Alan Beatts says San Francisco’s minimum wage hike killed his small bookstore.
Minimum wage rose to $11.05 from $10.74 in January, and Beatts says he can manage that much. But more increases are coming — and fast, especially for the owner of an independent bookstore.
San Francisco’s minimum wage will go up once more this year, to $12.25 in May, and then once in each of the next three years until it hits $15 an hour in 2018.
Beatts has been running Borderland Books, which specializes in science fiction, horror and fantasy, for 18 years. He pays nearly all of his 11 employees close to minimum wage. So the hike, which was approved by voters in November, means he’ll have to give five raises in less than four years. His payroll cost would increase 39% over that time period.
“We were very marginally profitable, but the minimum wage hike is pretty much going to tip us to where we are profoundly unprofitable,” he said.
By his calculations, Bordlerands Books would start losing money when the minimum wage hits about $14.
Beatts isn’t making big bucks — he only pays himself $28,000 a year — but that’s enough for his modest lifestyle. Even though he’s kept wages low, payroll is still his biggest expense after rent.
He says it might be easier for him to absorb the hikes if they were stretched out over a longer period of time. Seattle is also raising minimum wage to $15, but Mom and Pop shops there will have four more years to get to $15 than big companies.
Bookstores in particular have a hard time absorbing an increase in expenses, Beatts said, since a the price of a book is stamped clearly on the cover. That limits the ability of a store owner to raise prices.
Beatts agrees that the city’s minimum wage should move higher. He admits that in San Francisco, even $15 an hour may not be living wage.
But it’s too high for Borderlands Books to absorb. The federal minimum is only $7.25, and while many other states and cities are raising the local minimum wage above that, $15 is much higher than most.
To bring in more money, Beatts thought about charging admission to his author events or broadening his selection of books. Those things could cover a more modest wage increase, he said.
“I feel like the focus of the city has shifted a long way from local small businesses and in the direction of much larger industries,” Beatts said. “That’s a diplomatic way to put it.”