Papa John’s Price Increase: Obamacare Is To BlameBy: Amanda Crum - August 8, 2012
Obviously, few subjects have been stickier than that of Obamacare, which would require business owners employing 50 or more people to offer affordable health care to those employees or pay a penalty. It’s become a topic of debate between, well, just about everyone, and now, some business owners are coming forward with a new wrench to throw into the machine; higher prices passed on to the customers.
John Schnatter, a.k.a. Papa John, says he’s not in support of Obamacare–he’s been fundraising for Mitt Romney–and that the necessary adjustments Papa John’s will have to make to their business model mean the cost moves on down the line to the consumer. While it’s only estimated to be about an 11-14 cent increase per pizza, every penny adds up, and some franchise owners are concerned that they will be forced to cut jobs to stay within the 50-employee limit.
“I have two options, I can stop offering coverage and pay the $2,000 fine, or I could keep my number of staff under 50 so the mandate doesn’t apply,” Judy Nichols, owner of a Texas franchise, said. “Obamacare is making me think about cutting jobs instead,” she said.
Some think the price increase is so small it probably would have gone unnoticed if not for all the press about it, and Matthew Yglasias, writer for Slate.com, thinks it’s a small price to pay considering what’s at stake.
“Stipulating for a moment that this is true, doesn’t it seem like a rather small price to pay? Papa John’s website is currently offering to deliver me a large pepperoni pizza for $14.08 and Schnatter is warning me that the problem with Obamacare is … a one-time price increase of less than 1 percent! That seems eminently reasonable. What’s more, it’s well within the range of the kind of price swings Papa John’s is going to have to expect just based on the vagaries of the weather, which impacts the price of ingredients, and the ups and downs of the oil market.”
While the law probably won’t affect large, national chains like Papa John’s too much, it may have an adverse affect on smaller businesses, and the National Restaurant Association has warned everyone to expect to see price increases coming soon.