerialbomb 37% of ALL the new jobs created since the crash are in one state, Texas. With less than 8% of US population, 37% of the new jobs. No high taxes in Texas, motherfucker............... BTW, China has a 20% Corp tax rate for exports, in Calif the rate is 43.8%. Canada is 16%. Drop dead, moron.

[TheAerialbomb]

@luvcheney1 Actually, your house if filled with crap made in China because the big corporations can make it there for 50 cents cheaper. Of course, there is no one left with money in the USA to buy the crap so all the new factories and workers will be added in other countries. Bush broke the home piggy-bank that people were using to fund their buying habit. Republicans can spew their reduce taxes crap all day to you dummies but if there is no demand, there is no need for new jobs.