The founder and CEO of Papa John’s Pizza — “Papa” John himself — says his prices will be going up unless the health care reform bill is repealed. During a conference call to investors, John Schnatter predicted the price of a large pizza would go up by about 14 cents on average as the company passes the extra expense of providing health care to his employees to his customers:
“If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders’ best interests.”
Though he didn’t hold a press conference to announce the change as a calculated political move, his comments quickly went viral.
This episode was a lot like the Chick-Fil-A episode, in which its chief, Dan Cathey, was asked about his company’s well-established history of donating to charities that are pro-Christian. It set off a firestorm not because the LGBT community didn’t know that Chick-Fil-A is a pro-Christian organization, but because of Cathey’s frankness in answering the question.
In this case, Schnatter was responding to a shareholder’s inquiry about the impact of the Affordable Care Act, which conservatives have dubbed “Obamacare,” on the company’s bottom line.
But unlike the Chick-Fil-A situation, Schnatter had a way out that would have quieted the controversy to come. He just chose not to use it.
Cathey, no matter how he chose to answer the question, was going to be a target of the LGBT community. If he was honest and stood his ground, admitting to what everyone already knew, he was a hater, a homophobe, or both. But if he tried to dodge the question or tried to downplay his company’s charitable contributions, he’d have been accused of being two-faced and dishonest.
As Captain Kirk once said, “I don’t believe in no-win scenarios.”
But the pizza question wasn’t a no-win scenario.
His first option was promising, as he did, to make sure his company’s big profits and his shareholders’ interests were protected by passing the cost directly to the consumer. This is exactly what businesses do with nearly every other new expense that comes their way: we always foot the bill.
His second option, however, could have been a much more successful public relations move: he could have been a lot more diplomatic. He could have acknowledged that health care is important for everyone, including his valued employees, unless of course he doesn’t value them as much as one would expect him to. At the very least, he could have avoided vowing to find “tactics to shallow out” costs to his customers, which just sounds so punitive.
Unless, of course, you’re an investor.
Schnatter is, as you may have guessed, a Romney supporter. Not only that, he hosted a private fundraiser for the candidate at his Louisville home, charging $1,000 per person to get in and $2,500 for a photo op with Romney. So his position on “Obamacare” isn’t that much of a surprise.
Even though his position on his own employees’ coverage sounds a bit surprising. What makes it look so much worse is the cost he’s apparently so eager to “shallow out.” Fourteen cents.
Is there anything you can buy these days for just 14¢? Off the top of my head, I can’t think of anything that cheap. Maybe a gum ball.
It’d be one thing if the cost of pizza was going to “skyrocket” by five bucks or more. But 14¢? Really?
It begs an important question: if, for less than a dime and nickel per pizza, his company could lead the way in providing health care for all of its employees, why wouldn’t it want to? Don’t happier employees who feel they’re being treated better and valued more tend to do a better job at serving their customers? And aren’t customers who get superior service more likely to return?
Don’t we want healthier people when it comes to those who serve our food? I don’t know about anyone else, but now his comments have me thinking about it, I’m not at all sure that I like the notion of my lunch or dinner being prepared by a person who’s potentially ill but can’t afford a doctor’s appointment. Not that I’m a germophobe, but it’s enough to give one pause.
If I were going to buy a Papa John’s pizza, or any other fast food meal anywhere, I’d gladly pay an extra 14¢ if I knew it was helping make sure more people, particularly underappreciated part-time employees who often can’t afford basic health care, have it. As a taxpayer, I’m already paying for those who don’t have it. If there’s a chance that I can pay such a tiny amount to get more people covered and potentially lower costs elsewhere, why wouldn’t I want to do so?
I suspect that a larger segment of Papa John’s customers would feel the same way.