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Employers Should Discuss Downside of Bad Government Policies with Employees

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Another round of coordinated, nationwide quick-service restaurant protests occurred recently, with some low paid employees joining union-affiliated activists to argue for a $15 minimum wage and labor union representation.

It’s unlikely that the participating employees had heard the other side of the argument from their employers before walking out to attend.

That’s not a surprise. Restaurant employers and managers are rarely willing to engage with their employees on these types of issues, preferring instead to cede the moral high ground to activists and keep their heads down hoping that the storm will pass over their business. It rarely does for long.

With dozens of activist groups fighting for employees’ attention across a variety of platforms, and a seeming increased acceptance of workplace mandates among policymakers, restaurant employers can no longer afford to sit on the sidelines when it comes to engaging on these issues. In order to protect their workplaces – employees included – they should make it a practice to discuss the unintended consequences of bad government policies with their staff.

While some restaurant owners may not believe that it is their place to discuss policy issues with their employees, the sad fact is that if they don’t, it’s unlikely anyone else will. Most students in America don’t learn basic economic truths like the relationship between supply, demand, and price; the media and popular culture, meanwhile, largely glamorize social activism.

Employers, on the other hand, are part of a small group – that includes some special teachers, mentors, and spiritual advisers – who still have the power to impart real truths to people. They hold the trust and respect necessary to explain why many of the public policies put forth by activists are not in employees’ best interest.

Take the Affordable Care Act, for instance, which includes a mandate, that began this year, that requires businesses to pay for their employees health insurance if they employ 100 or more “full time equivalent” employees who work at least 30 hours a week. (Beginning next year, that threshold drops to 50 employees.)

Many employers predicted that such a mandate – while well-intended – would lead businesses to reduce the number of hours that they offer employees in an attempt to avoid the mandate, hurting the very people that the law was intended to help. And that’s just what’s happened.

A long list of well-known national companies, including White Castle, Jimmy Johns, and Regal movie theaters, have reported reducing employee hours below 30 hours a week — a trend which Census Bureau data seemingly confirms. The Wall Street Journal refers to these hour-poor employees as the “29ers.”

Or take a current example: the push for mandatory paid sick leave, a key issue for many high-profile activist groups and policymakers. While getting paid to watch daytime TV with a Kleenex box nearby sounds great, restaurant owners who have to cover the shift with a working employee recognize that this salary will have to be paid for by someone.

A survey by the Urban Institute suggests by whom. In San Francisco, following that city’s paid leave mandate, some employers “delayed or cancelled planned wage increases” or “eliminated vacation or bonuses” in response to the mandate. Similarly, a survey of service industry employers in Seattle by the Employment Policies Institute found that 18 percent reduced hours or cut staffing levels and 17 percent cut back on employee benefits or increased their cost in response.

While the specific details of how an employer should engage with their employees will vary by issue, pointing out these negative unintended consequences on employees’ career opportunities and paychecks should remain constant.

My organization, the Job Creators Network, a nonprofit started by The Home Depot co-founder Bernie Marcus, works to formalize this process. We call it “employer-to-employee education” or E2E, and see it as key part of the fight to inform people about how policies impact their livelihoods.  We also hope it inspires them to become more informed citizens.

While such an approach may rub some critics as paternalistic, it is far less so than the employer paternalism advocated for by activists, who call on businesses to cover a huge range of social issues long managed by the individual and — to a much lesser extent – the government. Business owners play a key role in explaining the downside of this approach.

Alfredo Ortiz is President and CEO of the Job Creators Network. 


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