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calendar   Thursday - March 29, 2012

Ok, Who Let The Fox Reporter In AT NBC?

Hard to believe this article came from NBC. It’s not the story itself that matters, just the editorial take at the end.

NO $5 Footlongs in San Fran

The catchy Subway sandwich shop jingle involving a variety of foot-long sandwiches available for $5 doesn’t apply in San Francisco.

The sandwich-making chain stopped selling the five-dollar footlongs in San Francisco due to the “high cost of doing business,” according to SF Weekly.

Oh noes!!

Apparently, the city’s new minimum wage, raised to $10.24 as of Jan. 1, make $5 footlongs an impossible business model.

Unless you want tuna fish, which is the sub of the month. Yum.

My goodness, that’s very nearly a Conservative thing to say! Imagine that, having to pay the proles San Fran’s “living wage minimum” cuts the margins too closely.

We’ve got a Subway in our town too. When they have the $5 deal running, they have steady customers from late morning to mid afternoon. When it isn’t running, business isn’t so good, even though the $5 deal only saves you a dollar or two off their better sandwiches.

Calls to Subway’s corporate headquarters have not yet been returned. 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.

So there you have it. I don’t know how large the Subway shops in San Francisco are, but the one in my town never seems to have more than 3 people working at any given time. 3 people times an additional ($10.24 - $9.92 = $0.32) 32 cents comes out to less than one dollar per hour. That seems an awfully small amount, but when the margins are microscopic, a dollar an hour could mean the difference between just getting by and losing your shirt.


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Posted by Drew458   United States  on 03/29/2012 at 01:01 PM   
Filed Under: • Big BusinessEconomics •  
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