A place for Liam to post essays, comments, diatribes and rants on life in general.

Those fond of Liam's humor essays, they have been moved here.

Wednesday, November 14, 2012

Greed

I'm wondering how many greedy owners of companies are planning on cutting costs and increasing their bottom line by lowering worker hours to below 30 (thus making them ineligible for benefits), having layoffs, etc, and blaming it all on Obama and ObamaCare.

There are a number of reasons I suspect this.

First off, there is the fact that a number of places have already done this, or had layoffs, immediately following the election.  I know of several people who lost jobs after the election, and I think the timing is unlikely to be coincidental (although if I'm being honest, I have to allow for the possibility that the timing might be due to having held off to avoid affecting the election, rather than after due to the results of it, although I doubt that).

But really, anyone who has had layoffs now due to the election results is lying, because literally nothing has changed, nor will until January 20th.  After that date, you could make the argument that things "would be different" if a different person had been sworn in.  But until that date, there's not a thing that's different today than it would have been if last week's election had elected Gov. Romney.

Even making the argument that "under Romney, we'd be expecting ObamaCare to be rolled back, and now we know it won't be" doesn't really materially change things TODAY.

Second, in specific looking at Papa John's, the claim is that in order to meet the costs of ObamaCare, the price of a pizza would have to go up by about 15 cents.  Really?  You're not willing to pass that along to customers?  I've watched the prices at my local restaurants climbing steadily over the last few years due to increased food costs and various other factors, an increase of 15 cents on a pizza really isn't going to even show up on my radar...  But somehow that's untenable and requires cutting people's hours and their benefits?

Finally, again Papa John's.  According to an article I read recently, the math doesn't add up.  Papa John's CEO has claimed that ObamaCare would increase their corporate costs by about $5 million, which according to that web site would represent an average increase on the cost of a pizza of about 5-6 cents.  If true, this also represents a mindset of "maximizing the blame on an external force" in order to justify cost cutting measures designed less because of those external costs and more to maximize profits.

2 Comments:

Blogger Ross said...

One of the things about the Papa John's situation is that it is a heavily franchised brand. Most locations are franchisees, not directly owned by PJ. Does the franchise agreement say that healthcare costs are provided completely by the PJ organization? If not, then that further damages his math -- if the franchisee provides healthcare to the employees, not the parent org, then the parent org isn't affected to the same extent by a rise in healthcare costs.

This seems so obvious that I must be missing something...

Wednesday, November 14, 2012 1:48:00 PM

 
Blogger Liam said...

Hmmm. It might damage it, or it might strengthen it.

If the $5 mil figure what the cost to Papa John's for their employees and ignoring the franchisee's employees, and the $.15/pizza was only on pizzas sold through non-franchise locations (a significantly smaller number of pizzas) it might make sense.

I would think that in these cases, franchisees would be the employer for the people working in those franchise restaurants, and thus, would be responsible for paying wages and benefits. On the other hand, there's probably some standard expected, so it might be a part of the franchise agreement that "You will provide our standard benefits package". Or maybe not.

Who knows. I still think it's pretty greedy to cut people back to not having ANY benefits to save $.15 per pizza, but there's no talk of lowering the cost of pizza by the savings of existing costs that they'd reduce if they in fact did cut everyone back to 29 hours or less.

Wednesday, November 14, 2012 2:24:00 PM

 

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