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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: 3, Insightful) by drussell on Saturday January 13 2018, @04:03PM
If one Subway owner wants to whine and act out like a petulant child trying to say that the big bad government made him pay a couple dollars more in wages to his workers, in an extremely expensive city, instead of trying to make his business maximally efficient, I don't have any sympathy for him.
Busy Subway franchises are generally quite the cash cow for the owner. There are no less than SEVEN Subway sandwich shops within walking distance of my house. SEVEN! And that's not counting the OTHER sub shops, like Mr. Sub and Quiznos, the Vietnamese sub shops, etc. And, no, this isn't downtown, or anything!
If dude is actually having business problems with his Subway franchise, perhaps his location(s) are poorly chosen, or in over-Subway-saturated areas. Removing a $5 promotion isn't likely to drive sales. Acting out like this is rarely productive and is more likely to produce a backlash from potential customers than sympathy from your average Joe.
It is also the complete opposite to what was found about 6 months ago in a Seattle economic report (June I believe) which showed that the minimum wage boost had actually significantly increased sales and revenue in several different sectors and, specifically, restaurants were saying that they were so much busier they were having difficulty finding staff!
Why were they so much busier? Seemingly, at least in part because some of those people at the bottom of the totem pole, like their own employees, actually had enough money to be able to spend some of it on things like goods from stores or food from restaurants.