Papa John's Founder Warns That Obamacare Will Lead to Imperceptably Small Increase in Pizza Prices

A blog about business and economics.
Aug. 7 2012 3:25 PM

Papa John's Founder Warns That Obamacare Will Lead to Imperceptably Small Increase in Pizza Prices

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Papa John's founder John Schnatter at the 2011 American Music Awards

Photo by Jason Merritt/Getty Images.

As a New Yorker born and raised, I can't officially approve of national chain pizzas. But if you must order one, Papa John's is clearly the best. And the chain's CEO, John Schnatter, is not only raising money for Mitt Romney, he's warning that Obamacare will cause your pizza-eating experience to suffer:

On a conference call last week, CEO and founder John Schnatter (a Mitt Romney supporter and fundraiser) said the health care law's changes — set to go into effect in 2014 — will result in higher costs for the company — which they vowed to pass onto consumers.

"Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis," Schnatter said.
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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. There's just nothing there. I can believe that the Obamacare provision requiring prominent calorie labeling on menus would hurt Papa John's by encouraging people to order smaller pizzas or fewer toppings, but the idea that they're getting hammered by a one-time 14 cent per-pie increase in labor costs is silly. Now Schnatter personally stands to lose money as a result of the progressive tax increases that will help pay for the law. He's probably mad about that, but he shouldn't attribute his personal problems to his business.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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