Federal calorie-count rules would slice into restaurant jobs
The unemployment rate in my home state of Michigan has remained above 8 percent since July 2008. The outlook for our state is improving, but we continue to face stiff headwinds originating from Washington. As our state struggles to regain its economic footing, our nation's capital is guilty of neglecting its duty. For the past 4 years, Washington has struggled to enact policies that would restore growth — lowering taxes, reducing energy costs and improving worker training — but instead enacted bureaucratic rules that ensnare the productive private sector.
Washington's peculiar ideological priorities can be seen in the regulations that the Food and Drug Administration is currently drafting for menu labeling — the federal requirement that restaurants provide their customers with calorie counts for the items they sell. While the objective of increased information for consumers may seem reasonable, the actual regulations are poorly designed, promise to be both costly and ineffective, and will kill jobs.
The FDA, which bears responsibility for converting the legislation into regulation, has put forward a plan that is rigid, simplistic and expansive. The agency's proposed one-size-fits-all rules do not adequately account for the diversity of restaurant types or the variety of food products. This rigidity is especially problematic for restaurants that do not fit the dine-in model. For example, pizza restaurants — including Michigan-based companies such as Domino's Pizza, Hungry Howie's, Little Caesar's and Papa Romano's — will be significantly impacted by these rules. After all, pizza can be made literally millions of different ways, and given the impossibility of producing a menu board with every single option, the FDA's rules would force restaurants to provide a dizzying and intimidating calorie-range display that will tell you very little about your actual order. To make matters worse, the agency also would force these companies to label by the whole pie, resulting in ranges up to 2,000 calories when the vast majority of consumers eat only a few slices.
Similarly, even pizza-delivery restaurants that receive 90 percent of orders remotely by phone or online would be forced to maintain expensive, in-store menu boards. The menu boards are estimated to cost up to $5,000 per store per year and would certainly make it harder for Michigan restaurants to hire new workers and create jobs, even though the FDA acknowledged it is "unaware of any comprehensive data allowing accurate predictions of the effect of the proposed requirements on consumer choice and establishment menus."
The FDA has also significantly overstepped its authority by suggesting that the mandate would apply to grocery and convenience stores. This interpretation is inconsistent with congressional intent and would make the federal mandate even more intrusive than menu-labeling standards adopted in New York City and Seattle.
The cost for these stores to comply is high. The first-year outlay for the nation's grocery stores alone is estimated at $1 billion — and this when 95 percent of products on grocery and convenience store shelves are already labeled. A potential consequence of the regulators trying to get that remaining 5 percent labeled will be, as with restaurants, the opposite of what was intended: the elimination of fresh, seasonal items for which compliance is more difficult and expensive. The Obama administration's own Office of Management and Budget noted that menu labeling would be burdensome and require 14.5 million compliance hours.
The good news is that there is an alternative to address this issue. Republicans and Democrats in the House of Representatives have introduced the Common Sense Nutrition Disclosure Act, which includes a number of provisions to rein in and correct the FDA's flawed approach. The bill would limit the mandate to restaurants and grant covered entities the flexibility to comply in a way that reflects consumer demands and behavior. Together, these reforms could save billions of dollars and millions of hours, while actually improving how consumers access and process information.
For too long, we have seen a bureaucratic agenda out of Washington that has made costly, ineffective decisions on behalf of the American people. Instead, it is time for practical solutions that truly help grow a healthy economy and create the jobs that are needed. Addressing regulations such as this is a good place to start.
Rep. Tim Walberg is a Republican member of the U.S. House of Representatives from Michigan.