The Death of the Full-Time Employee

The Death of the Full-Time Employee
By: Todd M. Schoenberger, @TMSchoenberger

Here’s a news flash for you, and one that sometimes isn’t the most comforting to hear: Companies are in business to make money and those that are public have a fiduciary responsibility to shareholders.

I know to some of you, this is a difficult statement to digest. According to the dozens of messages sent to my hate mail folder on a daily basis, some of you actually believe businesses should simply hand-out products and services, and offer jobs—with full benefits—to each and every one of us. Yeah, the idea of taking the non-profit formula and spreading it across all of corporate America.

My unsolicited advice to those who think this way is to shut-up. We live in the land of reality and capitalism, so keep your thoughts of utopia to yourself.

This leads me to the hot potato subject of the day: Healthcare. You’re hearing a lot of rhetoric in the Presidential campaign about universal health care and providing benefits to all Americans, regardless of pre-existing conditions. Those on the Democratic side say America should pay the bill, give everyone all the medical attention they need. The GOP says something similar, only they know the country can’t afford such a hefty price tag. Either way, the dam is about to break because difficult decisions need to be made.

The first critical decision was announced yesterday by Darden Restaurants, Inc. (NYSE: DRI). As stated by the AP: The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting costs from President Obama’s healthcare law.

That’s right. Darden is going to cut the number of hours on its employees to less than 30 per week because, if they don’t, the company will be hit with massive fines for not providing the basic coverage for full-time workers AND their dependents.

Yeah, so in the world of utopia, Darden isn’t playing by the rules. And, expect this to be the trend, especially if Obama wins the election and receives another four years in the White House.

A common theme in 2012 is the amount of cash sitting on the balance sheets of S&P 500 companies. Trillions upon trillions are literally held in short-term instruments, such as commercial paper, for businesses coast to coast. And, the question always comes up: Why won’t these cash-rich companies start using it to hire people. Well…hello. Enter Darden stage right.

If you force companies to offer specific benefits and incentives, they won’t add to overhead. Or, in other words, companies will figure out a way to do more with less. Remember, the idea of any profit-seeking enterprise is to, ta da, make a profit. If profits are reduced, the entity has no other choice but to shed overhead. After all, what good is working at a company if it’s about to go out of business?

Fortunately, for the already economically-squeezed American worker, the new penalties for offering health benefits won’t kick-in until January 1, 2014. So, an Obama victory will most likely mean we’ll be discussing the “healthcare cliff” this time next year. But at least you have some time to find another part-time job to make up the difference in lost hours.