Pizza costs to rise due to Affordable Care Act

Papa John’s CEO John Schnatter says that Obamacare will result in a $0.11 to $0.14 price increase per pizza, or $0.15 to $0.20 cents per order, Pizza Marketplace, a trade publication, reports.

Under Obamacare, the company, which is the third-largest pizza takeout and delivery chain in the United States, will have to offer health care coverage to more of its 16,500 total employees or pay a penalty to the government.

Interesting question: is it better to have a lot of low-wage jobs that barely pay a livable wage and offer no benefits, or fewer low-wage jobs that barely pay a livable wage, but at least offer health care benefits? 

I’m not 100% convinced one way or another, but I’m leaning towards “fewer jobs, but at least they offer something substantive”. I suspect in the short-term the people that may be laid off would rather take the “low wage, no benefits, just give me something” approach. On the flip side, it remains to be seen if the ACA really puts a dent in the economy for the long-term. Still, I think getting rid of the cruft opens up more room for better stuff later. It’s the transition and short-term work that sucks.

About the only people that can afford to be minimum wage fast food employees are teenagers still living at home with their parents, or at least, people who only use the job as second income, not primary. Plenty of people probably do rely on these jobs as their only source of income, but I’m inclined to think those people are better than that.

Others still may get angry at the fact they have to pay more for a pizza, but I’d lump fast food in with cigarettes and alcohol and say that anything that may deter people from ordering a pizza may not be a bad thing overall. Plus, if .20 cents ruins your evening plans, you’ve probably got bigger problems at hand.

Then again, this is probably indicative of a lot of industries, particularly in the low-wage sector like fast food joints and restaurants. I suspect some places (i.e., McDonald’s) may further reduce the quality or portions of their food to keep profits where they are, and some places (Applebee’s, Olive Garden, etc.) may just raise prices and pass that cost on to the consumer. A massive cost shift in increased goods and services ultimately hurts average individuals with less money in their pocket, but at the same time, if you’re no longer worried about massive million-dollar medical expenses, maybe it’s worth it.

I still see this as a net-win all around for everyone. I think we’re repeating the debate about Social Security, Medicare, Medicaid, national public schools, etc. all over again. It’s hard to imagine a society without free public education on demand, or for senior citizens to imagine life without Medicare (have you ever heard an older person complain about Medicare?). Say what you will about public education, can you imagine America if we never had it?

My predictions for the ACA are simple:

  • We’re going to see a huge shift in people quitting jobs they stayed at “for the insurance”, to happier, more entrepreneurial jobs
  • Costs for cheap goods are going to go up, thus pushing some people to spend money a little smarter
  • In 30 years we’ll look back on this as a good thing for society that improved our overall health and ultimately saved people (actual individuals, not large non-human conglomerates) a lot of money.

Now if we can just take care of education costs, which has far outpaced the cost of healthcare in this country by nearly 2:1.

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