Newspaper blames Obamacare for 401(k) cuts
A number of companies have pointed to the Affordable Care Act's health insurance mandate as a reason to trim their operational costs. And sometimes they swing the axe.
San Diego Tribune CEO John Lynch recently told employees that the company is suspending matches to the company's 401(k) plan partly because of “significant additional expense due to Obamacare.”
But the San Diego Union-Tribune isn’t just any business -- it’s been described as a mouthpiece for developer and financier Douglas Manchester, a major Republican party contributor, according to watchdog Media Matters. Since buying the newspaper in 2011, the publication has become “what many consider a front for Manchester's ‘cheerleading’ for business interests and right-wing politics,” Media Matters noted in 2012.
The newspaper’s opposition to Obamacare shines through in its editorial pages, with an October editorial claiming that the “wreckage from Obamacare’s perverse incentives will be immense," the group said.
“Our 401k plan match is a discretionary match,” Lynch wrote in a memo to employees obtained by Poynter.org, the website for the journalism educational center. “Recently, it has been the Company’s practice to match 50 percent of your contribution, up to the first 6 percent of your salary. With that in mind, please be advised that we will temporarily suspend the Company match on the 401k effective 1/1/2014.”
In an emailed response to CBS MoneyWatch, Lynch wrote, "As a private company, the UT does not discuss it financial strategies or challenges." He added, "Suffice it to say our health care expenses have increased significantly."
While the newspaper’s editorial stance is anti-Obamacare, the company isn’t alone in blaming the Affordable Care Act for higher costs — and resulting cuts.
Home Depot (HD), for one, last year said it wouldn’t provide health care for part-time workers, advising them to go to the new public exchanges to buy benefits.
Of course, the newspaper industry has a whole other set of problems: print advertising fell for a sixth consecutive year in 2012, while digital advertising is growing “anemically,” according to the Pew Research Center.
Or, as Lynch wrote in his memo, “the media business continues to face the challenges of a difficult economic recovery.” The company will readdress the match as its business stabilizes, he added.