Papa Johns About Face – Will Be Giving Healthcare To Employees After All

Author: November 25, 2012 1:54 pm


It appears Papa John’s has a new item on the menu: heaping plate of crow. CEO and founder John Schnatter now went on the record on the Huffington Post to defend himself by taking back his position presented earlier to his stockholders where he said:

We’re not supportive of Obamacare, like most businesses in our industry. But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare.

Now, Mr Schnatter is singing another tune, saying:

Papa John’s, like most businesses, is still researching what the Affordable Care Act means to our operations. Regardless of the conclusion of our analysis, we will honor this law, as we do all laws, and continue to offer 100% of Papa John’s corporate employees and workers in company-owned stores health insurance as we have since the company was founded in 1984.


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The Papa Johns’ CEO seems to love claiming to speak for an entire industry, “most businesses” is a popular statement for him. It also appears that Mr. Schnatter has finally remembered the laws of business and capitalism, making this other point in his commentary:

And this way I get to provide health insurance and I’m not at a competitive disadvantage … our competitors are going to have to do the same thing.

Welcome to macroeconomics 101 – the only way to make a fair capitalist system is to provide a level playing field. So long as companies are not required to give health care, there will be unethical ones which won’t. Companies dedicated to shareholder return, which is what a corporation is for in the end, will maximize their return by cutting every bit they can, be that wages, benefits, etc. By every company being required to carry health insurance, it keeps a level playing field while enabling their employees to be healthy. As it is now, they are forced to work while sick, and nothing goes with a pepperoni pineapple like influenza!

This is the same logic behind the minimum wage as well. Without a lower cap of wages, the pressure to maximize shareholder return will force wages down, resulting in a lower standard of living, and restricting consumerism. Without customers, all businesses suffer. While Obamacare is not the ideal solution, being far less efficient than a single payer system, it does level the playing field, making a solid foundation to improve productivity, maximizing shareholder profits.

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