ONTD Political

The Corporate Blackmailing Of America Is Now All the Rage

11:40 am - 11/16/2012
For the past week, I have watched with amazement as one restaurant chain after another—the very people who peddle the high caloric foods laden with the fat and sugar that have contribute so mightily to the nation’s health problems and the resulting costs—announced their plans to cut back on employee work hours.

Why?

Because an employee who works less than 30 hours a week is not an employee at all for purposes of the Affordable Care Act. Thus, by cutting back work hours for dishwashers, servers, bussers, etc., these franchised chain restaurant operations can skirt the requirements of Obamacare by providing employees with less work.

Leading the way is Papa John’s pizza pusher-in-chief, John Schnatter, who has gone public in a big way decrying the damage Obamacare would do to his business.

So serious is the problem—Mr. Schnatter would have us believe—that he is being forced to cut back working hours for his workers to avoid the crushing costs of providing his beloved employees and their families with a healthcare plan or, alternatively, raise the price of his pizzas by $.14 a pie.

This is a national crisis. I mean, when it comes to buying a pizza, that $.14 is surely a deal breaker!

But let’s keep in mind the choice Schnatter is really offering us.

By avoiding the health care reform law through paying less to his employees as a result of cutting back their hours, Schnatter is only increasing the costs that you and I pick up when his employees—having no health insurance—show up at the emergency room for basic care because they have nowhere else to go. Thus, while Mr. Schnatter is deeply distressed by the notion of taking some responsibility for the health of the very employees who make his business work so that he can earn millions, he is perfectly happy to have you and I subsidize his profits by allowing us to pick up the cost of health care for his workers because he will not.

The result of Schnatter’s behavior—along with the other restaurant owners playing this game—is to leave it to me to subsidize Schnatter’s profits despite the fact that I am not a customer for his pizzas that find to be mediocre at best. I will be left to pay the bills for his employees’ health care needs and, as a result, contribute directly to his bottom line.

Not a bad deal for Mr. Schnatter. He gets to profit from someone like me despite my choice to not spend a dime in one of his restaurants. Nice work if you can get it but hardly what we would typically view as an example of free enterprise.

While this “three nickels a pie” charge would, apparently, be the final straw in driving you into the waiting arms of your neighborhood, non-franchised pizzeria (a pretty good idea if you ask me) it turns out that things might not be so dire for poor Mr. Schnatter after all.

In a brilliant article by Forbes’ own Caleb Melby —by the way, I have never been prouder of one of my Forbes colleagues—Caleb breaks down the real costs to Papa John’s, using hard, cold math to reveal a little truth. We learn, for starters, that the actual cost of the Affordable Care Act to Mr. Schnatter’s business runs much closer to 4 cents a pizza than it does to 14 cents. Could Mr. Schnatter be setting himself up to make a few extra pennies per pie using Obamacare as an excuse or is he simply exaggerating his plight to sell his political narrative?

Certainly, this is not the first time a new cost item has resulted in a small increase in the price of Mr. Schnatter’s product. However, I strongly suspect that it is the first time he has chosen to politicize a cost increase to make an ideological point. As a result, Caleb’s article serves to expose Schnatter for what he really is—an ideologue who would gladly put a metaphoric gun to the head of his employees, using them as pawns in the effort to sell his own political beliefs which, in the opinion of this writer, have no more substance nor taste than the pizzas he peddles. And if he can make a few extra bucks in the process? It’s all good then, right Mr. Schnatter?

And there is more.

According to Schnatter, the cost to his company of providing his employees with a healthcare benefit will run about $5 to $8 million each year—a cost that pales in comparison to what he’s spending on Papa John’s promotion whereby the company is giving away 2 million pizzas because quarterback Peyton Manning asked them to in a TV commercial. The price of that adventure is estimated to be about $24 to $32 million in revenues—four times the cost of providing his employees with the healthcare coverage they need.

I understand that Papa John’s has calculated that the give-away promotion will lead to increased sales and, accordingly, is an investment that is warranted for the long- term improvement of their profits. However, one cannot help but wonder if there would not have been some benefit in maybe giving away one million pizzas, leaving more than enough to treat Papa John employees like human beings without compromising profits.

Of course, it is not all about John Schnatter and his desire to boost his pizza sales among politically like-minded pizza eaters while saving a few bucks at the expense of his employees. We now have a new political star in the world of fast food franchise operators who seeks to “one-up” Schnatter in the effort to mix politics with the purveyance of high calorie food products.

Meet John Metz, the franchisor of 48 locations in the Hurricane Grill & Wings chain and owner/operator of RREMC Restaurants, a company that operates 40 Denny’s restaurants along with a number of Dairy Queen locations.

For Mr. Metz, simply cutting back on his employees’ work hours is just not good enough. Despite the fact that cutting employee work opportunities frees him from his obligation to provide health care benefits under the law, Mr. Metz has decided that, in addition to cutting work hours, he will be charging his customers a 5 percent surcharge beginning in 2014—a charge Metz claims is necessary to pay for the costs he will incur as a result of Obamacare.

How does that make sense? If Metz avoids the obligation to provide health care by cutting the hours of his employees, why is the 5 percent surcharge necessary? I get the pitch for one or the other—faulty as the argument may be —but how does one justify both?

No doubt, Mr. Metz has figured out that the extra 5 percent charge —one that will fall directly to his company’s bottom line—will be subtracted by the customer when calculating the tip to be given to the server. He knows full well that the standard 15 percent tip will, in Mr. Metz’s restaurants, soon become 10 percent.

Never mind that tips are the lifeblood of restaurant workers whose hourly rate of pay is often below the minimum wage. These are, after all, the people who voted for Obama, right? If they had only taken the directions provided by their employers and voted for Mitt Romney, could this not all have been avoided? Clearly, these people who earn too little to afford health insurance for their families but too much to qualify for Medicaid deserve to be punished for wanting basic healthcare for their families and casting their vote accordingly.

And remember, you and I will be left paying the bill for treating these people in ERs throughout America as Mr. Metz enjoys his 5 percent windfall.

The efforts to blackmail the people of the United States into doing the bidding of these businesses does not end with the cheap food emporiums and their mission of pushing fat calories to anyone foolish enough to eat this stuff.

We can now welcome the energy industry to the party.

Disturbed that the government may look to the oil and gas producers to pony up a bit more in taxes after generations of using taxpayer money granted them as subsidies—despite their billions upon billions in annual profits—these businesses are now threatening to take their jobs elsewhere should we dare to ask them to forgo some of that subsidy cash.

According to Kharey Cauthern of the American Petroleum Industry, “With new taxes, U.S. oil and gas investments are less attractive and foreign projects more attractive. That’s an invitation to push American investment and jobs overseas.”

To drive home their blackmail efforts, the industry has launched a television and print campaign telling us what is going to happen to our jobs if we remove their subsidies.

You know what? Enough already.

How does any American avoid the reality that these are the very people who claim to despise welfare unless that welfare is corporate welfare?

Restaurant owners who whine about paying the cost of their employees’ health care are leaving it to you and I to do the job for them with every monthly health insurance premium we pay, thereby subsidizing their bottom lines whether we buy their products or not. How is that not corporate welfare? Oil companies who threaten to take their jobs and go elsewhere if we dare to cut back on their research and development subsidies, all the while pointing the finger at single mothers who get government help.

I’m sorry, but this is nuts.

It is no secret that American patriotism was, for many people, long ago replaced by something these folks consider far more important—personal and shareholder profit.

I like profits. But I also like living in a country where our commitment to the betterment of our nation and the lives of our people takes precedence over the desire to give away a few million pizza pies.

If these companies are permitted to get away with this effort to hold hostage their employees—and the American public at large—in order to get their way because they lost an election…or if they can successfully threaten to pick up their ball and take it to a different field because we might just ask them to forgo some R&D subsidy money for the national betterment…America has a problem far more dramatic than paying an extra fifteen cents for a slab of carbohydrate drenched in sugar filled tomato sauce and then covered with artery clogging meat.

I can only hope that Americans will have the good sense to show these businesses what we think of their tactics and their notion of patriotism by choosing to support businesses who believe in a more basic yet evolved sense of values.

It doesn’t require massive efforts or campaigns involving staging boycotts or creating other types of mischief. It is far simpler than that.

The next time you are taking the family out for dinner, do a quick Google check to see if your destination is a place where they are punishing their workers to make a political points as they ask you to subsidize their profits by requiring you to pay higher health insurance premiums due to the costs of emergency rooms treating their employees because they have no coverage. If you find that your planned destination is such a business, maybe you can think of another, similarly priced restaurant that your family might enjoy.

These business have made their choice and their choice is to politicize their businesses.

Fine. Now, let’s make our choices.

Let’s see how Papa John’s profits hold up when the millions of Americans who re-elected Barack Obama makes a few choices of their own and support pizza restaurants who treat the employees that make the businesses work the way the law wants them to be treated.

Source: Forbes

Do we not have an Obamacare/Affordable Care Act tag? Seems necessary at this point.
crossfire 16th-Nov-2012 06:38 pm (UTC)
Thus, while Mr. Schnatter is deeply distressed by the notion of taking some responsibility for the health of the very employees who make his business work so that he can earn millions, he is perfectly happy to have you and I subsidize his profits by allowing us to pick up the cost of health care for his workers because he will not.

*drops mic*
hinoema 17th-Nov-2012 09:13 am (UTC)
YES THIS NEEDS TO BE ON BILLBOARDS NATIONWIDE. THE EMPLOYEES THEY DON'T COVER WON'T STOP NEEDING HEALTH CARE.

It will simply cost everyone more between employee poverty and lack of preventive care making catastrophic illnesses out of simple things.
mutive 16th-Nov-2012 06:51 pm (UTC)
I love this writer so much. Just...everything.
lil_insanity 16th-Nov-2012 07:13 pm (UTC)
This is a great article, really well worded.

I'd really like to see a list of companies that DO give their employees healthcare. I'd like to patronize those places instead of places run by assholes like Papa John's.
ajremix 16th-Nov-2012 07:27 pm (UTC)
If not that, at least a list of companies that pull bullshit like this so I can avoid the hell outta them.
bushy_brow 16th-Nov-2012 07:15 pm (UTC)
I'm pleasantly surprised to see this kind of article coming from Forbes. :-D
bib_specialist 16th-Nov-2012 07:21 pm (UTC)
Yeah, I'm wondering, just what is it with Forbes? They've had a lot of stuff lately like this that portray capitalism as less than wonderful. Have they been secretly taken over by Anonymous or something?
stephani673 16th-Nov-2012 07:30 pm (UTC)
Poor John Schnatter. How will he ever make ends meet?

http://online.wsj.com/article/SB10001424052748704281204575003261727298730.html#slide/1

http://virtualglobetrotting.com/map/john-schnatters-house/view/?service=1

Love this article. I think this was my favorite line -- "As a result, Caleb’s article serves to expose Schnatter for what he really is—an ideologue who would gladly put a metaphoric gun to the head of his employees, using them as pawns in the effort to sell his own political beliefs which, in the opinion of this writer, have no more substance nor taste than the pizzas he peddles."
maisontv 16th-Nov-2012 07:58 pm (UTC)
ultraelectric 16th-Nov-2012 07:30 pm (UTC)
I was wondering if this is true, I had just woken up and turned on MSNBC when I thought I heard this, but they were talking about a day to go to Papa John's and buying food to support Schattner's position (sorta like those folks did with Chik-fil-a). Is that true?

I can't believe something like health insurance is seen as a negative thing to give to employees. Yet, we have all these CEO's with more than enough money to provide for their employees.
emofordino 17th-Nov-2012 02:20 am (UTC)
i think i read somewhere that there was a "papa john's appreciation day" being planned on facebook, but i haven't actually seen it for myself, so don't quote me on that.

ita with you when it comes to fat cat CEOs, though. i saw pictures of schattner's estate and it was RIDICULOUS; acres and acres of property, with a huge mansion, swimming pools, etc etc etc. it's not like he's hurting financially, he likely wouldn't even notice the money that would be lost to cover his employees health-care. sounds like he has the mittens mindset about business, "why spend your own money when you can let someone else pick up the tab?" and in this case, it's all of us in america who have health insurance whose premiums end up going to pay for the healthcare of the employees that he's to greedy to cover, regardless of whether we buy his stupid shitty pizzas or not. it grosses me out so badly.
notgarystu 16th-Nov-2012 08:32 pm (UTC)
Places in MA have been doing this for a while to avoid having to provide health insurance for employees. The Dunkin Donuts franchisee I worked for was very, very insistent on keeping employee hours at 30 and under. I'm not terribly surprised to see it happening nationwide now with the ACA, but goddamn does it make me angry.
evilgmbethy 16th-Nov-2012 09:36 pm (UTC)
I believe it's Hawaii that requires employers provide health insurance to all employees who work at least 20 hours a week. It's a great model, imo.
romp 16th-Nov-2012 08:35 pm (UTC)
great article, I'll send it to friends who still have conservatives in their lives who might fall for this
masakochan 16th-Nov-2012 08:43 pm (UTC)
I'd love to send the article to my parents, but I know the automatic response would just be along the lines of "Ohhhh you. You're just buying into what the 'liberal media' is telling you. *bullshit-rambles on about Obama is just making people being unable to care about their employees because there no way that so many people could be complete assholes*"
nitasee 16th-Nov-2012 08:43 pm (UTC)
This reminds me of something I read years ago about Walmart I don't remember where. Walmart was the pioneer of limiting worker hours to just under the line where the company had to actually provide benefits or even a living wage. (This may still be the case, I don't know to be honest.) This meant that a large number of Walmart employees had needed foodstamps and other assistance. Of course, this assistance was paid for by taxes. In a round about way, this made Walmart the beneficiary of largest corporate subsidy...through our taxes paying to assist their workers.
sassalicious 17th-Nov-2012 03:44 am (UTC)
They talk about that in the movie "Wal Mart: The High Cost of Low Prices"
mskye 16th-Nov-2012 09:06 pm (UTC)
The efforts to blackmail the people of the United States into doing the bidding of these businesses does not end with the cheap food emporiums and their mission of pushing fat calories to anyone foolish enough to eat this stuff.

Or poor enough. Just sayin'. It was a good article, but I could have done without the condescension.
sesmo 16th-Nov-2012 11:59 pm (UTC)
Papa John's is not particularly cheap calories, if I recall correctly. If you want cheap pizza there are plenty of other options, though I don't know how those options fare in the ethics department.

P.S. Costco pizza! They pay their employees well, provide health benefits, and are generally excellent. Also, good pizza.
evilgmbethy 16th-Nov-2012 09:36 pm (UTC)
No doubt, Mr. Metz has figured out that the extra 5 percent charge —one that will fall directly to his company’s bottom line—will be subtracted by the customer when calculating the tip to be given to the server. He knows full well that the standard 15 percent tip will, in Mr. Metz’s restaurants, soon become 10 percent.

Where are this asshole's restaurants? Because unless he's in a state that requires him to pay servers minimum wage, this cheap piece of shit is probably paying his servers two bucks an hour.

Fuck these motherfuckers.
stephani673 16th-Nov-2012 10:02 pm (UTC)
Seriously. When I waited tables, it was $2.08 an hour plus tips. My boss told me I was getting a raise to $2.13/hr. and I started laughing. He was taken aback and then started laughing too.

Mind you, I worked in one of those steakhouse/buffet restaurants where people think there's no need to tip.
little_rachael 16th-Nov-2012 10:56 pm (UTC)
I'm sure there are people saying, "See, we were right! Obamacare is bad because it leads to stuff like this happening! See? See?"

But no. I mean, you could make that argument, yes, but this kind of thing happens every time corporations are told to buckle down and increase benefits for their employees. I'm sure that increasing the minimum wage and banning child labor had these same "consequences" which were really just CEOs of corporations throwing a big hissy fit about taking care of their workers.

Increased benefits shouldn't be blamed for assholes being assholes.
emofordino 17th-Nov-2012 02:30 am (UTC)
it drives me so mad how people throw tantrums like this. it's just like all the insurance companies raising their premiums after obamacare passed and forced them to spend 80% of the money from premiums on actual health care, instead of lining their pockets. and then everyone who already had insurance could be angry and say "see? my insurance is so expensive now, and it's all obama's fault!" when in reality it was just the insurance companies throwing a fit. sighhhh.
ceilidh 16th-Nov-2012 11:30 pm (UTC)
he lives in a fucking castle and he wants to begrudge his workers some crappy insurance. fuck him sideways.
365reasonswhy 17th-Nov-2012 12:04 am (UTC)
I'm expecting Papa Johns' sales to increase though, like with Chick-Fil-A. I have no faith in people that this will result in any kind of lasting backlash for the company even if Forbes itself is saying Schnatter is full of shit.
glamoursnipe 17th-Nov-2012 01:50 am (UTC)
:sigh: Goddamn it. I can understand why small, independent, up-and-coming business owners might be a little apprehensive about Obamacare (and deserve to have their fears put to rest), but so far, the ones bitching the loudest are heads of behemoth corporate chains who make more money farting in bed than my entire subdivision sees in a month. It's the American Psycho business model, all "gimme" all the time; next they'll be dismembering prostitutes.
bushy_brow 17th-Nov-2012 03:05 am (UTC)
next they'll be dismembering prostitutes.

If they thought it'd raise their stock prices ... :-(
rubygloomrox 17th-Nov-2012 03:27 am (UTC)
I love this article. I know I had a list at one time of the places I felt I wanted to give my business to, vs. the ones I didn't. I will have to do an update and post it.
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