Papa Johns and the Insurance Dilemma
(EDIT RIGHT UP FRONT: Within minutes of posting this, Andrew Ducker pointed out that what John said was actually riotously misquoted by the media in a ridiculous game of telephone. His actual statements are much more defensible, as he’s not enacting the consequences, but rather pointing out what his franchisees – who he has limited control over – are likely to do. It’s still an attempt to interject himself into the political scene, but he’s not the one threatening to swing the hammer. That said, I wrote a whole essay here and I’m not going to delete it, in the hopes that other people might be enlightened instead of passing along misinformation as I did.
(…but I had a link and everything! Bleah.)
So the CEO and founder of Papa Johns has said that he’s going to have to cut people’s hours to account for the rise of costs in the wake of Obamacare. And I’m of several minds about this.
You’ve got a lot of people saying, “Oh, you say you’d have to raise costs by fifteen cents a pizza to keep your employees insurance? Shut up and take my quarter.” But having to raise prices on pizza, which seems to me to be a pretty interchangeable thing, probably is damaging to their business. And the new laws of having to provide insurance to employees at locations with fifty or more employees probably hits their bottom line more than they’d like. Unlike many liberals, who view the costs as trivial, I see it as a significant expense in a business that probably doesn’t have a ton of margin.
I’m actually sympathetic. You’re in a tough market, here’s some added expenses that’s going to make it harder for you to stay afloat. One of the problems that liberals have is that they often think that businesses are magic money-making machines: shut up and suck up the taxes and the extra costs and the expenses of paying the regulations, you whiner. You’ll be all right. Because if you own a business, then you just have the money automagically. It’s not like people ever go out of business because they can’t afford to keep up with expenses.
Even if it’s a multi-million dollar corporation, you can still go under. And you still have to answer to stockholders, who are effectively psychotic robbers who only care if you made more money this quarter. You’re kind of held hostage by Wall Street.
Still. I’m sure other expenses have created places where Papa Johns would lose money, and John Schnatter didn’t make public speeches about them. So what’s he doing? Basically, campaigning against Obamacare. He says it’s not political; bullshit. He’s calling out Obamacare to say, “If we lay you off, blame Obama.”
Which is fine. It’s his business. If he wants to go that route to save on expenses, so he shall. But in doing so, what he’s telling the entire world is, “I would rather these people suffer than we lose fifteen cents on a pizza. Or, you know, we come in a little lower on profits for the quarter.” And that’s the cold businessman speaking, the kind of guy who says, “Okay, well, your kids’ teeth are rotting because all you can afford is Ramen, but I couldn’t let my profit margin dip a tenth of a point!”
And at that point, it becomes battling PR. Yeah, you’ve got a right to complain. You’ve got a right to reallocate resources as you see fit to keep your business alive. But you’ve also got a right for people to look at you as some serpentine-blooded sonuvabitch, the kind of guy who actually goes, “Can you believe that you’d have to pay fifteen cents extra to keep a guy’s family insured? Christ, what a pain.”
So yeah. You can do it, buddy. But it makes you look like a callous douche. Which a lot of businessmen are, but don’t be surprised when there’s pushback on that logic.