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Why Trump’s Victory Gave Restaurant Stocks a Boost

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And how it could affect workers

Republican Presidential Nominee Donald Trump Holds Election Night Event In New York City Mark Wilson/Getty Images

News that Donald Trump would become the 45th President of the United States of America took the stock market on a temporary rollercoaster ride. One industry that saw a boost: restaurants.

Big chains have had a tough year, with many failing to reach their quarterly sales estimates. But on Wednesday, a number of restaurant stocks rose after a pretty grim year. As Nation’s Restaurant News reports, Cheesecake Factory’s stock price shot up by more than 5 percent, as did Olive Garden parent company Darden’s; Noodles & Co went up 6 percent, and take-and-bake pizza chain Papa Murphy’s went up by 14 percent, to name a few.

Cheesecake Factory’s stock rose sharply post-Election Day
Google Finance

Here’s how Trump’s proposed policies could affect food and dining in the U.S., and below how his policies could impact some of America’s biggest restaurant companies.

Why did news of Trump’s election give restaurant stocks a boost?

Because investors believe that President Trump will loosen regulations in a way that’s beneficial for restaurant chains. If Trump successfully rolls back the Affordable Care Act (Obamacare) as he’s pledged to do, many restaurant chains could no longer be made to provide health insurance to employees.

It’s also highly unlikely Trump would raise the federal minimum wage, which could help stem the tide of rising labor costs (at least in states that aren’t already enacting their own minimum wage hikes).

Why would looser regulations be a good thing for restaurants?

The same reason any big business wants deregulation: Less-stringent rules make it easier and cheaper for them to operate (and to expand), and less government interference means they can focus on inventing new flavors of Doritos Locos tacos, for instance, instead of worrying about how to pay their employees a living wage or cover the cost of their health insurance.

How will it affect restaurant employees?

Dismantling Obamacare, as Trump has vowed to do, could eliminate the employer mandate that requires restaurants with 50 or more full-time employees to provide health insurance to 95% of those employees — meaning many could lose their employer-provided insurance.

Increasing the federal minimum wage to $12 or possibly even $15 was a main goal of the Clinton campaign, but Trump would likely do no such thing — meaning workers in states that aren’t enacting their own minimum wage hikes could be left with stagnant wages. Labor movements like the Fight for $15 have been pushing hard for a federal minimum wage increase; Donald Trump presidency is a major blow to these activists.

How will this affect American diners?

Combined with food prices that have plummeted recently, lower wages for workers could possibly result in lower menu prices — but this remains to be seen.

What President Donald Trump Will Mean for U.S. Food Policy [E]
Restaurant Stocks Rise on Trump Election [NRN]
Food and Restaurant Industry Split About Trump Presidency [WSJ]

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