San Francisco forces locally owned bookstore to close by mandating $15 minimum wage

Saturday, December 26, 2015 by: J. D. Heyes
Tags: minimum wage, small business, San Francisco

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(NaturalNews) Left-wing activists demanding "social justice" have managed to convince policymakers up and down the West Coast to adopt regulations forcing local shops and businesses to pay their low-skilled workers an inordinately high minimum wage -- one that is nearly double the federal minimum wage. And now, predictably, many of those shops are becoming casualties of this economic terrorism.

One of them is a beloved bookstore that had been in business nearly two decades. But there will be others.

As reported by the American Enterprise Institute (AEI) on its website, residents of San Francisco voted to increase the minimum wage in the city to $15 an hour by 2018, requiring shops and businesses to pay low-skilled and younger workers without experience an outsized wage that is usually reserved for more-experienced, better-trained employees.

As such, Borderlands Books has become one of the first San Francisco businesses to close as a result of the policy, because its owners simply cannot afford the higher mandated wage.

Artificially higher wages costs jobs

"Borderlands is closing," the bookstore announced in recent days. "In 18 years of business, Borderlands has faced a number of challenges. The first and clearest was in 2000, when our landlord increased our rent by 100% and we had to move to our current location on Valencia Street. All of the subsequent ones have been less clear-cut but more difficult. The steady movement towards online shopping, mostly with Amazon, has taken a steady toll on bookstores throughout the world and Borderlands was no exception. After that and related to it, has been the shift towards ebooks and electronic reading devices. And finally the Great Recession of 2009 hit us very hard, especially since we had just opened a new aspect to the business in the form of our cafe.

"But, through all those challenges, we've managed to find a way forward and 2014 was the best year we've ever had."

Until, in November, voters passed the ordinance requiring the higher minimum wage. And while Borderlands Books said it "support[s] the concept of a living wage," the store simply cannot operate if it must pay employees that much because it cannot make a profit.

As Charles Platt at AEI noted:

Bottom Line: Over several decades, Borderlands Books was able to survive a 100% rent increase, the effects of the Great Recession, and competition from Amazon, ebooks and electronic reading devices. But they won't be able to survive the voter-endorsed minimum wage law government-mandated wage floor that guarantees bookstores in the city will be forced to close down. And Borderlands Books is probably not an isolated case -- many of the other book stores in San Francisco will likely face the same fate. In other words, the economic lesson here is "minimum wage, maximum sorrow" for San Francisco book stores.

Businesses face stark choices - and labor loses

The predictions for fewer overall jobs -- employment lost specifically because of a higher government-mandated wage -- is not a partisan endeavor. The non-partisan Congressional Budget Office published a report a year ago stating that a federal minimum wage hike to just $10.10 an hour would result in a loss of a half-million jobs.

The same report estimated that a wage at that level could lift 900,000 Americans out of poverty. Technically, that's true; at 40 hours per week and before taxes, insurance and other deductions, $10.10 an hour is just over $21,000 per year; according to the Department of Health and Human Services, the federal poverty level for 2015, for a family of two, is $15,930, and for a family of four, it is $24,250. But when you add in the employer mandate from Obamacare, which is having a negative effect on employment, as tracked by by Investors Business Daily, many low-wage employees are having their hours cut and aren't working that many per week.

As noted by The Washington Free Beacon, businesses forced to pay more for labor than the labor is worth face three choices: reduce the workforce (through layoffs and automation), increase the price of goods to compensate for the additional labor costs, or both.

Sources:

http://freebeacon.com

http://www.borderlands-books.com

http://www.usatoday.com

http://news.investors.com

https://www.federalregister.gov