Wednesday, November 21, 2012

Corporations Are People, My Friends

Ezra Klein, making sense on the Papa John's Obamacare strategy:
Businesses try to cut costs. One way they do that is by skimping on employee pay and benefits. The Affordable Care Act, at least in the short-term, will raise costs on businesses that have pursued that particular cost-cutting strategy. 
I love that Klein used the word "skimping" here. Of course, the fast food industry doesn't just skimp on employee pay and bennies.  They skimp on pretty much everything that has to do with their business, with the exception of marketing.  If it weren't for the marketing, Big Macs would have to sell themselves.

Have you ever had a Big Mac?  They do not sell themselves... 
As Slate’s Matt Yglesias has noted, that makes the Affordable Care Act an intervention on a particularly worrying change in the economy. In recent years, corporate profits, measured as a percentage of the U.S. economy have been hitting record highs, even as the share of those profits that go to workers have hit record lows.
Once you understand that, it's a little harder to go along with the "corporations are people" line of argument.  At best, it's a crude oversimplification.  Corporations aren't so much people as they are two distinct classes of people.

You have the makers, who do the work...and the takers, who pocket the profit.  (Rimshot!)  I kid, I kid.

More Klein:
The health-reform law won’t reverse that trend, but for the businesses that are doing the most to drive it — the ones that have cut costs and boosted profits by paying their workers very little and refusing to offer them decent health insurance — the Affordable Care Act will force them to contribute a bit more toward their workers’ health care or raise their prices. And if they choose the latter route, then fine: It levels the playing field between them and their competitors who haven’t taken a low-road approach to paying their workers. That gives pizza companies that do pay their employees well a slightly better position in the marketplace than they have today.

That won’t make Papa John’s feel better, and it shouldn’t. The Affordable Care Act isn’t helpful to their business strategy. Rather, it’s helpful to the business strategies of companies that have sought success by paying their workers good wages, giving them reasonable benefits, and delivering a higher quality product. Which should make us feel better.

Yes! He gets it. The low-pay/crappy product model is a choice, and a not very helpful one. Time to choose a better way, America.

Speaking of...that clown who promised to add a 5% Obamacare surcharge to the customer's of his various Denny's restaurants? He's backing down now after talking to the Denny's CEO.
"While we respect the decision of an independent business owner to speak out on this or other topics and express their personal views, his statements do not capture the respect by Denny’s, the Denny’s Franchisee Association or our franchise community at large for our hardworking employees or for our valued customers," John Miller, CEO of Denny's Corp., said in a statement.
Good call, Mr. Miller.

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