Subway customers in San Francisco may be disappointed when they get to the counter and find out that the everyday selection of $5 footlong sandwiches has been scrapped, reportedly in response to a recent increase in the minimum wage. A story in local media outlet SF Weekly blamed the ban on $5 footlongs in local stores to the higher cost of doing business.Welcome to economics 101, libs.
According to workers interviewed by SF Weekly, it's because of the local $10.24-per-hour minimum wage. San Francisco has a minimum wage that adjusts annually according to the Consumer Price Index. Business groups regularly decry automatically adjusting minimum wages, but usually don't tie their labor costs as explicitly to the price of their goods.
Subway spokesman Les Winograd said franchisees weren't running afoul of any corporate rules by scrapping the sandwich promotion. "We don't set prices, we recommend prices, so the franchisees do set their own prices," he said. The San Francisco case, he said, was the first instance he'd seen of a market eschewing the national $5 footlong price.
Thursday, March 29, 2012
If you make an employer pay someone more than what the labor is really worth, these things will happen: