Papa John's CEO John Schnatter is a Moral Monster
Papa John's CEO John Schnatter is upset about "Obamacare." It's complicated.
I was listening to Mike Huckabee’s radio show and they were talking about secession. In the wake of the election results, secession appears to be the conservative version of moving to Canada, since that socialist paradise isn’t a particularly good option.
For the record, Mike Huckabee is against secession. He believes what we’re missing in our union is more emphasis on the “God” at the end of “One nation under.” But most of his callers were pro-secession, including a gentleman from Alabama, who had clearly done some thinking on the issue, explaining how once Texas goes, the rest of the southern states would fall like dominos. Huckabee pressed the man, asking him several times what would be different in this new southern union, and the man said something along the lines of “welfare for one thing” as in it would cease to exist. The caller said that when people lose their jobs, they can go to a church or charitable organization for help, rather than the government because he was just plain tired of carrying everyone else on his back.
Around the same time an email correspondent alerted me to the story of Dr. Don Haussler, an adjunct math instructor at Kansas City Kansas Community College (KCKCC).
Dr. Haussler has a degenerative hip condition that necessitates a replacement, but like thousands and thousands of other adjuncts, he has no insurance.
Thankfully, Dr. Haussler has grateful and caring students, Kenneth Herrington and Megan Hyde, who have been organizing fundraising events such as a yard sale and a candy sale in order to generate sufficient funds for Dr. Haussler’s surgery.
Megan Hyde said, “Dr. Haussler is not only a great teacher, tutor and friend but also a great role model to us all. He’s not had the easiest past couple of years and I feel that it is our obligation as a community to help this man who has already helped so many.”
Is this the model the gentleman from Alabama would prefer?
Papa Johns CEO John Schnatter has been much in the news saying that the “Obamacare” health care reforms will cost his company something like $5-8 million dollars annually (against total revenue of $1.2 billion), and he is therefore going to be “forced” to increase the price of his product somewhere around 10-14 cents per pie. (An independent analysis by Forbes puts the number closer to 3.4 – 4.6 cents per pie.)
Papa John Schnatter lives in a 40-thousand square foot home with a 22-car garage. His net worth is estimated to be 250 million dollars.
A Papa John’s delivery driver earns $6-7 per hour, not including tips.
In 1914, Henry Ford announced that he was doubling the wage of his assembly line workers to $5 per day. (About $116.00 in today’s dollars, or the equivalent of 18 hours delivering Papa John’s pizzas.) At the time, Ford was hailed for this “goodwill.” But as we know, Ford was not seeing charity cases, but his future customers who would need money in their pockets to buy his company’s goods. --
Schnatter and Papa Johns are not alone in this battle. Large franchisees of Appleby’s and Denny’s have made similar statements, either saying they’ll have to increase prices, cut back on employees, or increase the number who are part time in order to skirt the regulations.
Their complaints are wholly accurate. The new regulations are indeed a tax on a certain class of business, the kind of business that Papa John’s is in: lots of workers who receive low pay.
If a company has fewer than 25 employees, they actually get subsidies under the law to help them provide insurance for their workers.
But, as blogger Matthew Yglesias states, “If you have over 50 employees, then it’s another matter. If everyone on your payroll already gets group health insurance, you’re in the clear. If they don’t, but they’re all paid enough to buy insurance on the new insurance exchanges without a subsidy, then you’re also in the clear. But if you’re employing low-wage workers who’ll get subsidies for their new insurance plans, then you’re going to get taxed to the tune of $2,000 a worker.”
This choice, as framed by the group, Rebooting America (who organized a Papa John’s “appreciation day”) is between “hurting profits” or “forcing cutbacks.”
Or raising the cost of pizza by about 4 cents.
Or deciding that $5 million out $1.2 billion isn’t too much to provide life-changing healthcare to the people who work for you and collectively make that 40-thousand square foot home possible.
So the choice really seems to be profits or people.
Let me stipulate that John Schnatter is well within his rights to increase his prices or cut back on his labor costs to offset the additional expense of complying with the new healthcare regulations.
Let me also stipulate that John Schnatter, like Henry Ford before him, is a “job creator,” someone who is able to aggregate capital in such a way as to allow for the formation and operation of businesses that employ laborers, and that these people are necessary in a capitalist system. In the crappy delivery pizza industry, it is sound economic planning to treat labor as essentially fungible. All it takes to be a Papa John’s delivery driver is a reasonably clean driving record.
Am I unfair in believing that even as Papa John Schnatter is acting well within his rights and rationally economically, that he and others like him who would cut wages or hours of their already low paid employees, virtually guaranteeing some measure of additional suffering in order to protect their profits, are moral monsters?
Do you know that “Footprints” poem about the man who has God come to him in a dream, and has his life play before his eyes, and during this tableau, he sees two sets of footprints in the sand, but occasionally, particularly during the toughest times, there’s only one set of footprints and the man asks God why he left him during the darkest days, and God says something like, “look pal, when there was one set of footprints, that was me carrying your ass,”?
I get the feeling that if John Schnatter saw God walking beside him, he’d say, “get the hell out of here, bub, I got it covered.” Either that, or when God told him he was being carried, Schnatter wouldn’t believe it. In Schnatter's world, each man is an island.
Maybe you come to believe this is true when you have enough money to buy one for yourself.
It’s pretty easy to demonize rich CEO’s with 40-thousand square foot homes, particularly when they deserve it. God may bless profits, but last I checked, greed remains one of the deadly sins. I guess they don’t make capitalists like they used to in Ford’s day.
But is this all that different from the system’s failure to provide health insurance for Dr. Don Haussler? Are we off the hook because our business is education, rather than pizza, because our budgets are squeezed, because we have no profits to spend? Are adjuncts treated as any less fungible than pizza delivery drivers?
We can be thankful for the good will of Dr. Haussler’s students, even as we acknowledge that his lack of insurance is in the same category of moral failure as John Schnatter’s greed.
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