Companies that suck: volume 1.

Companies that suck: volume 1. November 16, 2012

Some business owners are positively livid that they now, by federal law, must provide healthcare to the employees that make them rich.  I’ll try to update this blog with a list as I learn about them.

Denny’s.  This one sucks.  I actually kind of like Denny’s.

The owner of more than 40 Denny’s restaurants throughout the southern region said Thursday that he will levy a 5 percent surcharge and cut employees’ hours in order to offset costs imposed by the Affordable Care Act, widely known as ‘Obamacare.’

John Metz of West Palm Beach, Fla. told Fox News that most of his roughly 1,200 employees will see their hours trimmed to less than 30 per week in order to eschew laws that would otherwise require him to provide them with health insurance.

“People are trying to find ways to avoid the penalties and to avoid having to pay for Obamacare,” Metz said. “Everyone’s looking for a way to not have to provide insurance for their employees.”

Papa John’s.  As long as Pizza Hut still has stuffed crust, no big.

Papa John’s Pizza seems to be gunning for Chick-fil-A’s “most heartless fast-food chain” title after CEO John Schnatter threatened to increase pizza prices by 11 to 14 cents per pie and cut back employee hours if the Affordable Care Act isn’t repealed. Schnatter has found support from more than 20,000 Facebook users (and counting), who have staged an “eat-in” to protest Obamacare and its effects on the food chain:

Papa Johns has been targeted by the left for a boycott, for simply articulating that ObamaCare would hurt profits and force cutbacks in employee hours. Stand up to this nonsensical and illogical action and support Papa Johns this Friday!

Forbes’ Caleb Melby points out, however, that Schnatter’s underlying logic doesn’t make sense when you look at the numbers:

Last year, Papa John’s International captured $1.218 billion in revenue. Total operating expenses were $1.131 billion. So if Schnatter’s math is accurate (Obamacare will cost his company $5-8 million more annually), then new regulation translates into a .4% to .7% (yes, fractions of a percent) expense increase. It’s difficult to set that ratio against the proposed pie increase, given size and topping differentials, but many of their large specialty pizzas run for $16. Remarkably, a 10-14 cent increase on a $16 pizza falls in a comparable range: .6% to.9%. But the cost transference becomes less equitable if you’re looking at medium pizzas, which run closer to $12, meaning a .8% to 1.15% price increase.

In other words, Melby’s analysis shows that Obamacare would increase Papa John’s expenses by only a fraction of a percent, and his proposed increase would not only cover said expense — but it might even result in an increase in revenue. For example, if Papa John’s were to sell exactly 50 percent large pizzas and 50 percent medium pizzas, Melby explains, prices would only have to increase 3.4 to 4.6 cents a pie to cover Obamacare costs. Melby notes that although Schnatter may have other reasons to increase prices, ”attributing all price increases to Obamacare would be disingenuous.”

For the record, John Schnatter is worth about $600 million, lives in a $7 million mansion with a 22-car garage and private golf course, and pays his employees (who suffer from the notoriously low labor percentage of fast food restaurants…why pay two employees when you can overwork one?) an average of $7 per hour.  He’s also doing a $30 million free pizza promotion.  Yeah, this guy’s going to be “forced” to make up the difference somehow.  How dare someone like John Schnatter be asked to provide for the people that make him rich (and who will continue to make him rich)?  How can they expect him to raise the cost of pizza by almost a nickel…as if the health of the people working in his company is worth more than that?  How will that greedy, heartless fuck eat?

The response from conservatives would be that the free market would somehow punish people like John Schnatter and reward companies that are better to their employees.  But people will always need jobs, and sometimes working for shitty owners like Schnatter are just a reality.  I’ve worked for fast food companies (hell, that’s how I spent much of my life and college years): most of them would pay employees less than minimum wage if only they could.

Olive Garden and Red Lobster.  Classic date spots for me and Michaelyn.  So long, salad and breadsticks.

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 Barack Obama’s health care law.

Darden Restaurants Inc. declined to give details but said the test is only in four markets across the country.

The move entails boosting the number of workers on part-time status, meaning they work less than 30 hours a week.

Under the new health care law, companies with 50 or more workers could be hit with fines if they do not provide basic coverage for full-time workers and their dependents.

Know of any restaurants that rock?  Let’s promote those too.

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