“Government policies are stifling young, hungry entrepreneurs,” says Andy Pudzer, CEO of CKE Restaurants. Worst among these is ObamaCare.
About 40% of Mr. Puzder’s employees are part-time and therefore exempt from ObamaCare’s coverage mandates. “That percentage of employees will probably go up. … Through attrition, three full-time employees go away and you hire four part-time employees who basically have the same hours.”
As government raises the price of hiring living workers, by raising the minimum wage and mandating higher benefits, companies find it more efficient to replace humans with machines.
Mr. Puzder also expects fast-food restaurants to deal with ObamaCare by replacing workers with kiosks. “You’re going to go into a fast-food restaurant and order on an iPad or tablet instead of talking to a person because we don’t have to pay benefits for any of those things.”
Pudzer’s company is expanding rapidly and now has “3,300 restaurants in 42 states and 28 foreign countries.” It plans 300 new restaurants in the “business-friendly” state of Texas.
One place it is not planning to expand is California because “California is not interested in having businesses grow.” Compare how long it takes his company to get a building permit. In Texas, it takes 60 days; in Los Angeles, 285 days.
California’s cumbersome labor regulations have forced the company to “fire managers who don’t report their work hours because they present a legal risk.” He tells the fired managers “to go to Tennessee or Texas, where we’ll rehire them and they’ll learn entrepreneurial skills.”
Corporations based in California are increasingly moving “where labor and the cost of doing business are cheaper. The ultimate victims are middle-class entrepreneurs, like restaurant managers, and the low-skill workers they employ.”