Saturday, August 11, 2012

The Outrageous Cost of Cheap Pizza

The Huffington Post Article "Papa John's Pizza to Raise Prices Because of Obamacare, CEO John Schnatter Says." by Harry Bradford got a lot of attention on my facebook feed lately. 

CEO John Schnatter, a vocal opponent to the Affordable Care Act, is getting attention for having to raise his pizza prices $0.15 to $0.20 per order to be able to offer health care to his 16,500 employees.  In an attempt to gain sympathy and upset the American public, he is passing on the cost of his obligation to his employees to his customers.  Such a minimal cost increase makes one wonder why can't that come out of his profit margin.  This article Papa John's Turns in Strong Domestic International Q2 shows sales growth up 5.7%, revenues of $318.6 million, and net income of $14.8 million for just one quarter.  That's right, 3 months, April, May and June (which I'd argue aren't "pizza" months).  With numbers like these, it is outrageous that Mr. Schnatter did not offer affordable health care to his employees before.

To show a "closer to home" perspective, the Huff Post interviews Judy Nichols, a Papa John's franchise owner in Texas.  She claims the mandate under the Affordable Care Act will make her second guess expanding to more franchises.  She has choices: pay the fine, keep her staff under 50 employees, or actually offer affordable health care options to her employees.  The unnamed choice is in the hands of Mr. Schnatter, he could come up with a program that would make it more affordable for his franchise owners to offer health care to their employees.  The truth is, there are many factors that cause this same dilemma for smaller business owners.  The cost of rent, the increase fuel costs, the current drought that is sure to cause an increase in the prices of flour and cheese, the list could go on and on. It is easy to blame health care for these pressures or complain that they add to the pressure.  However, Mr. Schnatter  asked someone to work for him, franchise his brand and increase his profit margins and they have, he now owes them more than just a weekly paycheck.

Mr. Schnatter wants you to be mad at the government, Ms. Nichols implies the same, others encourage you to be mad at members of unions or public employees that have affordable health insurance coverage.  This misdirected outrage has got to stop.  It is time to start getting angry that before the Affordable Care Act, 44 million Americans did not have access the health care. It is outrageous that 16,500 of those Americans belonged to Mr. Schnatter and those 16,500 people who worked for him day in and day out, mostly at minimum wage, weren't worth 20 cents more a pizza. It is outrageous that Mr. Schnatter has the ability to keep his profits the same, raise his prices minutely, and he still wants your sympathy. 

The part that gets me every time is how truly out of touch some people are with the day to day realities for  most Americans.  Mr. Schnatter had a fundraiser on his sprawling Louisville ranch for Mittt Romney, with a minimum $1,000 per person price tag.  Mr. Romney proclaimed,  "Don’t you love this country? What a home this is, what grounds these are, the pool, the golf course." He went on to say that Republicans believe that everyone should live like this and Democrats believe no one should live like this.  The reality is, not everyone can live like that.  It's simply impossible.  It reminds me of President G.W. Bush's reaction to a woman who told him at a town hall meeting that she had three jobs and still couldn't make ends meet.  Completely missing the point, President Bush said that kind of work ethic was an American value and what a great country we live in that people work that hard.

Yes President Bush, we live in a great country, based in a strong work ethic that we should be proud of.
No President Bush, a woman should not have to work three jobs to provide for her family.

Yes Mr. Romney, we love this country and the ability we have to work hard and have a nice standard of living.
No Mr. Romney, not all Americans will be able to have a pool, a golf course, or even own their own home, no matter how hard they work.

Yes Mr. Schnatter, you provide jobs to Americans and we hope you continue to create more.
No Mr. Schnatter, you don't get to have a private golf course while your employees go uninsured. 

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