Pizza, Health Care and the Rules of Grown Up Sharing

Child One is playing happily with a toy.

Child Two grabs toy from Child One.

Child One goes to grab it back.

Child One’s parent says, “No, honey, it’s important to share our toys with others. Maybe you can both play with it?”

Sometimes that works out, sometimes it doesn’t. But the parents are trying to teach their children something important.

We’d be hard pressed to find a parent on this planet who didn’t advocate sharing and compromise to children in some form. My latent eldest sibling objections of “I had it FIRST” notwithstanding, I think teaching children to share without teaching them to be martyrs may be the most important lesson we pass on in terms of human race’s survival. Dramatic? It seems so, but I think not.

We want our children to share because sharing is an act of community. Sharing suggests that there’s enough to go around. It’s an act of prosperity as much as an act of kindness. If people feel like there’s enough, then they’re nice to each other. This isn’t a very controversial belief in terms of children, but somewhere between Legos and ledgers, adults seem to lose their way when it comes to the principles and rationales behind sharing.

John Schnatter, CEO and Founder of Papa John’s Pizza, made some statements prior to the presidential elections and also just over a week ago that suggest as much. In an August fundraiser for Governor Mitt Romney, Schnatter warned that the Affordable Healthcare Act, known as Obamacare, would negatively impact the financial operations of franchisees of companies like his by forcing them to provide healthcare to all employees working over thirty hours a week. By alluding to the U.S. Postal Service’s recent loss of over $15 billion dollars in revenue, Schnatter also emphasized that allowing the government to manage health care amounted to an irresponsible mistake. The election hadn’t been over for but a few days when he pushed forward this same argument before a group of college students in his sometimes native state of Florida and warned that consumers would pay up to fifteen cents extra on their pizzas. Papa John’s employees, he said, could also expect to have schedules shifted around so employers could avoid the associated cost of providing healthcare to their employees. It’s important to mention that John Schnatter isn’t the only franchise-based corporation who has expressed concerns over the financial impact of Obamacare. Darden Restaurants, operators of restaurants like the Olive Garden and Seasons 52, and Applebee’s have expressed similar concerns.

Unlike Darden Restaurants and Applebee’s, however, Papa John’s very public comments were the subject of a recent article in Forbes Magazine. Offering an in depth analysis of the financial impact to both the corporation and its franchisees, the most dramatic point in the article rested in the very different numbers concerning the potential increase in price per pizza. Offering healthcare to full time employees will cost Papa John’s Pizza up to $8 million dollars a year. If this cost were to be passed on to consumers, it would cost four to six cents per pizza, not fourteen.

But, wait. There’s more.

According to Forbes, Papa John’s gives away over $20 million dollars in free pizzas for promotional purposes. Anyone in the promotions business will tell you that it’s hard to quantify how much revenue freebie promotions actually bring in, but an interesting point to consider is how effective in marketing these freebies could be when Papa John’s has consistently lagged behind Pizza Hut and Dominoes. So, the question is why, when a company can afford to give away $20 million dollars in pizza, can it not just give away $12 million dollars in pizza instead, keep the price of their pizzas the same, not cut anyone’s hours and buy the insurance for employees who work thirty hours a week so they can visit the doctor when they get a cold?

Schnatter brought up a point and one that a person like me who is married to a spouse with an MBA can understand: as a CEO, it’s his responsibility to make the most money for his shareholders. This word “shareholders” is interesting. I can only speak for myself, but when I hear the word shareholders, I think of people. Most of the people I think of are upper middle class, but they’re people. I assume that they’re hard working, foresighted people who are investing their money for noble purposes like a retirement fund or perhaps a college fund for their kids.

If you’re like me, though, and you see those people when you hear the word shareholder come from John Schnatter’s mouth, you’re completely wrong. Most of Papa John’s shareholders are one of the following: banks, hedge funds and, well, Papa John. So, basically, this idea that he has a responsibility to make the most money he can for his shareholders boils down to the idea that he has a responsibility to make the most money he can for himself and huge financial institutions at the expense of both consumers and the people who work for him.

Is this the spirit of sharing that we so vehemently thrust upon our children? I think not. John Schnatter has $8 million dollars to spare. In fact, based on his doling out of free pizza, he has $20 million to spare. This doesn’t even include the figures that are being spent to open Papa John’s franchises internationally, either. The idea that a financially stable and profitable company would present providing healthcare as a liability but be okay with giving away pizzas to people who drive Camaros is unethical and slightly immoral.

More basically, it goes against that fundamental lesson we strive to teach our children about there being more than enough to go around. I love that this is a nation where a person like John Schnatter can live in a forty-thousand square foot mansion while providing jobs and decent pizza at reasonable prices to all of us. I, however, don’t like that Schnatter thinks so little of American small business and consumers that he assumes that people who work thirty hours a week foisting pizzas into a hot oven or driving around cities delivering the integral parts of pizza nights, slumber parties and football games are somehow not worth a less than a nickel added to our pizza or a few Camaro owning folks driving around pizza-less today.

I understand operating costs. I think profits are a good thing, but the lessons we teach our children about sharing aren’t just Polonius style platitudes. If we tell our children that sharing is important because we think there’s enough to go around, we should mean it.

photo credit: Pink Sherbet Photography

  • Thank you for this! I totally agree. I always think it is interesting that when businesses talk about the burdensome cost of adding supports for employees like healthcare, retirement, etc., the first impulse of the CEO is to cut workers’ salaries and benefits rather than decreasing their inflated CEO salary and bonuses.

    There are plenty of businesses (costco, chipotle, and FedEx to name a few) who have figured out how to be successful AND provide living wages and quality benefits for their employees. Usually it comes down to balance.

  • Look at the rich CEO have a temper tantrum about having to provide actual benefits to his minimum wage employees. It’s a good thing his pizza sucks; it won’t even be a effort for me to patronize my local pizza establishment, one who respects the people that make it work.

    And don’t get me started on Darden…

  • Sybil Law

    Who eats Papa John’s, anyway? Ick.

    • Ha! I was thinking the same thing. I think it shows his true colors that he felt the need to come in front of College students, some who I would assume work in his restaurants, and tell them that “it’s not fair that I have to pay for insurance, so i’m not gonna. Don’t forget to order from Papa Johns!” I’m obviously paraphrasing, but I’m pretty sure that’s how it went. I wholeheartedly agree with the idea of narrowing down the freebie pizzas and focusing on providing your hard-working employees with the insurance that they need. Stop whining, Money Bags.

  • Not fair that he has to pay for health insurance? Do the rest of us get listened to when we say it’s not fair that he gets so many tax breaks?

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