Posted on 02/04/2015 4:14:05 PM PST by grundle
When San Francisco voters approved a minimum wage increase in the November election, Mayor Ed Lee sent what he called a loud and clear message to the nation: “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.”
Yet a month after the initial phase of the increase took effect, Borderlands Books became the first business Sunday to cite The City’s higher minimum wage as the catalyst for its closure.
The Valencia Street bookstore expects to clear its shelves and lay off employees by the end of March after struggling to compete with online book sales and a national shift to electronic readers, owner Alan Beatts said.
But San Francisco’s minimum wage increase to $15 by 2018 was the final straw for Borderlands.
“Really this was just one thing, which is the increase in minimum wage,” Beatts said of the closure. “There were folks in here crying yesterday, both customers and staff.”
As of Jan. 1, The City’s minimum wage is $11.05 an hour. It will increase to $12.25 in May before gradually reaching $15 by July 1, 2018.
The business would have to increase sales by at least 20 percent in order to stay afloat, which he said is unrealistic for a bookstore in San Francisco. Another implausible option for its survival would be for Beatts to reduce the staff to himself and another manager, who would each have to work five to six days per week.
“If there were any reasonable way I thought I could stay open in the face of this minimum wage increase, I’d do it,” said Beatts. “I can’t change my prices, they’re written on the backs of the books.”
Last year was Borderlands best year for business, with sales “even allowing a small profit.” Beatts was able to pay himself $28,000 and employ six people.
“In the business of words, nobody does it for the money,” he said.
The bookstore moved to the Valencia Street corridor in 2000 to escape increasing rent prices at its previous location in Hayes Valley.
“I have no problem with the lease,” said Beatts, adding that he has a positive relationship with his landlords. “I have seven years remaining on the lease here and ten years remaining on the lease for the cafe.”
Beatts plans to keep that cafe, which is next to the bookstore, open. Unlike with the books he sells, he said he can change and inflate the prices of his coffee and other offerings.
Over the years, nearby Valhalla Books has printed fliers to advertise all of the bookstores in the Mission district. Lately, however, owner Joe Marchione has limited the number of fliers he prints to 20 copies because stores keep closing.
Just over a week ago, Marchione announced the closure of his own bookstore, the single-person operation he has run since the 1990s.
“It’s almost impossible to compete with the folks online when you have the overhead of a brick-and-mortar store,” he said. “It’s the equivalent of opening a horse-and-buggy store at the time that automobiles were invented.”
The bookstore is expected to host a public meeting in its cafe at 866 Valencia St. at 7 p.m. Feb. 12 to answer questions and discuss alternatives to its closure.
“Overall I think [the minimum wage increase] may be very good for San Francisco,” said Beatts. “We’re a subset of a subset that are having negative effects from this.”
http://www.borderlands-books.com/
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 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.
The other obvious alternative to increasing sales would be to decrease expenses. The only way to accomplish the amount of savings needed would be to reduce our staff to: the current management (Alan Beatts and Jude Feldman), and one other part-time employee. Alan would need to take over most of Jude's administrative responsibilities and Jude would work the counter five to six days per week. Taking all those steps would allow management to increase their work hours by 50-75% while continuing to make roughly the same modest amount that they make now (by way of example, Alan's salary was $28,000 last year). That's not an option for obvious reasons and for at least one less obvious one -- at the planned minimum wage in 2018, either of them would earn more than their current salary working only 40 hours per week at a much less demanding job that paid minimum wage.
Although the major effects of the increasing minimum wage won't be felt for a while, we've chosen to close now instead of waiting for two reasons. First, the minimum wage has already increased from $10.74 per hour to $11.05 (as of January 1st) and it will increase again on May 1st to $12.25. Continuing to pay the higher wage without any corresponding increase in income will expend the store's cash assets. In essence, the store will have less money (or inventory) six months from now, so closing sooner rather than later makes better business sense. But more importantly, keeping up our morale and continuing to serve our customers while knowing that we are going to close has been very painful for all of us over the past three months. Continuing to do so for even longer would be horrible. Far better to close at a time of our choosing, keep everyone's sorrow to a minimum, and then get on with our lives.
The HARBINGER of bigger and better th...,,
nevermind
You voted for it.
Enjoy it.
Have a nice day.
OHHH I been to that bookstore that saddd
RATS hate those evil profits.
“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.”
...said the economically illiterate mayor who never ran a business in his life.
The right minimum wage: 0. http://www.nytimes.com/1987/01/14/opinion/the-right-minimum-wage-0.00.html
Great bookstore. Nobody ever started one of those looking to get rich, and you have to be a fairly good businessman to break even. Why it wasn’t obvious to the ideologues that these would be the first people hurt by arbitrary wage control is a bit of a mystery. True, all the employees will enjoy an increase in salary, but both numbers turn out to be zero.
The only businesses harmed by increasing the minimum wage are small businesses. Big businesses aren’t affected. They like to advocate a higher minimum wage because it makes them look good to the low-information types, and it drives the small-business competition out of business.
Yep, if it weren't for that darned ole "reality", and subjecting US to it... life would be a virtual Utopia!
SF will now fine the bookstore for closing and depriving their employees a living wage.
Democratic logic - raise the minimum wage to $1000 an hour and make everyone rich!
Blindly loyal to the party line to the end?
The people that get regs like this passed are also the ones that urge everyone to shop local and support mom and pop operations.
In addition to killing the businesses they want they are subsequently going to see their taxes go through the roof to support all the union workers on the ever growing municipal payroll.
the whole concept of the government telling me how much I have to pay the people who ASKED ME for a job is inane...I have, over many years, had verbal contracts with all of my employees and they and I were always in agreement and both were satisfied...I have had people working for me making 25-30% more than union people in this city doing the same job.....They ALWAYS got paid if they had to take a sick day off..they had paid vacations...they and I came to a mutual agreement and the government had nothing to do with it.
BINGO! Give it a couple of years and watch all the skinny jean, scarf-wearing java sippers complain that there are no "quaint" or "unique" shops anymore, just that awful big old baddie, Walmart!
Here in Seattle the owner of Cupcakes Royale was a very vocal advocate of raising the minimum wage.
She has a few stores in Seattle. Then after the minimum wage increase went through, she realized that she could not afford to open another Seattle store.
Other small businesses who have to deal with this increase are obviously very PO’d at her.
Oh we have seen this script before. During the many purges of the Stalin era many loyal communists could not believe Uncle Joe was responsible as they were being dragged to their execution.
All of those self acclaimed brilliant minds and not a single one understands the most basic and unchanging law: the law of unintended consequences!
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