I have a number of thoughts on this issue, as an insider.
Feel free to skim, ignore, scroll past, and TL;DR this post. I understand people don’t like long posts. Those who don’t: skip it, with my thanks. This is for those people who might care to hear from someone who is inside of the business at a manager level and who is already directly impacted by these decisions, and is powerless to alter them- for people who care.
I’ll toss it in spoilers to make scrolling past it even easier.
[spoiler]Profitability:
Pizza chains sell two-liter bottles of soda for $2.75 and 3.00 a pop. That’s more than two dollars worth of straight profit for an item that costs them pennies to store. They don’t produce it, they just act as a middle-man. They sell breadsticks which cost literally pennies for 4 bucks a pop. It takes seconds to prepare in a pan and seconds to bag up out of the oven.
They deliver, but the fee is 2.75 or 3.00 or more. A dollar of that goes to the driver for gas which is nearly 4 bucks a gallon. They keep the remainder.
Delivery drivers make half of minimum wage on the road. We are encouraged to upsell breadsticks, soda, and other items when we answer their phones.
How much does the employee generate for the company in profit, versus what do they cost?
Work it out. If I deliver 3-4 things per hour, and each one of those deliveries contains a bottle of soda or breadsticks [just focusing on this much], how much do I cost the company?
Suppose 3 deliveries per hour. I’m actually much better than this, but 20 minutes per run is 10 minutes to, 10 minutes back. Not every run should take this long.
Soda is about 2 dollars or more in profit.
Delivery fee remainder which is over a dollar to a dollar and a half, is straight profit because it is a fee.
3.50 in profit minimum. Multiplied by 3 runs. That’s over 10 bucks an hour.
That’s including the gasoline they pay me, otherwise it would be 15.
They pay me just over 4 bucks an hour on the road. Add payroll taxes to that and call it 5 dollars.
Every time I deliver something for my company, I make for them twice to three times what it costs them to pay me. *That’s only if I think about the breadsticks or the soda alone. *I’m not talking about multiple pizzas, wings, or dinner box specials. I’m not talking about dessert items and dipping sauces, which are also quite profitable. This costs them nothing in additional expenses because I’m already delivering something else for them. Everything after that is expense-free, save for the food cost.
If you factor that in, every time I deliver pizza for my company, if we’re talking about after-expenses profit, I create between 10 dollars worth of profit for them, to 20 or 30 in some cases.
If they paid for my healthcare costs, it would cost them a tiny fraction of what they already pay me.
Health care makes the company not profitable, yes or no?
Answer: In no fiscal universe do they ever come even remotely close to losing money on the deal.
They always, always, always, make a whole hell of a lot more in profits.
They used to pay drivers minimum wage. 7 bucks an hour plus gasoline plus customer’s tips. Our wages have been cut in half in the last decade. We used to get more in tips, before they started turning the delivery fee from a dollar fee for gas to a profit-delivery device for themselves.
[ul]
[li]They could pay for our healthcare by simply giving us an additional 25 to 50 cents out of the existing delivery fee.[/li][/ul]
They don’t have to change any prices, anywhere. They don’t need to adjust their business model in the slightest.
Men in huge mansions driving fancy cars are stomping on people who live in absolute utter poverty, and blaming Obamacare.
The businessmen who are throwing a tantrum about healthcare costs need to understand, it costs a delivery driver 400 dollars a month in gasoline alone to operate a vehicle for them. This is also their own vehicle since one is not provided, which means their vehicle is rapidly devalued. It will lose almost all of its value before any loan to purchase said vehicle is paid off.
This does not include tires, which are hundreds per year, oil changes, which are hundreds per year, vandalism, theft, mechanical failure, or the fact that insurance costs twice as much for a delivery driver as it does for a normal driver.
That is 500-600 dollars per month in sunk costs for a driver, who sees a paycheck of 150 bucks a week in actual wages.
Drivers must live on tips, and people do not want to tip a driver if they just paid a delivery fee of $2.75. Many erroneously believe this is the tip, and it’s included.
Drivers are not guaranteed full time hours. Drivers get no employer-based health insurance or dental, and employees who do not work full time get no paid vacation time.
Given the fact that they will still gain a huge amount of profit for every single delivery I take, an additional 50 cents per delivery is not much to ask, particularly considering the fact that there’s absolutely no way a delivery driver can otherwise afford to see a doctor.
There’s no way. They couldn’t afford it working full time, they can’t afford it working part-time.
Can these businesses afford it?
Given these industries are constantly expanding, sales have gone up even in the down economy, and they are posting healthy profits, and given how small the actual costs of this program are per person, and by comparison to the rest of such a company’s budget, and given how they offer free breadsticks or free sodas or free dessert items or free whatevers as part of their marketing every month of the year, it’s painfully obvious that this is not just affordable, it’s a drop in the bucket.
Threatening to retaliate against employees by reducing their hours, and threatening to let people go, is stupid.
Do you know why?
Because I’m in the business, and I know what happens when you do that. To fill the gap on the schedule, you must then immediately hire more people.
It’s a fact. If you need 5 drivers to get through a night, reducing the number of hours per week to each driver, only means you will need more part-time drivers on the schedule. You still spend exactly the same amount of money on these employees. There are simply more of them working less hours.
You cannot simply remove people, because if it takes 5 drivers to deliver 15-20 orders per hour, and you reduce your staff down to 3 drivers, then it will take an hour and a half to deliver the pizzas from that hour. And then you have more deliveries in the next hour.
What happens then?
Each order goes out 30 minutes later, per hour. First it’s 30 minutes, then it’s 60 minutes, then it’s 90 minutes, and you have customers cancelling orders, demanding free meals, and getting cold pizzas.
This is how you run a business into the ground.
Which is a tantrum.
A tantrum over 25 or 50 cents per delivery run, which you’ve already budgeted for with your pure-profit delivery fee that doesn’t go to the driver.
What businessman decides it’s a good business idea to destroy his customer base and reputation in order to spite the employees for 50 cents on health care costs?
Answer: Only stupid ones. So they’re immediately doing the following:
- Reducing hours for current employees, so they can say they’ve done that, “as a result of Obamacare”
- Hiring more employees to cover the gap, because they dare not reduce their profitability by cutting employees.
They’re doing this simultaneously.
And it’s pissing off employees, and making them unable to pay their bills, which will push them further into poverty.
Why are they doing this? It’s not because it will make them more profitable.
[ul]
[li]Obamacare is the law of the land. Doing this doesn’t reverse it.[/li][/ul]
[ul]
[li]They are not reducing their actual cost of labor. In fact, having more, and less experienced, and less happy, employees raises training costs and hiring costs and causes higher turnover. This will cost them more.[/li][/ul]
[ul]
[li]It will inevitably lead to late pizzas, cold pizzas, and free pizzas. Lost revenue due to upset customers.[/li][/ul]
They’re willing to cause 200-400 dollars worth of free pizzas a night, which happens when the business goes past 60 minute delivery times, in order to protest an extra 50 cents to their drivers.
If the store does 100-200 orders per day, and they’re forced to write off 200-400 dollars worth of pizzas per day, how much is that in lost revenue per order?
Answer: Two dollars.
That’s massively more expensive than health care to begin with.
And the protest is symbolic only, and it is meant to make Obamacare politically unpopular. Not because it is actually harming their business model any more than this overreaction to it. By a long shot, their reaction to it will end up costing them millions of dollars, and alienate their own customers.
Instead of happy employees, happy customers, and still awesome profits, they want employees who are disloyal, can’t pay their bills, employees who are sick, customers who are dissatisfied, and product being sold for free instead of turning a handsome profit.
This is just one business. It’s a business I understand very well, because I work there, and I see the numbers every day. I am no longer a driver, I manage the store.
As such, I can see how much everything costs and what people get paid. And I can tell you, the numbers do not lie.
Papa John isn’t alone. Other chains are doing the same. I work at a different chain, they’re doing the same exact thing.
It’s a fact- this is political posturing. There is no actual risk to the pizza business from Obamacare. The only risk comes from the CEOs themselves who do not make the pizzas, do not cook the pizzas, do not box and deliver the pizzas, do not answer the phones, and do not generate customer loyalty through courteous service.
Do not listen to these shameful people. They are taking out political frustration on workers who have already been shafted, repeatedly, by their business decisions.
What I as a manager can do about it: Nothing
Folks, you’re going to start getting cold pizzas, late pizzas, and untrained newbies delivering your food and getting lost. And there’s nothing I can do about it as a low-level manager except apologize, and give you free food. Which costs my company money. I don’t make scheduling or hiring decisions. Those decisions are made above me. I have literally no tools to solve this problem. But I am the one you will be speaking to on the phone when it happens, and you’ll be angry at me because you will believe as a manager, I should do something to make it right.
All I can do is put a band-aid on it. I can’t change the wrong decisions of the corporate owners above me, which render me powerless to stop what is happening. All I can do is give you free food and my sincere apologies.
It all comes down to this
I encourage you to call the corporate offices. Let them know that you received cold pizza and are not happy simply getting credits or freebies. You want your food delivered hot, and fast, and are sick to death of the declining quality of service, and that you’re thinking of never ordering from us again.
When that feedback gets to the higher-ups, they will do one of the following:
[ol]
[li]They will fire the managers and staff of the restaurants in question. This will not solve the problem because that isn’t what the cause is.[/li][li]They will repeal the policies that caused the problem.[/li][/ol]
And if they’re interested in staying in business, they will eventually be forced to do option number 2.
That’s all.
By the way, these businessmen are greedy, which is their prerogative, but they’re stupid, which is harmful to their business, and they’re massively unpatriotic.
[ul]
[li]We have been fighting several wars for a while now. When did we raise taxes on them to pay for it?[/li][/ul]
Where does civic duty play into all this?
These businesses have forgotten that they’re not just businesses, they’re Americans and they employ Americans. They have a duty to their own employees. And when they busted up unions and paid their employees the absolute bare minimum, and then found a legal loophole to cut even that amount in half, their employees asked for and after decades, received, a government mandate that we have some way of getting health insurance.
Instead of saluting the flag and saying yes, this is our duty as Americans, and it’s what the people voted for, certain businessmen are throwing selfish and destructive tantrums that cost jobs and lose profits for their own companies. Instead of asking what they could do for their country, they are telling the country what they won’t do.
Solution:
We need a single-payer system. That way, my health care is derived from my income, regardless of where I work. Or whether I work at all, since people are firing employees over elections, and not actual policy changes that harm their bottom lines in any way shape or form.
Obamacare is better than nothing but it still doesn’t help me when my employer cuts my hours so low that I am forced to quit. I cannot work 3 jobs and be on call for all of them. Employers won’t hire people who have to block off parts of their availability due to holding down several other jobs.
This situation forces people into poverty, due to reduced hours and the inability to get hired when you hold several jobs. This eliminates all possibilities of overtime, vacation time, and employer-provided benefits. But I will have to work more hours than 50 a week in order to make ends meet, even if I could do so, but I cannot, because those hours are not available due to employers making decisions to arbitrarily limit the amount of hours I am allowed to work a week.
People won’t be able to pay their bills, and when people have to quit, they cannot collect unemployment because that’s voluntary termination.
By simply reducing the amount of hours a person has, these businesses have a loophole to avoid any and all employer-based benefits, and they render government safety nets moot.
The simple solution is single-payer. Then it’s an expense that comes out of my income regardless of how many hours my employer chooses to give me. Then it gives the company no incentive to cut my hours, and renders their political protests moot.
At the end of the day someone has to pay for doctor’s visits, and someone has to deliver your pizzas.
The bottom line is that the customer will ultimately be providing the money, and the employee will ultimately be providing the service. How the government and the employer chooses to resolve the rest is not my concern, but if the end result is that I get no hours and I can’t see a doctor, and there are unhappy customers, and the business tanks, then I have a real problem with it. Obamacare is fine but there’s loopholes to get around it, and they all involve the employer shitting on the worker.
There is no compromise with unrepentant greed and selfishness.
When Democrats compromised with Republicans to create Obamacare as the alternative to single-payer, the Republicans still didn’t vote for it. So what was the point of compromising? Then when we implement it, governors say they won’t allow it to happen, and employers shit on their workers and screw them completely out of being able to live their lives. All to save 50 cents a delivery.
They can afford it. They could afford to pay us minimum wage, and did so for many, many years. By all rights, they should be paying us that amount anyway. But since they have been able to afford to pay 3 more dollars per hour, and that’s before a decade of inflation made us poorer, they can easily afford to pay us an extra 50 cents to ensure that I can see a doctor when my appendix is about to burst.
This isn’t a question of finding the middle ground. As the conservative / Republican political movement continues moving to the right, far past the point of rational and constructive differences, as they refuse to compromise and as they refuse to accept deals which are clearly in their favor, all to win a game of political football, and as businessmen and governors refuse to implement the laws at all, the time has come to say that these people have had their chance to compromise and be bipartisan.
Now, the only solution is not to compromise any further on this issue. We must have single-payer. Otherwise businesses which employ the lowest-paid workers in our society will abuse us and put us out on the streets. We cannot afford to have our incomes cut at all. We live paycheck-to-paycheck and one tip at a time as it stands. There’s nothing we can do if our hours are cut. You cannot live on 500 dollars a month. It’s not possible. If businesses won’t make painless business decisions, and governments won’t implement the laws, then it’s time to give them no options except mandatory single-payer healthcare. When hours get cut and my workers have to choose between eating or paying their electric bill, I want them to be able to see a doctor and have them get treated for hypothermia when they have no heat.
And the reason is because the difference between myself and my workers is a dollar or two per hour. If I can’t afford it, there’s no way in hell *they *can.
[/spoiler]