Who Killed the $5 Footlong?
One franchise owner says Seattle’s $15 minimum wage is forcing him to opt out of a popular Subway promotion. It’s time for a fact check.
If there’s one thing minimum-wage opponents love more than cutting worker pay, it’s moving goalposts. My coworker Nick Cassella has written at length about one libertarian blogger’s ever-shrinking attempts to predict doom for Seattle’s $15 minimum wage, but plenty of other pundits have quietly revised their predictions to be less and less frightening once it became apparent that the minimum wage was not going to kill everyone in city limits.
In the last four years, arguments against the minimum wage have gotten smaller and smaller—from “a quarter of all restaurants will close” to “unemployment will rise dramatically” to “grocery store prices will increase dramatically” to “unemployment will rise a lot in a few sectors” to “restaurant prices will increase a little bit.” (For the record, none of those threats came true.)
And now, friends, it’s possible that minimum-wage opponents have finally hit rock bottom with their latest threat:
“You won’t be able to buy a $5 footlong sub at any Subway in Seattle.”
Now that the city has failed to become a restaurant-free hellhole with skyrocketing unemployment, the trickle-down crowd is left with this meager warning for Seattleites. They’re asking you to pit a higher standard of living for all Seattleites against a month-long promotion at a franchise sandwich shop.
A news aggregation feature at The Standard takes just that tack:
…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…In January, one Subway franchise owner [in Seattle] 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.
Holy cow. The $5 footlong is “under siege!” Sounds so serious!
Of course, the piece doesn’t mention that the franchise owner offered a $1-off promotion for several six-inch subs in lieu of the $5 footlong deal. And the piece also doesn’t mention that Subway’s corporate offices demanded that the franchise owner take down his signs:
“I got a very stern call last night letting me know that my life was going to get very ugly if I didn’t take the sign down,” Jones said. “I took the sign down this morning.”
And the piece definitely doesn’t mention that 400 Subway franchise owners from around the country sent letters to Subway’s corporate offices in December complaining about the unsustainable business model of a $5 footlong promotion:
“The national promotional focus over the past five years … has decimated [us] and left many franchisees unprofitable and even insolvent,” wrote Virginia franchiser Mitesh Raval in a Dec. 6 letter to the chain…
So let’s be clear: hundreds of Subway franchise owners have already complained about the unprofitability of the $5 footlong promotion. It stands to reason that many of these owners are from locations that have much smaller minimum wages than Seattle, which was the first major city to vote in a $15 minimum wage. So it seems as though the minimum wage isn’t the problem here, doesn’t it?
Let me just throw out a kooky idea: maybe five dollars isn’t a realistic price for a footlong sandwich in the year 2018. Nobody expects McDonald’s to still sell 15 cent hamburgers and 19 cent cheeseburgers, after all. Subway started selling footlong subs for $5 as a promotional item a decade ago, in 2008. One website’s market-basket analysis says that the price of grocery items in America has increased by 32 percent over roughly the same time period.
I was thinking about all this on Saturday when I was walking around downtown Seattle after the Women’s March. But suddenly, while walking down 3rd Ave between Pike St and Union St, I saw a sign hanging in a Subway window:
Do you see it? Here, let me make it clearer:
Okay, so. I have photographic proof that at least one Subway in Seattle is hosting the $5 footlong promotion for the month of January. That means that at least one franchise owner—working under the same regulatory strictures—is somehow able to provide the promotion to customers.
So this means the trickle-down complainers have made what could quite possibly be the tiniest complaint about the minimum wage in history: at Subway franchises owned by a single businessperson in the Seattle area, it’s not possible to buy a footlong sub for $5, though that same deal is available at other nearby Subway locations owned by different businesspeople. Really, that’s the entirety of their complaint.
Damn you, $15 minimum wage!
