Papa John's Pizza To Raise Prices Because Of Obamacare

[CajunRaven]

I seem to remember being told that business owners would never do anything that could damage their bottom line. Do Denny's and service-oriented businesses that hire low-wage staff think that these actions will result in positive publicity, that throngs of anti-Obama people will rush to their stores? Anyone semi conscious knows that the ACA isn't going away anytime soon, so the corporate folk can't believe that their actions will help change the law.

Maybe there's an opportunity for a PR coup by a business that advertises something like: "We understand that requiring that we contribute to our employee's health insurance will increase our costs, but the health of our employees and their quality of life is important to us at (insert name of company here). So, while we may have to raise our prices, we'll try to keep them down and make adjustments in other areas. All we ask is that you bear with us, and try see that in the long run we'll be a stronger community and a stronger country if we can make this work."

And then the scene will cut to a landscape where pink elephants and bright green pigs fly over one of their businesses.

I assume this will be the gang overseeing ACA?

[DaggerJohn]

http://www.nytimes.com/1994/05/25/us...ted=all&src=pm

Denny is used to being dragged into new centuries.

Your write-up there really tells me nothing of fact or substance. It sounds a lot like the ghetto lottery.

[CajunRaven]

If he's avoiding insurance coverage by making everyone part-time, why is he also imposing a 5% surcharge?

As others have noted, all businesses raise prices to account for increased costs. But they don't call the price increase a "surcharge".

It seems he's being snotty using surcharge.

It's easy enough to say, our taxes are going up and we are passing them on to you so we can stay in business.

[bullmikey]

A lot of places here in Philly are paying people under the table. Off the books, no healtcare problem. But they started doing this way before Obama care. People don't seem to mind. They may only be getting $7-8 per hour but they get to keep all $7-8 instead of having to give parts of it to the city, state, and feds. I warn them they're not building up any SS that way but, since these are mostly young people, they don't think there's going to be an SS left for them anyway. Not sure how these places get away with it but I know more people between the ages of 18 and 25 working off the books than on.

It's a starnge world, the way we BS ourselves constantly and then pretend everything is just peaches and cream. When the ax falls it's gonna be a long, dark way down to the bottom. Won't be many of us coming out of that hole any time soon. I'm afraid.

[gonzoliberal]

Yeah, there are two issues here.

One is the facts of Obamacare and the price adjustments required.

Second is the manner in which Denny's choses to express this adjustment.

As I mentioned earlier, Denny's is acting like spoiled brats.

[CajunRaven]

Two very good observations.

I do not understand how so many people can think the money to pay for Obamacare is just magically going to appear from nowhere. Somehow or other we are all going to have to pay for it. And it will be very costly.

The idiots in Congress who designed it are absolutely clueless about both simple math and basic economics. They are not as smart as they think and should not be shocked by the unforeseen consequences.

I am a partial owner of a small business with 80 employees. Of course any business will want to switch to part-time employees wherever possible! Just consider a simple example. Assume a business is paying an employee $24,000 per year. This works out to about $12.00 per hour. Then, assume it becomes mandatory to pay medical insurance costing $6,000 simply because he works 40 hours instead of 30. That last 10 hours per week works out to about 500 hours per year. If the insurance costs $6,000 per year it works out to $12 per hour in incremental cost per hour ($6000 / 500 hrs.) over and above his $12 base pay. So, the hourly cost DOUBLES from $12 for the first 30 hours to $24 for the last 10 hours.

Perhaps it may be possible for the company to pass a portion of these costs onto clients. But, any business that sits back and lets its labor costs double on 25% the man-hours won’t be in business for long. His choice is either to let his business to go under (and everybody loses their job completely) or switching to part-time.

But showing a line item for the portion of costs that are being passed on to clients is a bizarre and I can’t imagine it catching on. But, still, it would be nice if the public could see what Obamacare is costing them rather than hiding it in rising consumer prices.

One note Edward, the idiots in Congress didn't design it, a gang of lobbyists did.

[Edward]

Uhh... all of 10 of DEnny's customers are paying. I won't be going to Denny's anytime soon, so I won't be one...

I really don't see the logic or compassion in trying to drive Denny's customers away. Why would you want their employees to lose their jobs completely due to the lack of business?

[Norman]

Two very good observations.

I do not understand how so many people can think the money to pay for Obamacare is just magically going to appear from nowhere. Somehow or other we are all going to have to pay for it. And it will be very costly.

The idiots in Congress who designed it are absolutely clueless about both simple math and basic economics. They are not as smart as they think and should not be shocked by the unforeseen consequences.

I am a partial owner of a small business with 80 employees. Of course any business will want to switch to part-time employees wherever possible! Just consider a simple example. Assume a business is paying an employee $24,000 per year. This works out to about $12.00 per hour. Then, assume it becomes mandatory to pay medical insurance costing $6,000 simply because he works 40 hours instead of 30. That last 10 hours per week works out to about 500 hours per year. If the insurance costs $6,000 per year it works out to $12 per hour in incremental cost per hour ($6000 / 500 hrs.) over and above his $12 base pay. So, the hourly cost DOUBLES from $12 for the first 30 hours to $24 for the last 10 hours.

Perhaps it may be possible for the company to pass a portion of these costs onto clients. But, any business that sits back and lets its labor costs double on 25% the man-hours won’t be in business for long. His choice is either to let his business to go under (and everybody loses their job completely) or switching to part-time.

But showing a line item for the portion of costs that are being passed on to clients is a bizarre and I can’t imagine it catching on. But, still, it would be nice if the public could see what Obamacare is costing them rather than hiding it in rising consumer prices.

Interesting stuff.

I confused though...he's adding a surcharge to cover healthcare costs that he's not going to have to pay since he's moving the employees to part-time, no?

[Marshan Man]

Where did I say I didn't want to pay 5% for healthy servers? I only asked how people couldn't see this coming. We're talking about Denny's here, we're not talking about Ruth's Chris or The Tavern on the Green, Denny's - home of the $2 stack of pancakes...so the pancakes are going to cost $2.10, big deal. It may be a big deal to the majority of Denny's customer base though. It may have changed since the last time I was in a Denny's (many years) but if I remember correctly it doesn't attract the richest segment of society.

It is extremely rare for me to eat out, to pricey for me when I can make the exact same thing at home for a fraction of the price. So really, anything Papa John's (nasty pizza if you ask me) and Denny's do will have no bearing on me.

Denny's sort of attracts everybody. They put them in places where a cross section of Americans may get hungry... e. g. near interstate exists. So I wouldn't exactly call their customers derelicts either...and again if you're really gonna feel $0.10 like that?? You might want to go to a soup kitchen instead of Denny's.

I guess Denny's customers shouldn't be expected to tip either. Right?

[Smokey 1]

Interesting stuff.

I confused though...he's adding a surcharge to cover healthcare costs that he's not going to have to pay since he's moving the employees to part-time, no?

Check out the quote in post #12. Not all of his employees are part time.

[can you hear me now!]

interesting math...try something a whole lot simples...6000/2000 equals 3....so the business owner has to decide what portion of 3 dollars an hour he will eat, how much the employee can pay (because remember the option to have employees pay a share of this is still and option).....

the actual answer is your per hour labor costs go up 3 dolalrs an hour...you calculations, while technically correct are not the way to look at the cost of labor....as someone poited out earlier, many corporations are going to take punitive measures against their employees because they are the most powerless in the entire ACA equation...

[Brohan]

No one got a permanent waiver of anything, only delays in the implementation of specific parts of the law.

Yup, Obama is a sell out.

[Edward]

One note Edward, the idiots in Congress didn't design it, a gang of lobbyists did.

Congress deserves a lot of the blame but, yes, others had their hands in it including but not limited to:

• Federal bureaucrats with no real-world understanding of the medical profession, business or insurance.
• Insurance companies looking for new business by making it mandatory that the public to buy more of their product.
• Lefties looking to take another step towards socialized medicine
• AARP wanting to boost their primary source of income: commissions from selling medical insurance.

So we ended up with a big hodgepodge that harms most of us including individuals, small businesses, doctors in small practices, and even many large companies.

[BlandFood]

One reaps what they sow, may the Bobo masses go get a greasy Mac, does a body good.

[downhome]

So, prior to the election corporations were all about giving back to society with most of their profits going to their employees/customers? But after the election, angry about the results of said election, they are now all about the bottom line just to be spiteful? These corporations haven't changed, they are the same now as they were before the election, they were about the bottom line then and they are about the bottom line now. A corporation is a corporation for profit, they aren't a charity. The sole purpose of their existence is to turn a profit. If anything threatens said profits a wise businessperson would make adjustments. If those adjustments are better made by reducing workforce, so be it. If those adjustments are raising prices, so be it. This is what is happening. You guys act shocked and outraged. Did you seriously not see this coming?

It seems to me that the small locally owned restaurants which at one time were forced out of business by the chain restaurants will now have an opportunity to make a comeback. This is not a bad thing, imo, but I wonder what will happen to the employees who will be required to purchase health insurance? I have yet to see any plan that's reasonable in cost for someone making < $40,000. (Who knows what will become available later). I guess they could pay the penalty.

[Phineas Finn]

I assume this will be the gang overseeing ACA?

Some of them; they'll be the ones in the lab coats.

[BlandFood]

You'll recall Denny's had to be dragged into the 20th century (used to be Sambos) as well when it refused to serve black customers.

Can you prove that, Denny's was founded in 1953..... Sambo's 1957. Making it up as ye go are ya?

[CajunRaven]

Congress deserves a lot of the blame but, yes, others had their hands in it including but not limited to:

• Federal bureaucrats with no real-world understanding of the medical profession, business or insurance.
• Insurance companies looking for new business by making it mandatory that the public to buy more of their product.
• Lefties looking to take another step towards socialized medicine
• AARP wanting to boost their primary source of income: commissions from selling medical insurance.

So we ended up with a big hodgepodge that harms most of us including individuals, small businesses, doctors in small practices, and even many large companies.

I wasn't absolving congress by any means. But it's hard to blame folks for writing something they never read.

[Candy Pickletoes]

Denny's sort of attracts everybody. They put them in places where a cross section of Americans may get hungry... e. g. near interstate exists. So I wouldn't exactly call their customers derelicts either...and again if you're really gonna feel $0.10 like that?? You might want to go to a soup kitchen instead of Denny's.

I guess Denny's customers shouldn't be expected to tip either. Right?

Of course all Denny's customers should be expected to tip. I can't say I understand what that has to do with the price of tea in China though.

I didn't call anyone a derelict and if that is what you gathered by my comments I owe everyone an apology as I in no way would refer to people down on their luck as derelicts.

You're right about the $.10 though, if $.10 is going to make a difference in your budget, eating out isn't for you.

I still never said anything negative about the move Denny's is making, I said I didn't know how people didn't see this coming.

[Edward]

...the actual answer is your per hour labor costs go up 3 dolalrs an hour...you calculations, while technically correct are not the way to look at the cost of labor....

You are absolutely WRONG. Businesses make their decisions on the margin. If you cut an employee’s hours by 10 per week (to get down to 30), you save $24 per hour for each of those 10 hours ($12 in hourly pay plus the weekly portion of the $6,000 in insurance that those 10 hours mandated). The business would then hire more part-timers to cover those 10 hours of work at $12 per hour for a net saving $12 per hour.