Another Sad Watershed In Fast Food Pricing – OpEd

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We might define our time in economic history by the prices of various fast food items. When I was growing up, $5 could get you a feast at McDonald’s or any similar establishment—deluxe burger, fries, soda, maybe an apple pie or some fried chicken bits. I saw $5 as the upper limit of what was needed to go crazy at one of these venues.

At some point in my 20s, I noticed that this had shifted dramatically. The meal deals had broken through the $5 mark. Eventually, $10 was closer to what was needed to truly pig out. What’s more, the lack of price stability has likely added to the confusion wherein customers can’t quickly determine whether the Value Meals are a value at all.

The main culprits behind this were, of course, governmental: Primarily, we could blame inflation. The Fed created the Nasdaq bubble, the housing bubble, and the rising cost of Kentucky Fried Chicken. Regulation, taxes, and other state impositions have increased the cost of doing business as well.

Much of the state’s effect on fast food has been hidden, I believe. Merchants hate raising prices in a competitive environment and so they often cut corners in quality. Most of these changes are gradual so as to be barely detectable. But once in a while there is a cataclysm that shakes the entire fast food world, a disruption of one menu item that embodies the underlying movement of prices and rocks the entire industry. Such an event occurred in late 2008, when McDonald’s replaced the Double Cheeseburger on its Dollar Menu with the McDouble—purging an entire slice of cheese from the burger to cut costs. In 2010, Burger King followed suit, emasculating its own double cheeseburger.

Through all this madness, one institution has attempted to hold the line. It is a chain that has now overtaken the Golden Arches as the largest of its kind in the world. It is a place where, last time I checked, you could eat a reasonable and not completely unhealthful lunch for four dollars. And it’s a place that has upheld that great figure—five bucks—as a price worthy of all the nostalgia I attach to it.

Subway was not able to sustain the for-$5-eat-like-a-king-and-wash-it-down-with-something-sweet standard that characterized my coming of age. But for that same amount, it was able to put something on the menu that would satisfy the most hungry patron, so long as he was fine with drinking water: The $5 foot-long sandwich.

I rarely ordered it myself. I always found six inches to be almost enough and twelve inches to be too much bread. But I knew plenty who did order it. Like a relic from times more rugged yet more comforting, this $5 sandwich screamed to the world—to the millions of customers visiting the nearly 30,000 establishments residing in the United States alone—that Subway still remembers. Subway still cares. Subway knows how we feel.

It’s all over, in San Francisco at least. Which means it’s the beginning of the end nationwide. As goes California, so goes the rest of pop culture and food culture too, for good or for evil. Due to the burgeoning price of doing business, the proximate cause being the high minimum wage in the area, Subways in San Francisco have retired the $5 foot-long sandwich.

There are worse consequences of minimum wage laws. These laws are a horrendous attack on the liberty of employees, in particular, and destroy economic opportunities for all who cannot price their labor at or above the legally mandated minimum. They are one of the state’s key weapons in its war on the poor. Usually middle class people hardly feel the pain of these laws. Perhaps now they’ll take notice.

Yet it was not minimum wage alone that brought us to this sad point. Decades of relentless regulation, litigation, taxation, and inflation culminated in this sad day, when the $5 mark so heroically fortified and defended by Subway was finally broken through by the forces of state planning. Yes, I am well aware that government props up these businesses as well, that many laws conspire to artificially push prices down even as other policies add pressure upward. Today the policies pushing upward on price have won. And all of San Francisco, likely to be followed by all the world, has lost.

Anthony Gregory

Anthony Gregory is a Research Editor at The Independent Institute. His articles have appeared in the San Diego Union-Tribune, East Valley Tribune (AZ), Contra Costa Times, The Star (Chicago, IL), Washington Times, Vacaville Reporter, Palo Verde Times, and other newspapers.

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