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You probably remember Subway's famous "five-dollar footlong" promotion as much for the obnoxiously catchy jingle as for the sandwiches themselves. (Sorry for getting that stuck in your head all day.)
The sandwich chain recently resurrected the promotion in a national advertising campaign promising foot-long subs for just $4.99—but the special deal won't fly at one Subway restaurant in Seattle, where owner David Jones posted a sign this week giving customers the bad news.
Sadly, the consequences of high minimum wages, excessive taxation, and mandate-happy public policy are not limited to the death of cheap sandwiches. The cost of doing business in Seattle is higher than the Space Needle, and the unintended consequences of those policies are piling up too.
The biggest cost driver, as Jones' sign mentions, is Seattle's highest-in-the-nation minimum wage. It went from $9.47 to $11 per hour in 2015, then to $13 per hour in 2016, with a further increase to $15 per hour planned.
The result? According to researchers at the University of Washington's School of Public Policy and Governance, the number of hours worked in low-wage jobs has declined by around 9 percent since the start of 2016 "while hourly wages in such jobs increased by around 3 percent." The net outcome: In 2016, the "higher" minimum wage actually lowered low-wage workers' earnings by an average of $125 a month.
And now those same employees will have to pay more for sandwiches from Subway—and everything else too.
(Score: 5, Insightful) by sjames on Saturday January 13 2018, @11:55AM (5 children)
Let's say that we don't increase minimum wage, BUT we also decide that we are not going to subsidize low paying employers through welfare, food stamps, etc. How many $5 footlongs do you suppose a Subway can sell in Seattle if it is staffed with hepatitis infected homeless people who haven't showered in 6 months?
So, what ever would they do? Sell $5.50 subs so their employees could afford to not stink and not have hepatitis, naturally.
The minimum wage is society's way of not letting employers sponge off of our social safety net (such as it is) while also not letting people starve in the streets.
(Score: 0, Disagree) by Anonymous Coward on Saturday January 13 2018, @01:18PM (4 children)
They cut my wife's hours from 30 hrs/week to 12 hrs/week due to the minimum wage increase. Better yet... When Obamacare started years ago, they ceased all employee medical coverage benefits nationwide. Thanks Ofucker.
(Score: 5, Insightful) by drussell on Saturday January 13 2018, @04:25PM (2 children)
They may say it was due to the minimum wage increase, but that just doesn't make sense.
Unless your wife was making about $6 an hour before, cutting her hours from 30 to 12 to make up the wage differences just doesn't doesn't add up. They're just using it as an excuse to downsize their workforce.
(Score: 0, Disagree) by Anonymous Coward on Saturday January 13 2018, @08:18PM (1 child)
You are assuming some motives that just aren't there. It's not "I really want to screw her over, but I have no excuse... oh, now I have an excuse!" with somebody trying to run a business.
No excuse is needed, but it is always there: The business is not a charity and has no desire to pay anything to anybody.
They would have cut her hours before, but it didn't make financial sense. She was earning her keep. Now they run the numbers, and it appears that they'd be better off with fewer of her hours. It isn't personal.
The effects of cutting hours are complicated. Obviously, less is paid to the employee. Revenue will decrease because less work gets done. Material costs go down because less work gets done.
You can't tell if it adds up unless you know lots of details about demand curves for that business. Unless the management is incompetent though, we know that somehow it does add up.
(Score: 1, Touché) by Anonymous Coward on Sunday January 14 2018, @03:02AM
They're just throwing a tantrum right now.
After the ACA passed, they stopped offering anybody more than 29.5 hours. Now all I hear is "why are our employees so crappy?!" "Why is the competition eating our lunch on quality?!" "Why are we losing customers?!" "Waaah! Waaah!"
These people would shutter profitable businesses out of sheer spite. They already have enough to live the rest of their life in comfort.
Don't give me any "but but but trying to run business rational holy owner would never blablabla." You don't know enough small business owners if you think that.
(Score: 2) by sjames on Sunday January 14 2018, @07:21PM
Funny though, they seem to have cut her hours by far more than enough to compensate for the higher hourly rate. They also seem to have cut out health benefits in spite of them costing no more under ACA than before IF they actually were providing a benefit.
Would you be happier if they cut your wife's pay to $4/hr and gave her 60 hours a week with no benefits?