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Wendy’s Franchise Cutting Worker Hours to Avoid Obamacare, Despite Backlash to Other Chains

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An Omaha, Nebraska, Wendy’s franchise owner is joining the list of restaurants vowing to cut worker hours rather than have them qualify for employer-provided health coverage under Obamacare. That’s endangering the livelihoods of around 100 workers who are having their hours cut (managers, of course, are remaining full-time):

The company has announced that all non-management positions will have their hours reduced to 28 a week. Gary Burdette, Vice President of Operations for the local franchise, says the cuts are coming because the new Affordable Health Care Act requires employers to offer health insurance to employees working 32-38 hours a week. Under the current law they are not considered full time and that as a small business owner, he can’t afford to stay in operation and pay for everyone’s health insurance. There are 11 Wendy’s restaurants in the metro. “It has a huge effect on me and pretty much everybody that I work with,” says [hourly worker T.J.] Growbeck, who understands the reasoning and says other part-timers at other fast-food restaurants are facing the same problem. “I’m hoping that I can get some sort of promotion because then I would get my hours, but everybody is shooting for that because of the hours being cut.”

This Wendy’s owner has apparently not learned the lesson of Olive Garden and Red Lobster parent company Darden Restaurants, Papa John’s, or the Denny’s franchise owner who made similar plans, only to have Darden’s profits drop 37 percent in the wake of those threats, Papa John’s suffer in a brand reputation survey, and the CEO of Denny’stell the franchise owner to quit making the chain look bad.

And all of these threats to workers’ livelihoods are coming over what would be tiny increases if the costs were passed directly to customers. When Papa John’s CEO John Schnatter was trying to really scare people, he said his chain would pass along a 10 to 14 cent increase in the cost of a pizza—less than $22 a year if you ate Papa John’s three times every single week. But when Forbes‘ Caleb Melby did the math on Schnatter’s claims, it worked out to less than 5 cents per pizza. Mind you, all of the wailing these chain executives and franchise owners do about how they can’t afford health care is suspect to begin with. But when they’re not willing to contemplate even the smallest price increases rather than cutting already poorly paid workers down below 30 hours a week and risking what’s now been shown to be significant public relations costs, that’s a clear statement that this isn’t some kind of pure, rational business decision. It’s an ideological stance against anything that might benefit the low-wage workers on whom the fast food industry relies.

This post was originally posted on The Daily Kos – Labor Blog on January 8, 2013. Reprinted with Permission.

About the Author: Laura Clawson has been a Daily Kos contributing editor since December 2006. Labor editor since 2011.


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Mad at Obama, Papa John’s Will Cut Hours To Rob Employees of Healthcare

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Papa John’s CEO John Schnatter is angry about Obamacare, and he’s taking it out on his employees. The healthcare reform law mandates that, by 2014, employees who work more than 30 hours per week at companies with more than 50 workers must be covered by their employer’s health insurance plan. In light of Obama’s re-election, the pizza magnate announced that he will cut workers’ hours in order to create a part-time workforce and dodge the cost of providing healthcare coverage.

Papa John’s is the third-largest pizza chain in the nation with about 16,500 employees, but the company currently only provides healthcare coverage to one third of its workers. Schnatter claims he wishes all of his employees could be on the company’s healthcare plan, but that rising health insurance costs are prohibitive. He tells ABC Action News, “The good news is 100 percent of the population is going to have health insurance. We’re all going to pay for it.”

Schnatter, who was a supporter of Mitt Romney and helped raise funds for the Republican presidential candidate, started voicing his opposition to the Affordable Care Act in the months leading up to the election. In August, he complained that the reform would cost his company 11-14 cents per pizza or 15-20 cents per order (though Forbes calculates the actual cost would be 3.4-4.6 cents per pizza) and that Papa John’s would pass those costs onto customers by raising pizza prices.

To many, raising pizza prices seems like a more reasonable approach to offsetting some of the costs of healthcare reform than cutting employees’ hours. The public response has been largely, “I’d pay an extra 14 cents per pizza for your employees to have healthcare.” Many have proposed boycotting the company, such as Reddit user goforReaper:

I haven’t had a Papa John’s pizza in months since he first claimed that Obamacare would cause him to raise prices—and I assure you, all of my cheap pizza needs have been fulfilled by other, equally shitty establishments. Reddit, let’s send him a message and stop buying his pizza. His employees deserve decent wages and access to healthcare, and if he doesn’t think so, he can sit with the rest of the Romney camp and circle jerk about how tough their lives are!

It seems Papa John’s is likely to lose more money from the negative public response than from the healthcare reform—Forbes reports that that the company’s shares have dropped 4.2% between Thursday and Monday. But such boycotting risks further harming these workers it aims to defend, as Mediaite points out:

The problem with boycotting Papa John’s (aside from the fact that it’s hard to refuse to buy pizza from a chain you already don’t buy pizza from) is that it actually hurts the employees on whose behalf we’re all outraged. A far better solution would be to send a check for $0.14 to John Schnatter every time you buy a pizza. Concerned citizens could also organize a Tipcott™, wherein they order the cheapest thing on the Papa John’s menu, then give the driver, like, a 100% tip.

On the other end of the spectrum, some have declared strong support for Papa John’s and are trying to use the issue to spark a movement in opposition of the healthcare reform law. In fact, @Reboot_USA started a Facebook campaign declaring Nov. 16 National Papa John’s Appreciation Day, on which Papa John’s supporters visit their local Papa John’s and order a pizza to stand against the “fiscal nightmare” that is Obamacare.

This article was originally posted on Working in These Times on November 16, 2012. Reprinted with Permission.

About the Author: Sarah Cobarrubias is a freelance writer and editor at Chicagoista. She lives in Pilsen, IL.


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Walmart’s Black Thursday Hits Paducah

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James Vetato planned to spend Black Friday wearing out shoe leather on a picket line at the Southside Walmart in Paducah, Ky.

“Now I’ll be there Thanksgiving night, too,” Vetato said. “Walmart has announced it will be open at 8 p.m. Thanksgiving night, which will prevent a lot of the associates from spending the holiday with their families.”

Vetato, 47, is an organizer with OUR Walmart—Organization United for Respect at Walmart—a national association of current and former Walmart employees, several thousand strong, who will be walking picket lines and striking at dozens of Walmart stores across the country on Turkey Day and Black Friday.

OUR Walmart wants to shine a national spotlight on Walmart’s abuse of its workers, Vetato said. The organization chose the day after Thanksgiving because it is the busiest shopping day of the year.

We are fighting to win respect and improve working conditions for all associates.

Vetato, who worked at the store he will be picketing, hopes OUR Walmart will become a union.

Before I worked at Walmart I wasn’t that big on unions. I didn’t think a union was a bad thing. I just didn’t know anything about unions. Now I think every workplace should be unionized.

According to Vetato, OUR Walmart has about 15 members in historic Paducah, where the Tennessee and Ohio rivers merge. “We’re relatively new so we’re not that big. But our numbers are growing.”

Vetato said the United Food and Commercial Workers (UFCW) union is providing financial backing and other valuable help to OUR Walmart, some of whose members, including Vetato, have demonstrated at Walmart corporate headquarters in Bentonville, Ark.

AFL-CIO-affiliated unions support Vetato’s group, too. “We stand in solidarity with the Walmart workers and will be glad to help them in any way we can,” said United Steelworkers (USW) Local 9447 President Jeff Wiggins, who is also president of the Paducah-based Western Kentucky AFL-CIO Area Council.

Vetato said fear is keeping more Walmart workers from joining OUR Walmart.

There aren’t that many jobs around here. But Walmart has pushed people so hard, they have decided enough is enough and they are not going to take it anymore.

Vetato said management drove him to quit the Southside store after two years.

It all started after I was speaking with an associate in the back room who was complaining about the way things were. I said things would be better if everybody stood together and took our problems to management.

A manager overheard the conversation, according to Vetato. “He said he was sick of my kind coming into the store and undermining what he was doing. He doubled my workload and cut my hours.”

But what really made me say ‘enough is enough’ was when he made some inappropriate comments about my 15-year-old daughter. I complained to the store manager and he told me he didn’t have time to micromanage the store.
James Vetato and son.

Vetato has worked at odd jobs since he left Walmart in October 2011. “When I apply some place and say I worked at Walmart and they call Walmart, I suspect Walmart won’t give me a good recommendation,” he said.

Meanwhile, the OUR Walmart actions began in October in Southern California when, for the first time ever, employees went on a one-day strike. Said Vetato:

Across the country, Walmart employees have filed many, many unfair labor practice charges against the company because of the way the company is treating them. Walmart refuses to address our concerns, even those that would help the company. If you speak out, you face retaliation.

Walmart, which is fiercely anti-union, has put out training videos aimed at discrediting OUR Walmart, according to Vetato. “They say all we are trying to do is take your money and get your personal information and cause trouble.”

Vetato said Walmart’s current business model includes canceling profit sharing for associates, increasing their health care costs by 36% and reducing their hours.

They are really trying to push full-time and older employees out the door and replace them with younger and part-time people.

This article was originally posted on AFL-CIO NOW on November 21, 2012. Reprinted with permission.

About the Author: Berry Craig is a recording secretary for the Paducah-based Western Kentucky AFL-CIO Area Council and a professor of history at West Kentucky Community and Technical College, is a former daily newspaper and Associated Press columnist and currently a member of AFT Local 1360.


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