Papa John's CEO Explains Why His Drivers Make Almost $20 An Hour
Schnatter raised the topic of the minimum wage during a video interview last week at Inc.'s GrowCo conference. When asked to discuss the many disruptions to the food industry, from rising commodity prices to increasing public awareness about nutritional issues, Schnatter brought up the seeming non sequitur of what he pays employees.
"Remember, I don't pay anyone minimum wage. The average driver makes way closer to 20 bucks an hour than 10," he said.
What Papa John's pays workers has been a hot topic in the headlines recently. Last year, several of its New York franchisees received subpoenas from New York State Attorney General Eric Schneiderman as part of a larger probe into fast-food restaurants underpaying workers, the New York Post reported in October.
A company spokesman said Thursday that the Papa John's restaurants being probed are all franchised rather than corporate-owned restaurants, and "we can't and don't dictate what franchisees do and how they run their businesses."
He declined to comment further on the New York state probe, but said that "generally speaking," Schnatter's comments about his employees "are all from a corporate perspective."
Schneiderman this month said his office is continuing to crack down on fast-food restaurants in New York. The average city fast-food employee earns $11,000 annually, he wrote in an op-ed for the Huffington Post.
A spokesman for the state Attorney General's office declined to comment Thursday on specifics of Schneiderman's investigation.
Papa John's is also facing a class-action lawsuit from drivers over how it reimbursed them for delivery expenses. The company said it plans to "vigorously defend [itself] against all claims" but warned investors that a "negative outcome in this case could have a material adverse effect," according to a regulatory filing this month.
Schnatter also made headlines two years ago when he weighed in on health-care reform, estimating that instituting "Obamacare" could add as much as 14 cents to the cost of a pizza. He later said he planned to honor the law and would continue to provide health insurance for all employees in company-owned stores.
Last week, Schnatter seemed to be doing some similar public musing over the salaries his company pays workers. "Regardless of what the minimum wage is, you really have the market wage. And if we're not taking care of our people, then we're going to lose good talent, at every level," he told Inc.
"I have a goal to get the average store manager to 75,000 bucks," Schnatter added. "That means half are making 90, half are making 60, 65. So we kind of have a system that produces good earnings for the people that do the heavy lifting at store level, and provides tremendous value and quality to the customer."
Schnatter then pivoted to addressing the question of increasing public scrutiny of the nutritional value of pizza and other quick-service food. First Lady Michelle Obama is championing better nutritional standards, especially in public school lunches, as part of her campaign against childhood obesity.
"We don't promote or advocate people eating a whole pizza," Schnatter said. "Pizza's really nutritious, it's good for you. You can't sit down and eat a whole carton of eggs, and you can't sit down and eat a whole pizza."
For Schnatter's full comments on the minimum wage and nutrition during my interview with him last week, watch the video below.