It turns out the costs exacted by the new law are enough that it will cut Columbus-based White Castle's net income in half.
And that's not an exaggeration.
Now imagine what that will do to jobs? Scary, eh?
This analysis comes straight from Jamie Richardson, an executive with White Castle:
BackgroundThis is simply unacceptable.
We have an exceptional benefits program, including exceptional health care. Depending on specific plan, we cover anywhere from 70% to 89% of premium costs. We’ve also, as you know, been in the neighborhoods where we do business for decades now. When business situations have got tough, we haven’t abandoned ship, but continue to offer good paying jobs and exceptional benefits creating a platform for prosperity.
We wanted to start to estimate what our potential liability will be after 2014 with regard to the 9.5% of Household Income provision, assuming all things being equal to where we are today. To do this, we pulled Household Income data for all 421 of our Castle trading areas, and used this to approximate the Household Income of team member households. (Most often our employees are reflective of the neighborhoods where we do business.) We then applied weight averages to the different plans to determine approximately how many team members would have their premium amount exceed 9.5% of household income.
In present form, this provision alone would lead to approximate increased costs equal to over 55% of what we earn annually in net income. (Based on past 4 year average.) Effectively cutting our net income in half would have devastating impact on the business – cutting future expansion and more job creation at least in half. Sadly, it makes it difficult to justify growing where jobs are needed most – in lower income areas.
And it's what President Obama, Ted Strickland, Mary Jo Kilroy, Steve Driehaus, Charlie Wilson, Betty Sutton, John Boccieri and so many other Ohio Democrats wanted.
I hope no one tells Harold and Kumar.