ACA Incentivizes Two More Asshole Companies

Don't Eat at Wendy'sAh, incentives! Economists love them, people respond to them, and politicians fuck them up. MSNBC is reporting that Wendy’s and Taco Bell franchises are cutting work weeks down to 28 hours to avoid penalties for not providing healthcare. This is understandable, of course. These are just business decisions. And they are not new.

Don't Eat at Taco BellAlthough I do not think that this was part of the thinking, ACA is becoming part of the corporate welfare system. By reducing work hours, these companies manage to make healthcare the government’s problem. But it is worse than this because it is likely to create a chain reaction. This is because it will affect the behavior of what we normally think of as good companies: the ones who will provide healthcare anyway. If their competitors manage to provide the same benefits (healthcare) without paying for it, these good companies will be at a distinct disadvantage. And thus, they are likely to stop providing the benefits.

Matt Yglesias talks about this today. And his take is that this eventually leads to a society in which everyone gets their healthcare through the government exchanges. In general, that’s true. But it also does this by reducing everyone’s work week down to below 30 hours. That might not be such a bad thing. After all, Americans work too much. What’s more, that is an easy way to get to full employment. But it doesn’t seem like the right way to achieve this goal. I think it would have been better to go with a single payer healthcare system and let people decide for themselves how much they want to work.

Regardless, mark Wendy’s and Taco Bell on your list of asshole companies to avoid.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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