Minimum Wage Increase Kills Local Book Store [UPDATED]

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Tell me if you’ve heard this one.  A self-identifying progressive city, a home to a vibrant community of artists and a cultural mecca to many, has pity on its poorest, hardest working denizens and attempts to bring them out of poverty by raising the minimum wage.

No, this isn’t Portland—it’s San Francisco.

While Portland is currently debating a minimum wage increase, San Francisco already took that step in November when voters approved an initiative to increase the minimum wage to $15 an hour by 2018.

Many in Portland would look to San Francisco as a role model.  After all, what could be more noble than to bring our fellow citizens out of poverty by compensating them adequately for the hard work they already put in?

However, San Francisco’s noble goal could destroy the artistic culture they so cherish.

In response to the minimum wage increase, Borderlands Books, a locally owned and operated book store, is shutting its doors.

The shop which has survived numerous challenges, including the 2009 recession, competition from Amazon and online marketplaces, and the introduction of e-books, cannot survive this final blow.

“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,” wrote the owners, “Borderlands Books as it exists is not a financially viable business if subject to [a $15 per hour] minimum wage.”

What the people of San Francisco and like-minded progressive cities are forgetting in their incessant crusade for higher pay is that a higher minimum wage doesn’t hurt the big box stores that they vilify.  Giant chains like Wal-Mart can absorb the increased labor costs, while remaining competitive.

However, small mom and pop shops, the kind of stores that give cities like San Francisco and Portland their unique and vibrant appeal, don’t have the flexibility to adjust to the increased costs imposed by a higher minimum wage.  They are the ones that suffer when the minimum wage goes up.

“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%,” said the owners.  “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 owners of Borderlands Books considered cutting staff and taking on more responsibilities themselves.  However, they quickly found that they actually would make more money working full time at an easier job at the new minimum wage than continuing to run their small business.

This is a small example of what’s in store for the arts and cultural communities in San Francisco, Portland, and similar cities across the nation.  As progressives pass further “reforms,” they’ll continue to kill the small shops and markets that give cities their respective identities.  In the end, all that will be left are the big box stores, sapping the character and uniqueness of each city.

The closing of Borderlands Books serves as a cautionary tale to Portland residents seeking to raise the minimum wage.  It’s easy to see the theoretical benefits of raising the minimum wage, but it’s vital to remember the real life consequences.

Policies like this will kill the very artistic and cultural centers that progressives treasure.

 

[UPDATE]

Thanks to their loyal and generous customers, Borderlands Books has been able to stay open.  The owners created a sponsorship program which allowed them to compensate for increased labor costs.  Of course, none of this would have been necessary if the minimum wage hadn’t been raised.

8 COMMENTS

  1. “Minimum wage goes up, prices go up for no net gain, simple. Skills need to go up to get better wages.”

    Simple. Get workers off the welfare dollar and onto the worker dollar. Put more money in the pockets of working people so they can invest in their local and national economies.

    Or maintain the status quo with this simple tweaking: put the government welfare income of the working poor squarely on the shoulders of the companies that leech off the government to buttress their payrolls with the government food credits, government housing credits, government health credits that keep workers alive and well enough to work at below-poverty minimum wage income.

    Or zip it. Understanding that our artificial statist economy is now subsidized wholly on tax money that is the real force that keeps millions of workers at work is not rocket science and does not require a doctorate in economics.

    If you doubt it for a second, use your own calculator and see how long you can stay clean, fed, and healthy enough to work at minimum wage without your “free capital” boss shoving the government teat into your mouth to keep you alive.

    Go home. That’s the thing to do. Quit pretending this perverted statist economic dictatorship the wealthy have imposed on this nation is working. Grow up and pay a day’s wage for a day’s survival that requires no life support from government for any full-time worker’s basic human needs.

  2. Did this store even try to see what would happen if they stayed open and increase their wages?? Pretty sad that they just gave up. Even more sad is that they didn’t understand much about economics in that all those people that are now getting a better wage will spend that money. Not all of them will spend it in their bookstore, but some will. Maybe even enough to increase sales more than 20%. Sadly, they didn’t even try to find out. 🙁

  3. And a chicken in every pot…of course, where does the chicken come from? Or where do the revenues come from to cover the increased wage costs? It doesn’t matter if you’re just buying votes.

  4. To compare Maine to SF is a joke and as irresponsible as calling fire in a theater. There is no comparison except for the hippies. Then to like at a book store. With the greedy practices of Amazon they are putting brick and mortar and online stores out of business so the is all bs.

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