On Thursday’s NOW w/Alex Wagner, the panel discussed reports that some Wendy’s and Taco Bell franchises are cutting back employee hours in order to avoid having to pay for their health care under a new provision in President Obama’s Affordable Care Act set to go into effect in 2014.
“There’s a trend toward trying to reclassify people as part-time workers to avoid paying them benefits, and one of the ideas of this provision of the law was to try to penalize employers who don’t give health benefits to its workers,” said Slate’s Matthew Yglesias.
“Unfortunately because of the way it’s drafted, it’s created this huge incentive for employers to cut people below the 30-hours threshold, you’re seeing it with these fast food chains and it’s something that people should be pretty worried about because there’s a clear financial incentive now for companies to rejigger and push people’s hours down,” he added.
The panel also reacted to Papa Johns CEO John Schnatter’s comments last year in which he said the cost of every pizza would have to go up by 11 to 14 cents because of the law. Alex referred to a New York Times article over the weekend detailing how worker’s wages have stagnated at the same time that corporate profits have soared before asking New York Times columnist and CNBC host Andrew Ross Sorkin if the law was too burdensome on businesses.
“No! It’s not a horrible price to pay, it’s 14 cents!” Sorkin said. “It’s pathetic to hear these CEOs scream about this particular issue in that particular sector.” He noted that the story would be different in manufacturing where U.S. companies routinely have to deal with intense competition from foreign companies that benefit from low-wage workers.
Yglesias, who has written extensively about this issue, said that fast-food workers in the U.S. would continue to have little leverage as long as the nation’s stubbornly high unemployment rate persists. “As long as unemployment stays around 8%, as it’s been for a long time now, it’s very easy for bosses to get over on people,” he said. “If the law’s not airtight they’re gonna find ways to push those costs down to their lowest paid employees.”
Steve Kornacki, co-host of “The Cycle,” predicted that grousing from CEOs about Obamacare will abate as the country becomes more accustomed to the fact that it is the law of the land. “Maybe this is residual caterwauling from the CEO’s and Republican governors saying, ‘we’re gonna fight this tooth and nail,’ but maybe a year or two from now we stop hearing that,” he said.
Meanwhile, The Huffington Post’s Ryan Grim said the disconnect between stagnant wages and surging corporate profits was a cause for concern. “A sane society would say ‘everyone benefits from a more productive society,’” he lamented, “but that’s not the society we have.”
Matthew Alexander