In November SF passed a law to raise the minimum wage from current $10.74 to $15 by 2018.

 

Now the fallout.

 

Prominent San Francisco Bookstore to Close, Citing Minimum Wage Increase | NFIB

 

One media outlet noted that works out to a minimum annual salary of $31,000 per year for a full-time employee.

 

Borderlands owner Alan Beatts wrote in a blog posting announcing the closing, “Although all of us at Borderlands support the concept of a living wage in princip[le] and we believe that it’s possible that the new law will be good for San Francisco – Borderlands Books as it exists is not a financially viable business if subject to that minimum wage.”

 

Background:

 

City and County of San Francisco : Minimum Wage Ordinance (MWO)

 

San Francisco votes in $15 minimum wage - Nov. 5, 2014

 

Under the new law, wages will rise to $11.05 on Jan.1, then $12.25 in May before increasing every year until they reach $15 in 2018. After that, increases will be tied to inflation in the Bay Area.

San Francisco Mayor Edwin Lee applauded the result and said voters "sent a message loudly and clearly" that "we can take on the growing gap between rich and poor."

 

 

Maybe someone can buy Mayor Lee a copy of Atlas Shrugged or The World is Flat - while they can still buy them at local bookstore.

In November SF passed a law to raise the minimum wage from current $10.74 to $15 by 2018.

 

Now the fallout.

 

Prominent San Francisco Bookstore to Close, Citing Minimum Wage Increase | NFIB

 

 

 

Background:

 

City and County of San Francisco : Minimum Wage Ordinance (MWO)

 

San Francisco votes in $15 minimum wage - Nov. 5, 2014

 

 

 

Maybe someone can buy Mayor Lee a copy of Atlas Shrugged or The World is Flat - while they can still buy them at local bookstore.

 

While I don't support the minimum wage increases, I'm not sure how much it had with this store closing, despite what the owner is saying. Bookstores are a dying breed, as people rapidly turn to digital. It's not that much different from record stores dying out. The large bookstore chains have been dying for several years. Technology probably has played just as big a factor in this closing, although the minimum wage increase may have hastened it. Lets face it, the first step increase in the minimum wage here was about .30, or less than 3%. If that alone is what put him out of business, he probably wasn't going to last very long anyway.

 

Again, I don't support this increase, but this is a poor example of why the increase isn't a good thing.

Technology probably has played just as big a factor in this closing, although the minimum wage increase may have hastened it.

 

Agree.

While I don't support the minimum wage increases, I'm not sure how much it had with this store closing, despite what the owner is saying. Bookstores are a dying breed, as people rapidly turn to digital. It's not that much different from record stores dying out. The large bookstore chains have been dying for several years. Technology probably has played just as big a factor in this closing, although the minimum wage increase may have hastened it. Lets face it, the first step increase in the minimum wage here was about .30, or less than 3%. If that alone is what put him out of business, he probably wasn't going to last very long anyway.

 

Again, I don't support this increase, but this is a poor example of why the increase isn't a good thing.

 

Business plan more than a few months out. Good ones plan years in advance. Can a business tolerate a 3% increase - probably. Can a business absorb an almost 50% increase in 3 years? Obviously not.

Business plan more than a few months out. Good ones plan years in advance. Can a business tolerate a 3% increase - probably. Can a business absorb an almost 50% increase in 3 years? Obviously not.

 

I agree that businesses plan. But still, this situation has played out at bookstores across the country for the last several years with high minimum wage or not. Just ask Border's, Waldenbooks, B. Dalton's, Encore, Media Play or any of the other bookstore chains that have closed in the last 10 years. He was already operating barebones to begin with, and only paying himself about 28k per year according to an article I found Borderlands Books in SF announces closure, cites minimum wage increase | Other News | San Francisco | San Francisco Examiner. And that was last year, his best year ever. So he's running a super small business, in a rapidly dying industry, in one of the most expensive cities in the country to live in. Again, I agree that the increase in minimum wage is bad. But this is a poor example of a business that's being impacted to the point of closing. This bookstore was on it's way out regardless of whether minimum wage went up or not. Sorry, this just isn't the best way to prove the point.

This law will help some poor people and hurt others. All it will do is take some money from people who will lose their jobs because of the law and give it to others who got a raise because of the law. Workers who already make a middle class living or higher won't even notice except that some prices of things will go up.

 

Also, some unskilled workers may be in trouble when more educated people begin looking for "easier" jobs that will pay as much or almost as much as they now make with a job that has more responsibility or pressure.

I'd have to think that a bookstore would have as good of a chance of being viable in San Francisco as any where in the country.

 

I'm sure any business that has to close due to the minimum wage raise in SF will be dismissed as being poor businessmen also.

 

These laws are targeted at the Evil Big Box retailers and Chain Restaurants, when in fact these will be the only places that can afford the new wages while the local owned stores, restaurants, printers, book stores and other small businesses are the ones that will suffer the most and be less likely to be able to survive paying these wages.

 

Of course no one thinks of the consequences when passing feel good laws like this.

I agree that businesses plan. But still, this situation has played out at bookstores across the country for the last several years with high minimum wage or not. Just ask Border's, Waldenbooks, B. Dalton's, Encore, Media Play or any of the other bookstore chains that have closed in the last 10 years. He was already operating barebones to begin with, and only paying himself about 28k per year according to an article I found Borderlands Books in SF announces closure, cites minimum wage increase | Other News | San Francisco | San Francisco Examiner. And that was last year, his best year ever. So he's running a super small business, in a rapidly dying industry, in one of the most expensive cities in the country to live in. Again, I agree that the increase in minimum wage is bad. But this is a poor example of a business that's being impacted to the point of closing. This bookstore was on it's way out regardless of whether minimum wage went up or not. Sorry, this just isn't the best way to prove the point.

 

 

With all respect, this is a perfect example of the impact of jacking up the minimum wage. There are many small businesses barely making it, but making it and providing jobs. Jack up any operating costs (be it wages, rent, etc) that can't be passed on to the customers because of competition pressures (bookstores are a great example) and they close. And when they close, the jobs are lost and another option for the consumer is lost.

 

People complain about big box stores on here all the time. Jacking up minimum wages will shut down the small independent businesses and the big box stores will be all that is left. Small bookstores, hardware stores, butcher shops, etc, etc, etc.that rely on a low minimum wage in order to exist are going to disappear in SF. And then the wackos out in SF will be stuck with the big businesses that they love to vilify. Bittersweet irony.

 

Noble idea to raise minimum wages but the doctrine of unintended consequences rears its ugly head again.

Totally agree Leatherneck. Add in the highest taxes in the US and how is a small business owner to survive in SF.

Business plan more than a few months out. Good ones plan years in advance. Can a business tolerate a 3% increase - probably. Can a business absorb an almost 50% increase in 3 years? Obviously not.

 

Good answer!