Borderlands Books, a much-praised science-fiction and comic-book store in San Francisco, opened for business in 1997. It has survived two recessions, a 100 percent rent increase, the opening of big chain bookstores, and the rise of Amazon’s deep-discounting online empire. What will finally force it to close its doors next month is San Francisco’s proposed increase in the minimum wage, which will hit $12.25 an hour in May.
Owner Alan Beatts minced no words about the reason for his store’s closure: “Borderlands Books as it exists is not a financially viable business if subject to the minimum wage.” Ironically, he said 2014 was the store’s best year in its 18-year history, and the store turned a small profit and was able to employ six people. But Beatts says the planned increases in the city’s minimum-wage law — which top out at $15 an hour by 2018 — will sink him. He would either have to increase sales by 20 percent (unrealistic) or reduce the staff to two managers and one part-time employee — all of whom would have to work greatly extended hours. “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,” Beatts wrote in a statement to his customers. “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.”
Raising the minimum wage has become the new feel-good elixir of the Left, which loves the fact that its simplistic appeal can win over electorates in many cities. But the law of unintended consequences kicks in after the warm glow of voting for “a living wage” passes. Young people — especially minorities — are frozen out of an already tight job market and small businesses are least able to afford the extra expense of an increase. “Businesses will not pay workers more than the value they produce,” notes James Sherk, a labor-policy analyst at the Heritage Foundation. “A $15 minimum wage forbids anyone whose labor produces less than that from working — as this bookstore’s employees learned the hard way.”