Minimum Wage

San Francisco Minimum Wage Law Claims Scalp of Great Science Fiction/Fantasy Specialty Bookstore

Yes, a higher minimum wage can kill small businesses.

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If you don't believe that increasing the minimum wage can harm, perhaps even fatally, small businesses, you might be interested in this  account of why they are going out of business from the owners of the great science fiction/fantasy specialty bookstore Borderlands Books on San Francisco's hip shopping mecca Valencia Street

They explain how, after surviving rent doublings, having to move, the encroachment of Amazon on retail book sales, and the recession, the city's new $15/hour minimum wage is finally driving in the stake.

They make it clear that of course, of course they believe in the ideal of a living wage. (I think that's required to be a citizen of that city.) But, but….

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.

For their particular book business, they don't see just raising prices as a realistic option:

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.

And a kicker, after explaining how the owners could just pick up all tasks they currently pay employees for themselves:

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, [one owner'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.

Zenon Evans from our February issue on how even some full on socialists rebel against higher minimum wages in practice, when it's coming out of their pockets.

Me on the eternal changing character of the city of San Francisco, from 2001 and all the more relevant for it.

I was a semi-regular shopper at the store during my visits to San Francisco, and will miss it.

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  1. It’s not my fault if they can’t compete in the free market.

    1. You joke, but this is really the retort you’re most likely going to get from the ignorant leftie types. “If you can’t deal with our mandates you’re bad at business and dumb.”

  2. This is sad. I never got to see it, but a friend of mine loves the place.

    That said, ha ha!

  3. “The cafe side of Borderlands, for example, should have no difficulty at all. Viability is simply a matter of increasing prices.”

    Brilliant! We increased the minimum wage so the every company operating in San Francisco will simply increase prices and none of the people making minimum wage will be any better off since the cost of rise in cost of living will eat up their minimum wage increase.

    Meanwhile, any company that can’t, for whatever reason, raise prices will just go out of business.

    It’s a win/win, really.

    1. “Brilliant! We increased the minimum wage so the every company operating in San Francisco will simply increase prices and none of the people making minimum wage will be any better off since the cost of rise in cost of living will eat up their minimum wage increase.”

      It’s worse than that.
      No company raises prices to trade dollars; the increased costs are marked up with the overhead and profit costs.
      So Sammy Slimebag (that’s you, commie-kid) gets $2.00 extra per hour and pays $3.00 more for that dinner.
      But wait! There’s more! Sammy’s boss now demands $3.00 more per hour, or why should she shoulder the responsibility of keeping the bank, so Sammy’s meal is again adjusted to $6.00 more.
      Do we need to work further up the line? Hey, commie-kid! Feeling richer now?

    2. Technically speaking even with higher prices the minimum wage workers still end up comparatively wealthier than if they hadn’t gotten a wage hike but only if they aren’t fired and their working hours aren’t cut.

      Walter Williams has the best argument I’ve heard against min. wage laws in writing how racist white South African mining unions lobbied the gov’t there to impose a national minimum wage for non-whites in the mining industry… seems the apartheid-imposed poverty of coloreds made them able to tolerate lower wages than whites could which made them able to gain experience & promotions faster than those in the white communities who were facing higher unemployment from refusing to work for so little & having mining companies stick to non-white mining crews

      1. Technically speaking even with higher prices the minimum wage workers still end up comparatively wealthier and therefore their tax rates go up.

  4. Probably good timing. After measles gets through with the city business would have tanked anyway.

    1. Surprise, San Francisco (Marin County) is sanctuary city for the anti vaxxers.

  5. “Zenon Evans from our February issue on how even some full on socialists rebel against higher minimum wages in practice, when its coming out of their pockets.”

    And some brain-dead lefties rebel against socialized medical coverage when it’s coming out of their pockets also; see that ignorant witch griping that she was fine with O-care until it became obvious that *she* had to pay!
    Higher taxes are wonderful! So long as the taxes land on that guy over there, right Buffett?

  6. “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, [one owner’s] salary was $28,000 last year).”

    Petite bourgeiousie running dogs of capitalism, consuming the emaciated flesh of the proletariat.

  7. by way of example, [one owner’s] salary was $28,000 last year

    In San Francisco O_o

    Holy shit. I live in a much, much cheaper place and couldn’t manage on that.

    By the way, Obama says “you didn’t build that”, you fat cat.

  8. “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.”

    It is amazing how few people can tell the difference between price and cost.

    Yeah, the market price is set by the market, and the difference between price and cost is profit. And that’s why business owners are obsessive about keeping their costs down–because they can’t control the market price.

    I think people realize they’re ignoramuses after you explain that to them; at least, that’s usually when they turn on me and say something stupid about the Tea Party or Reaganomics or something.

    You mean a single bookstore in San Francisco doesn’t have pricing power in a national market for books–really?!

    What progressives say every day about how businesses and the economy work is far, far dumber than creationism.

    1. I would add a different bit of info – for new book sales, retail distributors demand a 55% discount from publishers as well as accepting returns. So a $20 book they get for cost of $9. So even if Amazon is discounting, say 1/3 from retail, there still is room to work with. The problem, of course, is that Amazon’s cost of operations are far different than a retail storefront.

    2. What they mean is that cafe food has no price set by a national supplier and printed right on the commodity itself, unlike books. If all meals in a city cost eaters 10% more, the griping will subside within a few days. But charging over list price, when that disparity remains for the foreseeable future, means the public will never have the chance to forget the price increase.

      1. I understand.

        I wasn’t talking about the guy that made the statement, I was talking about the fact that he has to explain that to the reporter, apparently, and everyone else in San Francisco.

        I’m sure almost none of the people who support that ridiculous minimum wage hike understand the difference between price and cost–that the government has added to his cost with their minimum wage, and he really can’t jack up his prices higher than Amazon to make up for it.

        The fact that so many people need that explained to them is frightening. …and they’re so sure of their intellectual superiority on these issues, too! I must know a hundred fundamentalist creationists who aren’t so ignorant that they can’t tell the difference between cost and price.

  9. 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.

    This is priceless: “Every single one of us was in favor of this idea that caused us all to lose our jobs, and we still kinda think it is overall a good idea!”

    Talk about refusal to see reality.

    1. They’re all for it! So long as THEY don’t have to pay for it.
      Fucking lefty slimebags. I hope they choke on the Starbucks coffee they can no longer afford.

    2. “Thank you sir, may I have another?!?!”

  10. Well, I for one am not surprised to see reason obsessively focusing on the minimum-wage angle here and not the obvious culprit, the large corporation Amazon and, of course, the Koch brothers.

    1. The problem with parodying people who think like that is that in reality the people who think like that are even dumber than your parody, so then you have to deal with people who think you’re serious.

      …and it isn’t their fault!

      1. Poe’s Law.

  11. The root of the problem is wage slavery, plain and simple.

    Once San Francisco becomes fully anarcho-syndicalist, these issues will no longer exist.

    1. “Once San Francisco becomes fully anarcho-syndicalist, these issues will no longer exist.”

      True. And we will then hope the tourists pay the extravagant costs to support the amusement park.

  12. (by way of example, [one owner’s] salary was $28,000 last year)

    That’s unpossible! All business owners are fat cats with unlimited money!

  13. Obviously these business people are lying! Raising the minimum wage was never intended to put people out of business, so it’s unpossible that minimum wage is the reason! They’re full of shit! Fucking fat cats just want to fire their employees and go swim in their pools of money! Fucking rich people! Aaaauuuuggghhh!

    1. Is it the fat cats or the speculators? Or corporations?

  14. Obviously part of the KKKochBros/Peanutz conspiracy’s disinformation campaign to keep the Worker in shackles.

  15. These people have pointed out that working a minimum wage job, with the wage increase, would pay about as much as what they make now only they’d only work 40 hours a week… how much do you wanna bet these ex-owners will be competing and winning against first-time job hunters for a position in a large retail chain bookstore? They’re certainly worth the 15$ an hour… teens with no previous job experience? Not so much – maybe they can do unpaid internships or volunteer at 0$ per hour to gain the proper experience

    1. There are no “large retail chain bookstores” in SF any more, now that Borders has closed. The closest thing is area mini-chain Books Inc.

  16. Maybe they could divide up the bookstore into several companies so that each is below the exempt number of employees, assuming there is an exemption.

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