Papa John’s Pizza CEO Steps Right Into Obamacare Controversy

It’s never really quite clear why some business owners want to muddy their brand name by stepping right into some political controversy, but you’d have to ask CEO John Schnatter why exactly he decided that announcing that his company is likely to cut employee hours when The Affordable Health Care Act is set to begin. The law states that employees who work 30 hours or more a week will be covered under the company health insurance plan.

John Schnatter didn’t really make it clear whether he actually opposes the law, which he also claims will have the “good news that 100% of the population will have health insurance”. But, Schnatter told his shareholders in one meeting that the legislation will add about 11-14 cents to a cost of a pizza.

So what’s the deal here? Schnatter supposedly hires the correct number of employees to produce his pizzas, so it’s unlikely that he can cut labor that way. So does he just hire more workers for less than 30 hours a week instead and try to skirt his company paying health care costs and instead try to push more of the expense for public health care on the average taxpayer to pick up? Maybe? That’s just about what WalMart has been accused of doing for years, hiring employees at low wages who often seek out public benefits such as public health care to make up for what the employer doesn’t pay them. Many large national businesses are highly profitable because they figure ways to actually operate below their real costs of doing business, underpaying their employees who then have to seek public services to supplement what should of been part of a decent job salary and benefits package. Welcome to reality.

Regardless of this latest controversy, John Schnatter is a popular public figure, often even featured on ENTERTAINMENT TONIGHT. But, the latest controversy has some political progressives claiming that they will boycott Papa John’s Pizza in response to Schnatter’s comments, although, like everyone else, they are a little unclear what exactly he was even trying to say. Schnatter seemed to praise the law on one hand, while looking for a legal loophole to keep his company costs down. Is that being pragmatic, or just straddling yhe issue?

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  • RichFader

    Elections have consequences? What a concept!

    • But, it’s also unclear what exactly John Schnatter was trying to say here as well. Was he just stating fact to his shareholders, or else making a political stance on a law he opposes? At any rate, his statements might be costing the company some backlash from some consumers. On the other hand, I seriously doubt that consumers are going to notice some small 11cent price increase when they buy a $22 pizza at Papa John’s that includes the new Taylor Swift cd in the deal, or their $11 dollar pizza specials. 11cents seems pretty insignificant compared to lots of inflation on dairy products or other ingredients over the last few years, especially with the drought this year boosting dairy prices. John Schnatter’s statements don’t seem to be worth the public relations problems they seem to be generating.