A minimum wage hike has long been championed by President Barack Obama and many on the political left, so it came as a surprise to MSNBC anchors when they found out that a popular San Francisco independent bookstore would be closing down as the direct result of an increase.
Eager to get to the bottom of it, the left-leaning news outlet’s morning program Morning Joe had the store owner on to discuss his decision to shut down.
Alan Beatts said that since the city of San Francisco had voted to raise the minimum wage to $15 an hour by 2018, he would have to go out of business. (It’s currently at $11.05 an hour.)
Beatts said he’s yet to close the bookstore in 2014, but 2013 was his most successful year to date, and he employs five, three of whom would benefit from the voter-approved increase. But because of the increase, he would be operating “in the red in another two years.”
When pressured to cite additional costs that might also have contributed to his decision by co-host Mika Brzezinski, Beatts shut it down, pointing out that online booksellers had nothing to do with his decision and that “stores that were going to be crushed by online sales would have been crushed already.”
“No, this is a direct result of the minimum wage increase,” he said, pointing out that for 60 percent of his staff, he would see a 39 percent increase in costs as well as additional costs for raising the salaries of his other non-minimum wage employees.
“And unlike other businesses,” Beatts added, “I can’t adjust my prices to make up for it.”
Beatts is correct in this regard, as publishers print the price directly on their books, and he would have to charge more than the MSRP. Since most major bookstores sell at a 10 to 40 percent discount, even selling at list with no discount would place Beatts at a disadvantage.
Finally, the hosts of Morning Joe had to accept that the minimum wage hike may have “more unintended consequences” on small businesses like Borderlands.
Commenters, missing the point, took more of a good riddance approach.
“GOOD! Don’t want @!$%#ty @!$%# companies like his thriving in America anyway. Piece of @!$%# companies that like all the profit without the responsibility of taking care of their workers need to fail and make room for companies that can or rather WILL pay their employee’s [sic]. Stories like these really make me beyond happy.”
A separate report from the San Francisco Examiner further explains Beatts’ situation.
He “would have to increase sales by at least 20 percent in order to stay afloat… unrealistic for a bookstore in San Francisco,” the news site notes.
He could also reduce staff to himself and one other employee and 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.”
Do you think the coming minimum wage hikes will kill small businesses across the country? Sound off in our comments section.