Ezra KleinEzra Klein tells us that we shouldn't laugh when John Schnatter of Papa John's Pizza tells us that the ACA will cause pizza prices go up by between 11 and 14 cents. It's nice to have such understanding people like Klein around. And the argument he makes isn't bad, "The Affordable Care Act isn't helpful to their business strategy." And indeed it is not.

Klein goes on to point out that the ACA is helpful in leveling the playing field between companies like Papa John's that want to treat their employees badly for the sake of a few cents and companies that treat their employees reasonably well. (Examples? I don't know: CostCo?)

There is one bit of information about this that Klein seems to be particularly interested in:

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 problem is that Klein doesn't put these bits of information together. Based upon my admittedly meager economics knowledge, I'm willing to admit that Papa John's can't sell their pizzas for any more than they currently do. But economics tells us that they sell their pizza for the most they can. So if their pizzas are going to cost more to make, they will have to eat that cost.

But what is that cost? Let's do a simple calculation. Let's assume that Papa John's pizzas cost $11.00 and that the increase in price is 11 cents. (This is erring on Papa John's side; they likely charge more for pizza, but their website doesn't want to say without an order.) That's a 1% increase in costs. In 2010, they grossed $1.126 billion and netted $51.94 million. This implies that the ACA will cost the company $10.7 million.

(This figure is curious. If Papa John's payed the $2000 fine for not insuring their 16,000 employees, that would be $32 million. But it is hard to say given that Papa John's is a franchising company. So we'll just use their numbers. I'm sure they wouldn't promote a number that understated the cost.)

This would indicate that Papa John's would only net $41.2 million per year. (For the record, I think the losses would be closer to $5 million, given the prices of most pizzas.) And Papa John's could cut other expenses, such as Schnatter's salary as CEO.

Ezra Klein notes above that profits are at an all time high. So I don't have a lot of sympathy about their profits decreasing by as much as 20%. The issue is not do people like John Schnatter want to keep as much money as they can. After all, coal companies would like to keep money they have to spend complying to environmental regulations. The issue is if their current business practices are fair to the society as a whole. In this case they are not. Those extra profits the company is making now are essentially stolen from the society at large.

As for me, I will not eat at Papa John's again. John Schnatter has seen to that. Nor will I eat at Olive Garden. Or any of these businesses owned by evil fucktards.