On February 2nd, the blog for Borderlands Book Store in San Francisco posted
In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018. Although all of us at Borderlands support the concept of a living wage in principal 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. Consequently we will be closing our doors no later than March 31st. The cafe will continue to operate until at least the end of this year.
Many businesses can make adjustments to allow for increased wages. The cafe side of Borderlands, for example, should have no difficulty at all. Viability is simply a matter of increasing prices. And, since all the other cafes in the city will be under the same pressure, all the prices will float upwards. But books are a special case because the price is set by the publisher and printed on the book. Furthermore, for years part of the challenge for brick-and-mortar bookstores is that companies like Amazon.com have made it difficult to get people to pay retail prices. So it is inconceivable to adjust our prices upwards to cover increased wages.
The change in minimum wage will mean our payroll will increase roughly 39%. That increase will in turn bring up our total operating expenses by 18%. To make up for that expense, we would need to increase our sales by a minimum of 20%. We do not believe that is a realistic possibility for a bookstore in San Francisco at this time.
So, what it gets down to is — if someone (or a group of someones) out there wants to buy us a building, I'll be happy to move the store and stay in business. But, otherwise, I cannot see any solution that will allow us an even half-way reasonable chance to make the business work at a minimum wage of $15 an hour.
Do I seriously think that someone will buy us a permanent home for the store? Not at all. I would do it for my store, but I don't think I'd do it for anybody else's. On the other hand, if I had as much cash as Ron Conway, Mark Zuckerberg or Elon Musk, I guess I might do something like that. But, realistically, it's not going to happen.
My complaint is, despite knowing that this change would be hard for small retail stores, especially bookstores, the city government did nothing in drafting the law to alleviate the negative effects on those businesses, despite giving lip-service to the idea that they are important. When the law passed, Mayor Ed Lee said, "We can give a well-deserved raise to our lowest-wage workers, and we can do it in a way that protects jobs and small business." Scott Wiener, the city supervisor for the district where Borderlands is located, said last Monday night on the news, "I know that bookstores are in a tough position, and this did come up during the discussions on minimum wage". But there are no elements in the wage ordinance or any other ordinance, that offer any new protections or assistance for small businesses. All businesses are treated the same, regardless of size or ownership, despite the acknowledgement that at least some of us are in "a tough position".
This experience is in no way unique. And comic store owners are having similar feelings. Mentioning no names, but in cities like San Francisco with high rents and high costs of living, as well as a relative lower amount of low cost labour, this will see an increase in costs but not a great deal more money on the streets to be spent, in relative terms. Ironically, it is poorer districts where more people will benefit from a rise in minimum wages, and more money put in the pockets of potential comic store customers, and so may find it easier to pay their own employees more as well.
Say, anyone want to buy their local comic store a building?