John Schnatter, founder and CEO of Papa John’s Pizza, announced recently that the price of his pizzas will increase if Obamacare is not repealed. Schnatter said: “We’re not supportive of Obamacare, like most businesses in our industry. If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders best interests.” Papa John’s will not be the only one.
What few Obamacare supporters (and big government advocates in general) seem to realize is that the projected 14 cent expense hike (resulting in 15-20 cent increase per order) on the cost of a pizza is but a drop in the bucket of increased costs resulting directly from Obamacare. Like every other cost incurred by a business, these are passed on to consumers. While conventional liberal “logic” makes claims about the “deep pockets of business,” businesses themselves cannot exist without customers. Papa John Schnatter understands this. If his cost of doing business rises, then the cost of his product must also rise. He can’t simply absorb the new cost as so many liberals think he must. The laws of economics demand that these new costs must be met and paid by new revenue. You can’t create something out of nothing (unless you happen to be God, which explains much about how liberals view government).
A Papa John’s franchise owner in Texas had this to say: “I have two options, I can stop offering [healthcare] coverage and pay the $2,000 fine, or I could keep my number of staff under 50 so the mandate doesn’t apply. Obamacare is making me think about cutting jobs instead.” And why would she rather stay small than risk going over the 50 employee cutoff? Simple, because she estimates that Obamacare would cost her between $20,000 to $30,000 extra in taxes. In other words, she would rather keep her employees low instead of having to pass her tax burden on to her customers. It’s all pretty easy to comprehend. Obamacare costs money and that money must come from somewhere. And that “somewhere” is where it has always been: the taxpayers and the consumers.
Just like the government, businesses do not have “inherent” money. A business must provide a valuable service to actual customers in order to survive. Businesses, unlike government, cannot simply force its customers to buy its products. Governments have the coercive power of the sword to force its taxpayers to comply, but businesses do not. Liberals always seem to have this backwards, as if American businesses are simply made of money and government is the one who must beg its citizens for money. Businesses are run in the same way as households are run: higher costs require either fewer expenses or more revenue. Running a deficit in a business is no way to grow it, but running a deficit in government is the only way to grow it. Government is the only institution on the face of the earth where current levels of inefficiency serve as a reason to increase the amount of inefficiency. And Papa John Schnatter knows well that his company is not the government.
But it must be remembered that every company that serves Papa Johns will also be increasing their costs. The cheese maker, the sauce manufacturer, the grower of the tomatoes, the butcher of the meats, and even the delivery companies that bring all of the raw materials will, in turn, need to raise their prices in order to pay for Obamacare. Add that to the increased cost that all Americans will see across every area of their current spending (because Obamacare will affect every business in some way) and Schnatter’s estimated 15-20 cent per order will look very small indeed. More expensive pizza is only the tip of the iceberg of the high cost of Obamacare.