When San Francisco voters approved a minimum wage increase in the November election, Mayor Ed Lee sent what he called a loud and clear message to the nation: “We can give a well-deserved raise to our lowest-wage workers, and we can do it in a way that protects jobs and small business.”
Yet a month after the initial phase of the increase took effect, Borderlands Books became the first business Sunday to cite The City’s higher minimum wage as the catalyst for its closure.
The Valencia Street bookstore expects to clear its shelves and lay off employees by the end of March after struggling to compete with online book sales and a national shift to electronic readers, owner Alan Beatts said.
But San Francisco’s minimum wage increase to $15 by 2018 was the final straw for Borderlands.
“Really this was just one thing, which is the increase in minimum wage,” Beatts said of the closure. “There were folks in here crying yesterday, both customers and staff.”
As of Jan. 1, The City’s minimum wage is $11.05 an hour. It will increase to $12.25 in May before gradually reaching $15 by July 1, 2018.
The business would have to increase sales by at least 20 percent in order to stay afloat, which he said is unrealistic for a bookstore in San Francisco. Another implausible option for its survival would be for Beatts to reduce the staff to himself and another manager, who would each have to work five to six days per week.
“If there were any reasonable way I thought I could stay open in the face of this minimum wage increase, I’d do it,” said Beatts. “I can’t change my prices, they’re written on the backs of the books.”
Last year was Borderlands best year for business, with sales “even allowing a small profit.” Beatts was able to pay himself $28,000 and employ six people.
“In the business of words, nobody does it for the money,” he said.
The bookstore moved to the Valencia Street corridor in 2000 to escape increasing rent prices at its previous location in Hayes Valley.
“I have no problem with the lease,” said Beatts, adding that he has a positive relationship with his landlords. “I have seven years remaining on the lease here and ten years remaining on the lease for the cafe.”
Beatts plans to keep that cafe, which is next to the bookstore, open. Unlike with the books he sells, he said he can change and inflate the prices of his coffee and other offerings.
Over the years, nearby Valhalla Books has printed fliers to advertise all of the bookstores in the Mission district. Lately, however, owner Joe Marchione has limited the number of fliers he prints to 20 copies because stores keep closing.
Just over a week ago, Marchione announced the closure of his own bookstore, the single-person operation he has run since the 1990s.
“It’s almost impossible to compete with the folks online when you have the overhead of a brick-and-mortar store,” he said. “It’s the equivalent of opening a horse-and-buggy store at the time that automobiles were invented.”
The bookstore is expected to host a public meeting in its cafe at 866 Valencia St. at 7 p.m. Feb. 12 to answer questions and discuss alternatives to its closure.
“Overall I think [the minimum wage increase] may be very good for San Francisco,” said Beatts. “We’re a subset of a subset that are having negative effects from this.”