Borderlands Books is a privately owned San Francisco bookstore that has been in operation for nearly 20 years.
Concentrating on science fiction, fantasy, mystery and horror works, Borderlands has overcome a number of challenges since opening in 1997: a 100 percent bump in rent in 2000; the trend toward online sales; the increasing popularity of ebooks; and the impact of the Great Recession.
Still, according to store officials, Borderlands managed to overcome each of the trials. In fact, last year was the best the store had enjoyed.
“At the beginning of 2014, the future of the business looked, if not rosy, at least stable and very positive,” Borderlands officials wrote on the store’s website. “We were not in debt, sales were meeting expenses and even allowing a small profit, and, perhaps most importantly, the staff and procedures at both the bookstore and the cafe were well established and working smoothly.”
Despite that, Borderlands recently announced it would be closing, by March 31 at the latest.
The reason? Last November San Francisco voters, out of touch with the realities of running a business, overwhelmingly passed a measure that will increase the minimum wage within the city to $15 an hour by 2018.
Borderlands Books as it exists cannot remain financially viable in light of increased minimum wages, according to the store website.
Unlike some businesses, bookstores are hindered in their ability to adjust for rising costs.
There’s a limit to how much a bookstore can increase book prices because publishers set prices. In addition, companies such as Amazon.com have siphoned off consumers from brick-and-mortar bookstores and made it more difficult to get them to pay retail.
In other words, adjusting prices upward to cover increased wage costs isn’t an option for Borderlands.
The change in the minimum wage will see Borderlands’ payroll jump nearly 40 percent. That will result in total operating expenses being bumped up by 18 percent. For Borderlands to offset that expense, it would need to increase sales by a minimum of 20 percent, which it doesn’t see as realistic.
Decreasing expenses isn’t an option, either. The only way for the bookstore to cut back enough to remain viable would be to reduce its staff to its two managers and one part-time employee.
“Taking all those steps would allow management to increase their work hours by 50-75 percent while continuing to make roughly the same modest amount that they make now … ,” according to bookstore officials. “That’s not an option for obvious reasons and for at least one less obvious one – at the planned minimum wage in 2018, either of them could earn more than their current salary working only 40 hours per week at a much less demanding job that paid minimum wage.”
So, what we have is a feel-good measure passed by San Franciscans that while well-intentioned, will ultimately cost jobs, businesses and, in this case, opportunities for bookstore aficionados.
(HT: Carpe Diem)