As far as lunch deals go, Subway’s $5 footlong sandwich has been a hit with consumers. The company sees the promotion as a way to revive interest in its restaurants, which have struggled to attract diners in the last few years. In January, Subway brought the deal back for a limited time and now charges $4.99 for 12 inches of five sandwiches: black forest ham, meatball marinara, spicy Italian, cold cut combo, and something called “Veggie Delite.”
Now, though, the Subway $5 footlong is under siege in cities that have imposed high minimum wages. It is becoming a valuable lesson in economics that some cities are refusing to learn.
Seattle’s minimum wage rose to $15 an hour on January 1, the same day the city launched a punitive new tax on soda. Yet somehow city leaders believe that none of these mandates is causing any harm to businesses and their deal-seeking customers.
In January, one Subway franchise owner there posted signs at his two restaurants explaining why they wouldn’t be participating in the sandwich promotion: “The cost of doing business in the City of Seattle is very high. We are balancing the Highest Minimum Wage in the Nation, Paid Sick Leave, ACA, Secure Scheduling, Soda Tax and much more,” according to radio station KTTH-AM.
It’s not just sandwich deals that are being sliced: A June 2017 study by University of Washington public policy professors found that earlier hikes in Seattle’s minimum wage “lowered low-wage employees’ earnings by an average of $125 per month in 2016” because employers had to slash workers’ hours to afford the new ordinance. It led to a loss of an estimated 10,000 jobs.
Next time you hear a politician prattle on about helping the poor by raising the minimum wage, consider the effects on sandwiches and other cheap food. If we can’t get government off our backs, let’s at least keep them out of our fast-food joints.
