Obamacare costs lead to hour cuts

by Caitlin Johnson

For the most part, I try to stay out of politics. What’s supposed to be a fair and a balanced debate usually comes off as childish bickering with neither side seeming to make any progress toward improving the workings of society. Disappointment always follows an election on either side, and this year is no different.
The reelection of President Barack Obama means continued efforts from the government to support the Patient Protection and Affordable Care Act, known as Obamacare. This means businesses with more than 50 employees will be required to provide health care for those working more than 30 hours weekly. Some business owners openly expressed their disdain for this requirement, threatening to cut workers’ hours and even eliminate jobs to cover the expected costs.

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Papa John’s CEO John Schnatter is one of the more prominent names in the public eye for his opposition toward the legislation. Following the election, Schnatter emphasized a potential increase in the cost of each pizza along with employee cutbacks to offset the additional costs his company would be required to pay. Not surprisingly, the new policy sparked controversy and outrage from consumers, resulting in boycotts and falling stock prices.
In response to the criticism, Schnatter released a written statement through the Huffington Post’s business blog. Claiming to have been misunderstood, he wrote, “we will honor (the Affordable Care Act), as we do all laws, and continue to offer 100 percent of Papa John’s corporate employees and workers in company-owned stores health insurance as we have since the company was founded in 1984.”
Of the 3,883 Papa Johns restaurants, 628, about 16 percent, are company-owned. While Schnatter’s guarantee is great for those employed at company stores, it says nothing about the remaining franchises. According to ABC Action News, Schnatter noted the likelihood of franchise owners reducing employee hours to cover costs and said employees and consumers are still at risk of taking the financial hit.
As it stands now, coverage is costly no matter who foots the bill. I was fortunate to have a great plan with my previous employer, who opted to pay a majority of the cost. This is rare in any industry, especially in fast food. I enjoyed these full-time benefits for a few years until things began to change. Management began to hire many new part-time employees and naturally, the hours available began to dwindle as the number of workers increased. I had to fight to keep my full-time status (an average of 35 hours per week), but there was no such thing as seniority. This trend continued for a year or so until I finally left the company in July. There were other reasons why I resigned, but the struggle for hours was definitely a contributing factor in my decision.
I keep in contact with friends who still work for the company, who have told me the situation only worsened. There are more employees than management can handle and as a result, many are forced to take second or even third jobs to make up for the lack of hours they are given.
I can’t say for sure whether this loss of hours is a direct result of the Affordable Care Act. But looking at the situation from an employer’s standpoint, providing health care to employees is not an ethical question, but a financial one. It is an added cost and business owners will naturally find a way to offset costs by reducing expenses in other areas. The problem is these employers are using Obamacare as a scapegoat of sorts—an excuse to cut back on benefits and increase profits.
It is difficult to sympathize with companies such as Papa John’s, whose revenue easily surpasses billions of dollars annually. Their woes become even more diluted by recalling a marketing scheme back in September, when the company gave away two million free pizzas in an effort to bring more customers to the table.
As consumers, we hold the power to decide where to take our business. However, boycotting these corporations will not solve the problem. When revenue is lost as a result, it will only encourage more cuts in hours and jobs and ultimately hurt employees rather than help them. It’s a classic catch-22.
I’m by no means a political expert, but from a logical standpoint, it makes sense to offer employees options when it comes to health care. Instead of requiring businesses to provide plans, compensation for workers should be better regulated in order to enable them to afford their own. Forcing companies to adopt these added costs only encourages them to make such cuts and in the end, no one wins.