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Thread: The cost of the Affordable Care Act

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  1. #41 Default  
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    Quote Originally Posted by [cerberus] View Post
    So $2 in materials, but what about overhead. Your pay check, your co workers paycheck, the cost of the building, the cost of electricity, insurance, taxes, permit costs, there are a lot of things that drive the price of things other the the parts that go into them.

    I have just started building shooting targets for sell, really low volume, and I have been learning a lot about what my real profit should be and that what I thought I could make for a lot less, I really cant without shortchanging my time. Everyone in this thread who thinks they have the simple answer needs to go back working for the man. (I am in this also)
    My limo business may not have succeeded but I certainly learned a lot about the real costs of doing business.
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  2. #42 Default  
    Uh how come no one has observed that Papa Johns happens to be in the type of business that is forced to make its product in the US with American workers. Therefore, they have only 3 options: 1) eat the cost completely, 2) make up for that cost with an increase in menu items and potentially risk reduced sales*, 3) reduce worker hours or compensation.

    Most likely thing they will do is option 3. However, what about a different company, with just as many jobs, that could just as easily have the stuff made in, oh I don't know, China? Obama keeps paying lip service to this "tax break for sending jobs overseas," which BTW I have no idea what he is talking about, but then he passes stuff that will only increase the costs of hiring American workers.

    *this relationship between price and revenue is seemingly lost on the government. they seem to think you can just increase the price forever and always count on increased revenue. if only business were that easy, we'd all be rich.
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  3. #43 Default  
    Quote Originally Posted by Big Pete View Post
    Uh how come no one has observed that Papa Johns happens to be in the type of business that is forced to make its product in the US with American workers. Therefore, they have only 3 options: 1) eat the cost completely, 2) make up for that cost with an increase in menu items and potentially risk reduced sales*, 3) reduce worker hours or compensation.

    Most likely thing they will do is option 3. However, what about a different company, with just as many jobs, that could just as easily have the stuff made in, oh I don't know, China? Obama keeps paying lip service to this "tax break for sending jobs overseas," which BTW I have no idea what he is talking about, but then he passes stuff that will only increase the costs of hiring American workers.

    *this relationship between price and revenue is seemingly lost on the government. they seem to think you can just increase the price forever and always count on increased revenue. if only business were that easy, we'd all be rich.
    ^ all fantastic points.
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  4. #44 Default  
    Quote Originally Posted by [cerberus] View Post
    So $2 in materials, but what about overhead. Your pay check, your co workers paycheck, the cost of the building, the cost of electricity, insurance, taxes, permit costs, there are a lot of things that drive the price of things other the the parts that go into them.
    $2 per pie in raw materials. Everything else you mentioned comes from the $4-13 they up the price by (not including addl charges for toppings) plus the margins on upsells like sides & drinks and delivery surcharges. He's obviously a very successful company based on his continued rise in franchising, profits & stocks prices. He personally lives very comfortably. So he's obviously found the right pricing to make his company continually profitable. We're arguing his, and possibly other companies, decision to instead hurt employees over what seems like a trivial added cost that would be passed to the consumer.
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  5. #45 Default  
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    Quote Originally Posted by mthaynes View Post
    Not going to make friends with this post but these are my feelings:

    Papa John (him or his family) built that shit. he is successful and now the "entitlement focussed i dont want to work" people of this world expect him to pay for them. I have built a business as well, I pay for my health care. I don't want to have to pay for other people that dont do shit, sit home, and suck the federal tit.

    When I became a US citizen, I learned that in America you have the right to pursue freedom and happiness. It seems people now believe they have the right to freedom and happiness.
    Freedom is supposed to be an inalienable right. We're only entitled to pursue happiness.

    How is it not the same entitlement mindset when some corporate cunt thinks he should be able to employ people for shitty wages while letting state and local governments pick up the health care costs for his uninsured employees?

    And yes, the whole 'they should find a better job' argument. That's great. For the sake of argument, let's assume that if someone is working full time at poppa pizzaface that is the best job they are able to find.

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  6. #46 Default  
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    Quote Originally Posted by LastMercury View Post
    $2 per pie in raw materials. Everything else you mentioned comes from the $4-13 they up the price by (not including addl charges for toppings) plus the margins on upsells like sides & drinks and delivery surcharges. He's obviously a very successful company based on his continued rise in franchising, profits & stocks prices. He personally lives very comfortably. So he's obviously found the right pricing to make his company continually profitable. We're arguing his, and possibly other companies, decision to instead hurt employees over what seems like a trivial added cost that would be passed to the consumer.
    But it's not a trivial cost even at $8mill it's more than 10percent of total profits... And at 15per cent it's a little less than a 1/3
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  7. #47 Default  
    Quote Originally Posted by LastMercury View Post
    $2 per pie in raw materials. Everything else you mentioned comes from the $4-13 they up the price by (not including addl charges for toppings) plus the margins on upsells like sides & drinks and delivery surcharges. He's obviously a very successful company based on his continued rise in franchising, profits & stocks prices. He personally lives very comfortably. So he's obviously found the right pricing to make his company continually profitable. We're arguing his, and possibly other companies, decision to instead hurt employees over what seems like a trivial added cost that would be passed to the consumer.
    I still dont understand how giving up more than 30% of profit is considered trivial. $0.25 in price increase will affect sales. Most people will be ok with paying $0.25 more, but even if 1 in 10 people have a problem with $0.25 increase, they will lose 10% of their sales. But agree to disagree, I dont think it is trivial at all.
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  8. #48 Default  
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    Quote Originally Posted by 55fanatic View Post
    I don't give a lick if papa johns goes out of business... What I want People, is to know THEY ARE STILL PAYING FOR THIS. If he wants to raise prices $.14 or $.50 per item... It's coming out of your pocket. Not his.

    Our president looks like a hero, but in the end WE are still paying for this crap, and now it means at the end of the day, less money sits in my pocket. It's going to trickle down through everything you do day to day in life.
    Great. Our entirely consumer-based economy is completely unsustainable. Whether this will be a step towards a stronger nation as giant corporations operating on razor-thin margins have to scale back or increase their low low prices, or we're already passed the point of no return only time will tell. There aren't very many third-world nations remaining for us to industrialize in order to keep our prices artificially low for consumer goods.

    And for this place being stuck paying for American labor while others can go overseas, I'd be plenty happy to see 'human rights' tariffs imposed on goods from shitty places. We should be able to trade with Europe on even ground. Shit from China should be marked up like a motherfucker. We allow this garbage to stream in to our nation with prices so low that domestic manufacturers can't compete. If it means that consumer goods cost more, then that's right. Our current situation is entirely artificial and will fail. It's up to us whether that failure is a gradual transition or a drop off a cliff.

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  9. #49 Default  
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    Quote Originally Posted by Justin.b View Post
    Freedom is supposed to be an inalienable right. We're only entitled to pursue happiness.

    How is it not the same entitlement mindset when some corporate cunt thinks he should be able to employ people for shitty wages while letting state and local governments pick up the health care costs for his uninsured employees?

    And yes, the whole 'they should find a better job' argument. That's great. For the sake of argument, let's assume that if someone is working full time at poppa pizzaface that is the best job they are able to find.

    -Justin
    Wages are determined by market, not some person in an office. As I have looked for entry level jobs, I'm noticing a major drop in pay. Why? Because in this area there is an over abundance of qualified workers in my field. Supply and demand determine the pay. Way too much supply for any given demand is going to drive down the price
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  10. #50 Default  
    Quote Originally Posted by Justin.b View Post
    Freedom is supposed to be an inalienable right. We're only entitled to pursue happiness.

    How is it not the same entitlement mindset when some corporate cunt thinks he should be able to employ people for shitty wages while letting state and local governments pick up the health care costs for his uninsured employees?

    And yes, the whole 'they should find a better job' argument. That's great. For the sake of argument, let's assume that if someone is working full time at poppa pizzaface that is the best job they are able to find.

    -Justin
    Point 1: Entitlement = You want it given to you. Entrepreneur = you are willing to work for it

    Point 2: State and local are forced to pick up the bill when, people dont pay there bills were back to people wanting it given to them for free.

    Point 3: Supply and Demand. lot of jobs out there, but skilled candidates are few and far between.
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  11. #51 Default  
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    Quote Originally Posted by 55fanatic View Post
    But it's not a trivial cost even at $8mill it's more than 10percent of total profits... And at 15per cent it's a little less than a 1/3
    When a pizza chain has promotions like 2,000,000 free pizzas figured into their expenses while running not-exceptional margins, I'm not too concerned about throwing them another expense.

    Also, this is shifting the expense that the public is already paying in the form of emergency room care for poppa's uninsured employees. Obamacare just shifts some of the expense back to the corporation that benefits. The current system is an entitlement program for corporations... which is apparently acceptable as long as we don't give poppa a cell phone.

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  12. #52 Default  
    Quote Originally Posted by 55fanatic View Post
    Wages are determined by market, not some person in an office. As I have looked for entry level jobs, I'm noticing a major drop in pay. Why? Because in this area there is an over abundance of qualified workers in my field. Supply and demand determine the pay. Way too much supply for any given demand is going to drive down the price
    ^this. your were typing the same time i was
    I am not a 14 year old girl, but I play one on the internet.

    Who was the first person to look at a cow and say 'I don't know what these dangly things are, but I am going to yank on them and drink whatever comes out.'
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  13. #53 Default  
    Quote Originally Posted by Justin.b View Post
    Freedom is supposed to be an inalienable right. We're only entitled to pursue happiness.

    How is it not the same entitlement mindset when some corporate cunt thinks he should be able to employ people for shitty wages while letting state and local governments pick up the health care costs for his uninsured employees?

    And yes, the whole 'they should find a better job' argument. That's great. For the sake of argument, let's assume that if someone is working full time at poppa pizzaface that is the best job they are able to find.

    -Justin
    It's not that they are entitled to it. It is that if they cannot afford to employ people in this country, or it is financially detrimental, they will employ them in another country. Tax rates are HUGE in this game. Its not just the unskilled jobs going over seas to countries where people will work for next to nothing. Skilled Labor is going overseas to first world countries like us, but that have a lower corporate tax rate. Want to know why GE paid $0 in corporate income tax to the US? Because they deducted all of it under "foreign taxes paid." Want to know why they paid taxes in other countries instead of here? Because its a lot cheaper that way. My friend works for Johnson and Johnson. Big Pharma. Skilled Labor. They have a plant in Switzerland. Why? Because our corporate tax rate is 35% and theirs is like 15%.

    This is because the government does not understand the relationship between cost and revenue. They think every time they raise rates they will get progressively more money. But it does not work that way. A company can only raise prices so much before people stop buying the product.
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  14. #54 Default  
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    Quote Originally Posted by Justin.b View Post
    When a pizza chain has promotions like 2,000,000 free pizzas figured into their expenses while running not-exceptional margins, I'm not too concerned about throwing them another expense.

    Also, this is shifting the expense that the public is already paying in the form of emergency room care for poppa's uninsured employees. Obamacare just shifts some of the expense back to the corporation that benefits. The current system is an entitlement program for corporations... which is apparently acceptable as long as we don't give poppa a cell phone.

    -Justin
    This is a great idea, assuming the corporation is going to absorb the cost, but it's not going to...
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  15. #55 Default  
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    Quote Originally Posted by Big Pete View Post
    It's not that they are entitled to it. It is that if they cannot afford to employ people in this country, or it is financially detrimental, they will employ them in another country. Tax rates are HUGE in this game. Its not just the unskilled jobs going over seas to countries where people will work for next to nothing. Skilled Labor is going overseas to first world countries like us, but that have a lower corporate tax rate. Want to know why GE paid $0 in corporate income tax to the US? Because they deducted all of it under "foreign taxes paid." Want to know why they paid taxes in other countries instead of here? Because its a lot cheaper that way. My friend works for Johnson and Johnson. Big Pharma. Skilled Labor. They have a plant in Switzerland. Why? Because our corporate tax rate is 35% and theirs is like 15%.

    This is because the government does not understand the relationship between cost and revenue. They think every time they raise rates they will get progressively more money. But it does not work that way. A company can only raise prices so much before people stop buying the product.
    Damn this logic!
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  16. #56 Default  
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    Quote Originally Posted by 55fanatic View Post
    This is a great idea, assuming the corporation is going to absorb the cost, but it's not going to...
    In my opinion, it's another Wall St. vs. Main St. situation. Wall St. wants big sales numbers and sales growth. Operating costs, profits and margins are all more complicated than they need to get when selling stocks to mutual fund buyers.

    IMHO, a business that needs to take in a billion and a half dollars to barely turn a profit is not sustainable. At some point in their expansion, their internal corporate structure became so expensive (when you have to manage a nationwide network of 4000 stores, it costs money) that they passed the point (IMHO, again) of viability. Of course, the people in a place to point out that this transition occurred are themselves part of the swollen costs so it's not likely to be brought up.

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  17. #57 Default  
    On what do you basis this opinion? You're not really presenting any facts here, just "I hate big companies, fuck them." Meanwhile the costs on small businesses are going up as well.
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  18. #58 Default  
    any business take in a large sum of money to make a small profit. thats how it works. because if your profit margin is too high someone else will just undercut you with lower prices and your company folds. And consumers tends to pick the cheaper one if the product is identical. Hell most of the time consumers will take the cheaper one even if its an inferior product. Why do you think walmart is one of the biggest corporation out there? its not because they charge a premium, its because they undercut everyone, have a tiny profit margin and make up for it in volume. I'm sure businesses would love to have a larger profit margin, but thats not something business can just pick a larger number, the market decides what to buy and how much to pay.
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  19. #59 Default  
    different models work for different businesses.
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  20. #60 Default  
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    From the Forbes article:

    Last year, Papa Johnís International captured $1.218 billion in revenue. Total operating expenses were $1.131 billion.

    That's a 7% profit margin.

    I'm betting that if you put together a business plan for a company you were thinking of starting and even with squeezing your own salary and maybe cost-engineering your product as best you could, a projected margin of 7% likely wouldn't be enough for you to follow through on it. You may never earn back your startup costs at that margin.

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