Minimum Wage Hike Driving Up Food Prices In San Francisco

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“A rising tide lifts all ships” is the saying often tossed out by those who support increases in the minimum wage. The idea is that is if you raise the floor on wages it will make everyone more prosperous.

What this analysis misses is that rising wages means more overhead for businesses which, in turn, means higher prices. That’s what has happened in San Francisco where a minimum wage of $10.24/hour has made it impossible for Subway to continue offering their famous “$5 footlong” deal:

The catchy Subway sandwich shop jingle involving a variety of foot-long sandwiches available for $5 doesn’t apply in San Francisco. Apparently, the city’s new minimum wage, raised to $10.24 as of January 1, make $5 footlongs an impossible business model.

This promotion has been a roaring success for Subway, credited with billions in additional sales.

The government can’t any more create prosperity by mandating higher wages then we could stop the tide from coming in by passing a law.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • http://nofreelunch.areavoices.com/ Kevin Flanagan

    $10.24/hr. can’t provide a very nice lifestyle; why don’t these cheapskates mandate a $1000/hr. wage?

    • ellinas1

      Because you are being unreasonable.

      • http://nofreelunch.areavoices.com/ Kevin Flanagan

        At what point does that occur and who gets to decide where the point is?

        • ellinas1

          It occurs within reason, and those vested with the authority decide where the point is.

          • http://nofreelunch.areavoices.com/ Kevin Flanagan

            Which criteria do they utilize? Whose “reason” do they rely on?

          • ellinas1

            They utilize the community’s criteria.
            They rely on reasonable community standards of decency.

          • http://nofreelunch.areavoices.com/ Kevin Flanagan

            “Community” is code for Communism. How has that worked out?

          • ellinas1

            Maybe to you community is code for communism, but for the people that think differently, community is their neighborhood, village, town, city, state and  even country.

  • Spartacus

    The governing geniuses in San Francisco will just pass an ordinance forcing Subway to sell their foot long subs for $5 within city limits.

    • Sparkie Arbuckle

      Do you mean tofu, hippie fat hoagies?

      • Spartacus

         Are they butchering hippies in S.F. for their fat now? It’s about time they culled the herd.

        • Sparkie Arbuckle

          Starbucks fed, free range hippies.

  • Sparkie Arbuckle

    Totally unrelated to gas prices, eh?

    • igx

      Please tell us about the benefits of the minimum wage. 

      • Sparkie Arbuckle

        Please tell us about the causal relationship between gas prices and food prices.

        • igx

          Food costs are correlated with energy prices. Energy costs are effectively a regressive tax all the way around. #drillbabydrill

        • donwalk

          Do you mean the high fuel prices that was caused by President Bush
          OR
          the high fuel prices that B.O. has nothing to do with?

          You seem lost, so
          Fuel pricing goes up, then transportation costs go up.
          Products, supplies and materials get shipped to the retail outlet which requires transportation.
          Now stay with me, please?
          Fuel pricing goes up, then tramsportation costs go up.
          Got it? 

          Either way, increased operating costs are the end results of Liberal Democrats and their redistribution policies.

          • Econwarrior

            The difference is that President Bush brought the fuel prices way down, and then obama jacked them back up, and won’t do the obvious thing to unseat his OPEC pals so we can get reasonable fuel prices.

        • Econwarrior

          Not to mention how much obama’s ethanol boondoggle is raising food prices.

  • mickey_moussaoui

    I noticed MickyD’s no longer has the dollar menu. Now it is $1.25. Is it inflation or minimum wage, or both?

    Or has Michelle Obama eaten all the fries and the supply is low?

  • Tim Heise

    Unemployment for young adults will go up more now.

  • Haveyoumetted

    Unexpectedly!

  • ellinas1

    Oh, my God! What a loss. No foot long Subway samiches in Frisco.
    I am devastated. 

    • http://nofreelunch.areavoices.com/ Kevin Flanagan

      Such homophobia!

      • ellinas1

        Are you afraid to go to Frisco?

        • http://nofreelunch.areavoices.com/ Kevin Flanagan

          I’ve been there. The sourdough bread and seafood are great, but make sure your car brakes are in good working order.

          • ellinas1

            Got that right.
            The hills will wear out your brakes quick.

  • awfulorv

    San Francisco may once have been a wonderful city to live in. Between 1906-1915 the city completely rebuilt itself. They built roads, transportation systems, water systems, means of communication, office buildings, and thousands of wonderful, stylish, Victorians, without most of the work saving tools contractors, today, enjoy. Skilled workman from many European countries rushed in and created The City, as it’s still called by some.  There were, perhaps, twenty different areas within it’s boundaries, with their own restaurants, bars, traditions, amateur sports teams, etc. If you tried, you couldn’t envision a more harmonious, unique, clean, friendly, city.  Then the war came, and with it the workers needed to built the ships, and other wartime material.  That city that Tony sang about is no more.  Now it’s just one big relic of times past, with overpriced junk, from China, being sold as souvenirs, restaurants pretending to be special, curvy streets, whores, drugs, smelly Hippies in the parks, and seals at Pier 39.  All tied up in a Lavender bow, and proclaiming that we know best.  And yet the tourists come, then sheepishly leave, knowing they’re been thoroughly fleeced. Then the lying, to their friends back home begins, and the “oh we had a wonderful trip, Fisherman’s Wharf  was so interesting, the Cable cars are quaint, the hills, and the bridge, oh the bridge”. And so the subliminal selling to the suckers begins, again, till nearly everyone feels they must visit, at least once in their lifetime. They’re not told of the assaults, the robberies, the car thefts, the scowling gangsta’s, the pimps, the hugely overpriced hotels, and food, the cockroaches, the rats, and the penetrating cold. But from these ” know it all’s”, and their brethren around the bay, have come most of the crack pot, spendthrift ideas, and policies, that have cost this country so dearly, these past four-five generations. And, notice, they’re still spending, with the 200%  overrun on the bridge retrofit, and High Speed Rail to La La Land.   The Forty Niners, Bill Walsh, Joe Montana, during their glory years, are the only reason I will, fondly, remember this ultra phony city. 

    • Sparkie Arbuckle

      There’s so much money there that you conservatives must credit them with doing something right.  I mean, they are footing your redstate welfare bills.

  • sbark

    The unintended consequenses of any and all Left wing uninformed  meddling in everyones lives…….

    The minimum wage act———-should be named the black youth unemployment act

    Could it well be that…….if not for the minimum wage Trayvon Martin would’ve had a job and would be alive today?   Instead he was forced out of the job market by Dem’cat policies, he ended out in the “street Life allegedly stealing jewelry

    We know for sure that the Dem’cat War on Poverty has ruined millions of lives for generations via a lifetime of dependency, welfare, crime in the Ghetto’s

    “I’ll have those niggers voting Democratic for the next 200 years”
    Lyndon B. Johnson

    but hey…….dem’cats care for the poor………they just care from far away and removed from them.

  • Sparkie Arbuckle

    Red states bashing on the people who pay their welfare tab for enacting whatever local laws they want.

    Stay classy, rent-seekin’ bleeders.

  • igx

    A lot of lefites think raising the minimum wage mitigates food stamp usage and unemployment  payouts. 

    • Sparkie Arbuckle

      A lot of righties think they aren’t on the dole, but any search will lay bare who is on food stamps, who is on public assistance, etc.

      By and large it is the red states.

      I am reminded of other hypocrisies.

      Of course you guys are against welfare payouts, drug abuse, growing the federal government, letting Tories and loyalists into the federal admin, homosexuality, pornography, subsidies for the energy industry, spending without paying, etc etc etc.

      This sort of laughable hypocrisy tends to happen when one allows a little to much emotion and a few too many ‘thick descriptors’ (e.g. baboozler) into the discussion.

      But hey, why pretend this is about politics when it’s really about a bunch of clowns who like to watch racists toe head news anchors preach about the apocalypse?

      • igx

        Minimum wage laws just mess up business models causing everyone’s prosperity to go down. 

  • Hannitized, Proofs obsession

    Customers can still buy the sub of the month for $5, according to an employee at Subway on Market and Castro streets.

    So I guess it’s not impossible after-all.

    The good news is people are better off for losing some access to extra cheap food, the bad news is conservatives lose their argument that paying high minimum wage costs jobs.

    • donwalk

      Given time, it will either disappear or incur a price increase also.
      Under your hypothesis, what was the purpose or reasoning of limiting the minimum wage to $10.24  per hour?
      Since (in your opinion) higher wages do not cost jobs or increase operating costs, why not give everyone $25.00 per hour (or higher) and solve all of our economic problems by making everyone middle class?
      AFter all, in your opinion no jobs would be lost at all.

      • Hannitized, Proofs obsession

        Don’t be an idiot.  Subway can only produce so many sandwiches per day.  You can easily measure a profit loss calculation based on maximum profits associated to maximum sales.  You can’t put endless amounts of people to increase sales that don’t exist so you have a limit what you can pay your employees before your profit loss ratio is compromised.

        Subway is a fine example of an establishment paying their employees beyond the minimum wage average, mostly because the owners also work the front lines.

        • donwalk

          I enjoy pointing out the inaccuracy in the stories posted by political hacks as well as countering their simple minded platitudes with fact and supporting evidence

          What you just replied with contradicts what you posted earlier.
          ” the bad news is conservatives lose their argument that paying high minimum wage costs jobs”.
          Now, try answering the question posed to you:
          What was the purpose or reasoning of limiting the minimum wage to $10.24 per hour? What is the criteria for establishing the level of the minimum wage, since every area is different?
          No, Subway could produce as many sandwiches as humanly possible, they would be limited on how many they sell based upon the pricing and the market.
          If it has been costing you 8.00 per hour for an employee and that employee makes 100 (for easy computing) sandwiches per 8hr day then the employee labor cost is roughly 64.00 per day (excluding taxes, etc). That equates to roughly .64 per sandwich in employee labor costs only. verses
          It now costs you 10.24 per hour for an employee and that employee still makes 100 sandwiches per 8hr day then the employee labor cost increases to roughly 81.92 per day (excluding taxes, etc). That equates to roughly .82 per sandwich in employee labor costs only.
          That is an increase of 18.00 per day in labor costs. Who pays that additional cost? 1. The Consumer?
          2. The Small Business Owner?
          3. The Government who caused it?

          If the consumer pays it, then the minimum wage did nobody any good because the cost of livng just went up.
          If the small business owner pays it or eats it (no pun intended) then he just gave up 6,570.00 out of his own pocket. He will either have to reduce his staffing or cut the wage scales of those above the minimum wage.

          Increased costs in any business model results in either higher pricing to the consumer, reduced wage scales to those above the minimum wage level, reduced income to the business owner (as well as higher risks in remaining successful) and/or reduced (lay-offs) staffing levels. There is no other way to look at it and there are no other choices.

          Don’t be an idiot!

          Oh, and please provide the source of how San Francisco came to the conclusion that 10.24 was ok and minimal enough for Subway’s acceptance and approval. Subway still has a limit as to what they can pay without making any of the above modifications. Their first choice was to eliminate one food item, they will be faced with additional decisoin in the near future. Everytime minimum wage scales get increased, franchisees (not just Subway) start looking for buyers and they start looking for something else for themselves.

          Subject: [ndsayanything] Re: Minimum Wage Hike Driving Up Food Prices In San Francisco

  • http://www.nitrotek.co.uk/gifts-ideas-for-men-boys-aged-14-16.php gift ideas for men

    Meals expenditures are associated with power costs. Energy expenditures are successfully a regressive tax all the way around.

  • http://www.AmericanFranchiseDream.com/franchise-list/ franchise list

    Oh is it true? If yes , that offers will continue then I definitely going San Fransisco and eat it regularly. really unexpected.

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