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posted by Fnord666 on Saturday January 13 2018, @04:58AM   Printer-friendly
from the warning-earworm-ahead dept.

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.


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  • (Score: 1, Insightful) by Anonymous Coward on Saturday January 13 2018, @12:16PM (7 children)

    by Anonymous Coward on Saturday January 13 2018, @12:16PM (#621769)

    So let me get my math straight: An hour's work at minimum wage in Subway was just over enough to buy two footlong sandwiches sold at subway and prepared by said employee. Three sandwiches, after the minimum wage increase.

    Am I the only one who thinks this is either an absurdly expensive sandwich or a disgustingly low wage? How many customers are served and how many such sandwiches does an employee make in an hour? 50? 100? How much value does such an employee produce to deserve such a wage? The ratio of value produced and wages received must be seriously distorted.

    No matter which way a I look at it, there must be something seriously wrong with your economy if it allows such one-sided exploitation of labor by employers to occur. Why would anyone even choose to go to work at all at those wages? I'd expect the supply of labor to approach 0 at that price.

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  • (Score: 3, Informative) by Anonymous Coward on Saturday January 13 2018, @01:33PM

    by Anonymous Coward on Saturday January 13 2018, @01:33PM (#621784)

    > Why would anyone even choose to go to work at all at those wages?

    No one chooses to. Well, maybe an occasional teenager working part-time. Other employees are working there because if they don't they'll starve. This way they're just sick and hungry. Improvement!

  • (Score: 2, Insightful) by Anonymous Coward on Saturday January 13 2018, @02:11PM (2 children)

    by Anonymous Coward on Saturday January 13 2018, @02:11PM (#621792)

    So let me get my math straight: An hour's work at minimum wage in Subway was just over enough to buy two footlong sandwiches sold at subway and prepared by said employee.

    You've never run a business have you? Deduct sales taxes and divide by 3 (profit, cost, wages) and you're left with around $1.50. Every Subway I've been in has a sandwich maker (usually more than one) and a clerk to take the cash. That $22 wage bill requires 18 footlongs to be sold an hour, every hour. A footlong every 3 minutes and would you like it toasted? With a wage of $11 an hour, you get that volume of sales or you close the business. They're not getting that sales volume all day are they?

    • (Score: 1, Insightful) by Anonymous Coward on Sunday January 14 2018, @03:40AM

      by Anonymous Coward on Sunday January 14 2018, @03:40AM (#622074)

      Ok well pretend that they dedicate a third to wages. That's $1.67. For 22 hours of wages you only need to actually sell 13.2 sandwiches. This also doesn't include the high profit items of fountain soda and cookies. Which cost cents per oz and are sold for dollars. But we'll continue with the example as stated and pretend no one wants to wash down their stale bread with anything. The only have to sell one every 4.5 minutes. Add back in the Soda, cookies, and even the low cost subs like the vegie and your probably only having to make a sandwich every ten minutes to stay profitable.

      Lets do another thought exercise. Lets raise those employees wages to 15 an hour.
      Now you have to make enough sandwiches to cover $30 dollars of wages. At that rate you need to make 18 foot longs an hour. Surprise. Thats the number you came up when you rounded. Wait whats that, the $4 an hour was a FUCKING ROUNDING ERROR. Just give them the $15 dollar wage. Your own math proved it is nothing but a rounding error.

      I cant find good stats on it but from what I could find an average subway sells 400-500 subs a day. Say they are open for 12 hours, two employees working the entire time (although early and late its often only one) You are talking $264 in wages if they get paid $11 an hour. And $360 if they are getting paid $15. For a total difference of $96. If you split that up among 400 sandwiches you only need to raise the cost of your sandwich $0.24 a piece. Shit that is passing THE ENTIRE COST to the customer, and its so little THEY WONT EVEN FUCKING NOTICE.

      Quit being a pinch penny, raise the cost of the sandwich 0.25 and give your employees enough money to live off of. Hell you even get to pretend to be the fucking good guy, and you haven't cut profit one single cent!

    • (Score: 0) by Anonymous Coward on Monday January 15 2018, @06:07PM

      by Anonymous Coward on Monday January 15 2018, @06:07PM (#622649)

      That $22 wage bill requires 18 footlongs to be sold an hour, every hour.

      This argument is wrong on the face of it, because subway sells more than just sandwiches. Some of those items have much higher margins.

      If people buy pop or coffee with their sandwich then the required sales volume goes down significantly.

  • (Score: 3, Insightful) by chromas on Saturday January 13 2018, @02:48PM

    by chromas (34) Subscriber Badge on Saturday January 13 2018, @02:48PM (#621807) Journal

    The ratio of value produced and wages received must be seriously distorted.

    You're forgetting the materials cost. Those pale, flavorless tomatoes aren't free, ya know. Plus you've got utilities, property tax, non-customer-facing staff and other infrastructure whose costs are diffused into the price of all them sammiches.

    Why would anyone even choose to go to work at all at those wages?

    Bills.

  • (Score: 2) by drussell on Saturday January 13 2018, @04:52PM

    by drussell (2678) on Saturday January 13 2018, @04:52PM (#621848) Journal

    Am I the only one who thinks this is either an absurdly expensive sandwich or a disgustingly low wage?

    Indeed... It is both.

    The least expensive foot-long at most of the Subways here (when there isn't a $5 deal, coupon, or other promotion) is $7.74 plus tax. Absolutely, that's very expensive sandwich for just some cold cuts with some veggies on it. You're paying for all the overhead of it coming from a dedicated sandwich shop, the labor for it to be made to order in front of you in a (hopefully) reasonable time frame, etc. :)

    How many customers are served and how many such sandwiches does an employee make in an hour? 50? 100? How much value does such an employee produce to deserve such a wage? The ratio of value produced and wages received must be seriously distorted.

    The "sandwich artists" each probably do about 45 sandwiches per hour during a busy lunch rush, yeah. Many of the busy Subways I've been to during a rush will have one or two employees just taking the initial order and grabbing the bread choice, then 4, 5, 6 "sandwich artists" going full tilt with one cashier and at least another worker or two replenishing supplies, etc.

    No matter which way a I look at it, there must be something seriously wrong with your economy if it allows such one-sided exploitation of labor by employers to occur.

    Indeed.

    Why would anyone even choose to go to work at all at those wages?

    Out of sheer desperation.

    I'd expect the supply of labor to approach 0 at that price.

    See desperation above.

  • (Score: 2) by sjames on Sunday January 14 2018, @07:26PM

    by sjames (2882) on Sunday January 14 2018, @07:26PM (#622242) Journal

    They would never choose to if not bent over a barrel by a combination of needing income to live and nobody making a better offer since unemployment is perpetually a positive number.

    If we had a Basic Income, the situation would change overnight, which is why conservatives would rather die (or more likely, see everyone else die) than see such a thing implemented.