Cheer Up, Papa John’s. Obamacare Gave You a Good Deal.
Ezra Klein explains how Obamacare slows down the race to the bottom to create a level playing field:
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.
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.
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.
[…] both Democratic and Republican presidents used to think the proper role for business in the American health-care system was to pay most of the cost of their employee’s health-care insurance.
Under the Affordable Care Act, the principle is different, and much less onerous: Employers don’t need to offer health care, and they don’t need to pay for most of the cost of their employee’s health care, but if their employees are taking advantage of public subsidies, then the employer should have to pay a penalty equal to about 1/8th the cost of the average employer-provided health-insurance plan.