San Francisco Subways Say “We Can’t Afford To Sell Footlongs.”

You have probably seen the ads for the Subway chain of food and sandwich stores advertising “any footlong sub for $5.”

If you like Subway and like their food, it is a great deal. If you don’t like Subway, it still is a good deal anytime you don’t feel like cooking or something like that.

However, Subway stores in San Francisco are no longer selling footlong subs for a five dollars.

The reason?

They cannot afford to.

In most cases, a store will put something on sale to drive traffic into the location. The theory is that a company will make less per sale item sold, but because the store is selling more, the overall profit is good.

Unless you have a store in San Francisco, where the voters passed a law raising the minimum wage yearly to reflect changes in the Consumer Price Index. The result is the minimum wage in San Francisco is now a whopping $10.24 per hour.

When you pile the increased wages on top of the heavy regulations and fees San Francisco pounds businesses with, stores cannot make a profit selling $5.00 subs.

But half a dozen San Francisco Subway workers said this recent move was explained to them as a reaction to San Francisco’s minimum wage ordinance. Per the will of the voters, minimum wage is calculated each year based on the “August-to-August change in the Consumer Price Index.” On Jan. 1 of this year, it jumped from $9.92 to $10.24, apparently pushing Subway execs to revoke our county’s cheap sandwich privileges. As the minimum wage rises higher, perhaps Subway will be forced to scrap Jared Fogle for parts.

Again and again, Subway workers cited the city’s minimum wage as the driving factor in this decision. That said, this is an expensive place to do business in general.

“The rent, the food — the owner says it’s everything,” said one. “Business costs are high,” said another. “Minimum wage went up so we can’t afford to give the $5 footlongs anymore.”

Advocates of raising the minimum wage always try to tell people that the increase has no effect on unemployment rates or the cost of living.

Tell that to the people of San Francisco, who now have to drive miles out of the city to get a $5 sub.

One Response to “San Francisco Subways Say “We Can’t Afford To Sell Footlongs.””

  1. […] Raised On Hoecakes points out the unintended consequences of the Minimum Wage […]

  2. DCE says:

    Ah, yes, the Law of Unintended Consequences strikes again. That happens a lot in California lately.

    Here in NH we saw the effects of the increased minimum wage a few years ago as businesses weren’t able to hire as many teens for summer jobs as they might have liked because the business income didn’t increase likewise. Whenever the minimum wage is increased teen unemployment goes up. You’d think the geniuses who keep doing this would see that, but they have those ideological blinders on and nothing will make them take ’em off.