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View Diary: Denny's CEO not happy about franchisee's Obamacare surcharge threats (214 comments)

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  •  The thing is, that's not how it's calculated... (2+ / 0-)
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    Catte Nappe, kurt

    Most companies - certainly the one I work at (which, BTW, is run by a Republican a-hole) - use a simple formula of sales to labor costs. Since the cost of ObamaCare will be a labor cost, any cost added by that will be calculated into that sales:labor ratio. If the labor costs exceed the percentage of sales the business owner has set, he will take one of two options - seek to cut his labor costs (usually by cutting work hours) or increase sales. Raising prices can hurt sales, so the more realistic option will be to cut hours. The problem is, most of these big companies set an absurdly low labor to sales percentage, which is why they rake in huge profits while their workers get shafted.

    I vote we run Rick Scott out of Florida on a high-speed rail.

    by ObamOcala on Tue Nov 20, 2012 at 12:28:22 PM PST

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    •  As A Business Owner Myself (1+ / 0-)
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      kurt

      (though admittedly not the Republican A-hole kind) it's unclear to me how any business that expected to be a going concern would not factor their costs into the prices they set.  I will take your word for it though when you say some of them do not.

      Too Folk For You. - Schmidting in the Punch Bowl - verb - Committing an unexpected and underhanded political act intended to "spoil the party."

      by TooFolkGR on Tue Nov 20, 2012 at 02:23:13 PM PST

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      •  I really don't understand why businesses would (1+ / 0-)
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        kurt

        Even want health insurance to be part of their business costs.  Wouldn't a system not tied to employment be more cost effective for everyone?  

        I end up thinking employers want a role in health care because it gives them greater control over employees.

        "Let's see what fresh fuckwittery these dolts can contrive to torment themselves with this time." -- Iain Banks, The Hydrogen Sonata

        by Rikon Snow on Tue Nov 20, 2012 at 03:52:35 PM PST

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      •  Your way is how all businesses USED to do it... (1+ / 0-)
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        kurt

        ...and how he reputable ones still do. But the name of the game in large chains is to maximize profits and minimize costs. And in highly competitive industries like casual dining chain restaurants, pricing is critical. Olive Garden suffered mightily when they tried to move upscale just before the recession hit. Now they're offering a lot more "value priced" menu items. If Papa Johns or Dennys raise their prices to far above that of their competitors, they'll get their clocks cleaned, especially in a tight economy. That makes it harder to respond to rising costs they can't control. So the answer is to cut costs they CAN control - which usually means labor. It's crappy, but until a living wage is mandated, it will continue to be the norm.

        I vote we run Rick Scott out of Florida on a high-speed rail.

        by ObamOcala on Tue Nov 20, 2012 at 05:04:15 PM PST

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        •  The thing is (1+ / 0-)
          Recommended by:
          kurt

          in theory, the competing businesses will all be facing the changes from Obamacare, so it should be an even playing field.  If Papa John's is going to have to raise the cost of pizza 10-14 cents per pizza, in theory Dominoes and other chains will likely have to do similar.

          So I guess I don't see the problem.

          •  Not true. What if the actual cost was only 5 (0+ / 0-)

            cents a pizza but you decided to take advantage of it and claim you needed to raise the cost by 50 cents a pizza to make up for Obamacare?  In other words, lie about the cost of Obamacare so you can make a greater profit.

            You have watched Faux News, now lose 2d10 SAN.

            by Throw The Bums Out on Tue Nov 20, 2012 at 08:54:14 PM PST

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