Free Markets, Free People

Papa John’s


Pizza? This is about slow suffocation by government (update)

Rob Port brings attention to the Papa John’s story:

At Slate, Matthew Yglesias scoffs at Papa Johns’ founder John Schnatter saying the Affordable Care Act, Obamacare, will drive up costs for his company by roughly $0.20 per order, something his company will be passing along to customers.

“Stipulating for a moment that this is true, doesn’t it seem like a rather small price to pay?” asks Yglesias.

No, it’s not small at all.

Rob then covers just the Papa John’s part of this formulation:

Papa John’s operates 3,973 restaurants. I can’t figure out how many orders the company processes daily, but let’s assume a very conservative 100 orders per store. That’s 397,300 orders every day. Adding $0.20 to ever order in additional labor costs translates into just over $29 million in additional costs for Papa Johns customers annually.

But, of course, as you’ve already figured out, if that’s true for Papa John’s, it is probably true for most other companies in the US as well.

So as Rob says, “no, it’s not small at all”.  In fact, it is potentially a huge increase in the price people will pay for all goods and services.

Papa John’s isn’t alone in seeing a price increase in their futures. As the magazine relates, in its most recent earnings call, McDonald’s said the health care plan will cost their stores an extra $10,000 to $30,000. While the vast expansion of government power involved in the bill will result in more federal expenditures, the pizza magnate’s comment highlights the fact that it will create an across-the-board surtax on virtually all expenditures by families and individuals. This will mean an increase in the cost of living that will hit the poor a lot harder than the rich the president claims to want to tax.

In fact, as pointed out, it has the same effect as a tax on the poor.

Yet the left simply seems unable to wrap their heads around that.  Here’s a commenter to the article I took the paragraph above from:

It is shocking that the CEO of Papa John’s and this magazine commentator would begrudge the near-poor workers of that company health insurance — and better healthcare for a few cents per pie!! Our country is based on the premise that we all pay a little more to help those less fortunate — the key here is “a little more.” Does anyone really object to that??

Yes. Strenuously.  And by the way, this country was not founded on the premise “that we all pay a little more to help those less fortunate” and claiming that to be so is an attempt to rewrite history.  It was about providing everyone an equal opportunity under the law to succeed while protecting their basic rights to life, liberty and property.

So we have the probability that prices will increase in the future as companies charge more for their products to cover health care.  And that brings us to a pretty basic point, here made by Bethany Mandel at Commentary Magazine:

What this person and other liberals have wrong is this: It’s not about the price of pizza. If it were actually possible to improve healthcare for millions of Americans and insure millions more, conservatives would be on board. The basis of conservative opposition to ObamaCare is this: We do not think it will help the majority of Americans. The bill is titled the “Affordable Care Act,” but does nothing to make healthcare more affordable, nor will it improve health care. In reality, it provides a worse standard of care at a higher cost.

Under ObamaCare, 17 million Americans will be added to Medicaid’s rolls in order to move some Americans from the uninsured to the insured column. Are they actually better off?

I, of course, wouldn’t be “on board” if it had to do with government intervention, however I understand the point she’s trying to make.  What has been passed won’t a) reduce costs and make health care more affordable or b) improve health care. 

It is the “big lie” writ large.  The parameters defining health care delivery are finite, not infinite.  You have 24 hours in a day and x number of providers.  Is adding 17 million to the welfare portion of government health care (the one most providers refuse to take because of the supreme hassle and low reimbursement rate) really going to improve their lives?

As Avik Roy notes, even though we’ll be paying more across the board to make it possible, probably not:

In July 2010, at National Review Online’s Critical Condition blog, I wrote about a University of Virginia study, published in Annals of Surgery, finding that surgical patients on Medicaid endured a 97 percent higher likelihood of in-hospital death than patients with private insurance, and a 13 percent greater chance of death than those with no insurance at all. I noted several other clinical studies that showed similar results.

And that’s before the 17 million are added.  This is the mess we find ourselves in when agenda driven politicians pass laws they haven’t even read over and above the objections of the majority of the people.

It’s hard to call that a “representative democracy” isn’t it?

And, no, this still isn’t about pizza.

UPDATE: Morning Bell (Heritage Foundation) weighs in:

At least 60 percent of firms are estimating Obamacare will raise their health care costs, according to a new study released Wednesday by Mercer, a human resources consulting firm. One-third of those expect a cost increase of 5 percent or more.

The study states:

The employers that will be hit hardest are those with large part-time populations—employers in retail and hospitality services. Nearly half of these employers (46%) expect PPACA will push up cost by at least 3% in 2014—and another third don’t yet know what the impact will be.

An example of the impact from the CEO of CKE Restaurants:

The money to comply with the [Affordable Care Act] must come from somewhere. We use our revenue to pay our bills and expenses, to pay down our debt, and we reinvest what’s left in our business. That’s how we create jobs. There’s no corporate pot of gold we can go to, to cover increased health care costs. New unit construction will cease if we have to allocate moneys for that construction to the ACA. And building new restaurants is how we create jobs.

As we’ve said many times before, this isn’t rocket science and they’re called “economic laws” for a reason.  Unfortunately the left continues to ignore them (or pretend they don’t exist) with predictable results.

~McQ

Twitter: @McQandO