Whole Foods CEO Expects Health Care Costs To Rise

Steve Inskeep continues his conversation with Whole Foods CEO John Mackey, who in 2009 denounced President Obama's proposed health care law. Mackey's new book is Conscious Capitalism.

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RENEE MONTAGNE, HOST:

Next, we'll probe some of the contradictions of John Mackey.

STEVE INSKEEP, HOST:

He's a devoted free-market capitalist who says he believes in ideals higher than money.

MONTAGNE: He started with a single health food store and built a national chain, Whole Foods Market.

INSKEEP: He's managed to keep unions out of Whole Foods, where employees are called team members, yet Mackey says companies that have unions should not fight with them so much.

JOHN MACKEY: This type of continued conflict and adversarial relationship is bad. So I think you should try to cooperate with unions if you have unions already. If you don't have them, then if you treat your employees well enough and they're happy and flourishing in the workplace, they may not choose union representation.

INSKEEP: Mackey's views are complex, those as we heard yesterday on this program, he sees no conflicts in them. His new book, "Conscious Capitalism," argues for businesses to pursue a higher purpose than just money, including the care of employees and customers. He says companies will prosper by doing that. But there are some conflicts John Mackey cannot resist. In 2009, he denounced President Obama's proposed health care law, writing an article topped with a quote about socialism.

Do you regret that you weighed in a few years ago on the health care debate and expressed deep skepticism about what became the health care law?

MACKEY: Not at all. I still believe everything I wrote.

INSKEEP: How's it going to affect your business?

MACKEY: Well, it's already affected it some. It's driving up our costs. The thing that we'll find out in the next couple of years is what will be required that we cover. And they're going to add a lot of other things on that we don't necessarily cover right now under our plan that will drive the costs up. Somebody has to pay for it. There's no free lunch.

So if they raise the cost of our being able to insure our team members, then that money has to come from somewhere. It's going to undoubtedly come from the team members themselves. They'll have to go with more part time people or wages will be slowly reduced over time, or they won't grow as fast over time.

INSKEEP: You believe that you're going to end up paying your people a little bit less over time.

MACKEY: Yes. Inevitably, that's going to be the case. This idea that there's this big profit pool that you can somehow or another absorb the cost on is fundamentally inaccurate. It'll have to come out of the labor pool. There is no other pool for it to come out of.

INSKEEP: You expressed concern at one time about socialism. Do you think that this is socialism?

MACKEY: Well, it depends on our definitions, here. Technically speaking, it's more like fascism. Socialism is where that government owns the means of production. In fascism, the government doesn't own the means of production, but they do control it. And that's what's happening with the health care program and with these reforms. So I'd say the system's becoming more fascist, or corporatism.

INSKEEP: Corporatism. Isn't, though, a little like a building code, though? The government sets standards, and companies that want to do business need to meet those standards. Where does that analogy fall short?

MACKEY: It falls short because if the government's going to tell Whole Foods Market exactly what our health care plan has to look like or it doesn't qualify, then we don't really - no longer have an opportunity to customize our plan for our team member's needs. We can no longer be flexible. We're basically just carrying out the government's orders.

INSKEEP: Suppose the president picked up the phone and called you up and said, look, I'm not going to repeal this health care law. It's passed the Supreme Court. I've won reelection. I'm not going to repeal it, but I'm willing to look at changes to it that will make it better. Is there one thing that you would suggest that the president do to take this law that you dislike and make it at least a little better?

MACKEY: Well, that's good question. I would say everything that rolls back the bureaucrats telling you exactly how it must be would be positive. The government shouldn't tell everybody how the insurance must be or how the doctors must treat people. Instead, if the government wants to provide a safety net for our poor people who can't afford insurance to buy insurance, then they should provide that safety net.

I don't object to that. That's fine. It's just these fascist directives that the government's handing down about how it will be and how corporations must do it that I object to. And I think it's going to raise costs, and it's not going to be a good thing on balance.

INSKEEP: What, if anything, dissatisfies you about Whole Foods Market right now? What are you focused on that you really want to change?

MACKEY: I've very concerned about the health decline in America. So the thing I'm most dissatisfied with is that we haven't been as successful in one of our most important missions as we need to be. We can heal America. People got to overcome their food addictions, and they've got to make changes in their diet. That's not easy for people to do.

INSKEEP: It sounds like although you strongly disagree with President Obama's health care prescriptions, you're very much in sympathy with Michelle Obama's health care prescriptions. She keeps talking about healthier eating.

MACKEY: Yes. We're actually working with Michelle Obama. Our Whole Kids Foundation, which we've got now 2,000 salad bars in schools and I think 1,000 garden grants to schools. So we're trying to improve the way children eat, when they don't yet have - their food addictions haven't necessarily set in yet. And we're working with Michelle Obama. I have great admiration for what she's doing there.

INSKEEP: What do you think is making this so hard a problem to solve?

MACKEY: We're dealing with serious food addictions. People in America are addicted to sugar. They're addicted to fat, and they're addicted to salt. And people don't feel satisfied with their food if they're not getting heavy doses of that. So the food addictions are what's holding us back, primarily, and ignorance. But part of that ignorance is deliberate. People don't want to know.

INSKEEP: People don't want to know.

MACKEY: They don't want to know, because it would mean they have to change the way they eat. And most people think that they'll lose all pleasure. Food is intensely pleasurable, and people are afraid that if they change the way they eat, they'll stop having pleasure. It's not true that whatever food that you learn to eat, you begin to enjoy it.

I have more pleasure eating today than I used to when I ate an unhealthy diet. I thought it was going to be involving sacrifice. It's not true, but that's what holds most people back from breaking out of their dietary addictions.

INSKEEP: What word describes your diet now? Are you a vegan?

MACKEY: I am vegan. Vegan, no oil, low salt, no refined foods like white flour, that type of thing.

INSKEEP: But you have no trouble enjoying great-tasting food, finding good restaurants when you want them and that sort of thing.

MACKEY: It's hard to get good food at restaurants because the salt, sugar, fat is everywhere you go. So it's harder when I travel. Fortunately, there are Whole Foods Markets in almost every city I travel in the United States. So I eat at Whole Foods.

(LAUGHTER)

INSKEEP: There you go. Just buy something and munch it right there in the aisle. Well, John Mackey is co-CEO of Whole Foods Market and also co-author of a book, "Conscious Capitalism." Thanks very much.

MACKEY: Thanks. I enjoyed being on your show today.

(SOUNDBITE OF MUSIC)

MONTAGNE: We heard John Mackey say that when travelling, he just eats at one Whole Foods or another. Executives of Krispy Kreme can do the same.

INSKEEP: The company famous for its glazed donuts and coffee makes an announcement today: Krispy Kreme plans to add 160 more storefronts in the United States over the next few years. That's on top of 240 that already exist.

MONTAGNE: Though it's better known for sugar, Krispy Kreme recently expanded its menu to include healthier items like fruit juice, smoothies and oatmeal. And it's aiming to expand its presence around the world, from 500 stores abroad to 900. It just announced this week the first Krispy Kreme franchise in India.

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