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How Raising the Minimum Wage Hurts Small Bookstores

A couple months ago, I wrote about a bookstore in San Francisco [1] that was hoping to implement a membership program in order to save itself from financial collapse. The reasons for their imminent demise? California’s new minimum wage. The bookstore explained on its blog [2]:

In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018.  Although all of us at Borderlands support the concept of a living wage in principal and we believe that it’s possible that the new law will be good for San Francisco—Borderlands Books as it exists is not a financially viable business if subject to that minimum wage.

The memberships Borderland offers, at $100 a year, give bookstore members a number of special perks and VIP privileges.

At the time, I was skeptical. But then, I received an email from another bookstore owner in San Francisco: Brian Hibbs, owner of two comic book stores, both named Comix Experience [3]. They’ve been in business (and profitable) for 26 years. But the new minimum wage “digs us a really deep hole,” Hibbs said. He estimated that, unless something changed, the bookstore would have an $80,000 dilemma on their hands by 2018.

And so Comix Experience decided to try out Borderlands’ method: they’ve started a “Graphic Novel of the Month Club.” Their website details [4] the various elements of the membership, which can be set up monthly or annually:

Beginning in July 2015, every month the staff and I will use our passion and experience to choose the single best brand new graphic novel to give you. This book will always be either a stand-alone experience, or the first volume of a new series. As a member of the club, you’ll also be entitled to unique benefits that won’t be offered to anyone else:

● A curated selection of the best new graphic novel each month

● An invitation to a monthly live book club meeting and social event to discuss that book. We will record and stream the in-store meeting so club members all over the world can also participate.

● We will regularly have the writers and artists of each of our picks participate in our monthly club meetings, (e.g. in person, speaking and doing a live event, or a video chat to answer questions).

● For select in-person appearances at the store, you’ll receive an exclusive club-only invitation to attend a private after-hours event with the guest.

● We will create a social media group for members to discuss the book internationally

● Finally, we will provide you with nice swag (like posters or bookmarks) for the selected book wherever possible.

“Comix Experience would strongly prefer to figure out a way to let the market solve the problem rather than raw patronage,” Hibbs notes on his website. “While we have no problem with a fund-raising type approach, for us creating a way to generate new customers and provide our loyal patrons with added value is better.”

We discussed the membership system, and the problems presented by the minimum wage hike, via email. Here is our (lightly edited) conversation:

GO: You guys have been working in San Francisco for 26 years. In that time, have you experienced a lot of money troubles, or have you generally seen customer demand meet your needs as a business?

BH: In the last 26 years, we’ve been profitable for 24 of those—failing only in year one (because ever small business is in the red in year one!), and 2008 during the Great Recession (where, again, we were hardly alone).

GOWhat has the response been to your club thus far? Have you found, in general, that people are wary or receptive to the idea of a sponsorship model?

BH: In a month we’ve hit about 40 percent of our funding goal of www.graphicnovelclub.com [4], and we’re covered for the first increase in Minimum Wage that goes into effect on 5/1 … . People generally seem supportive of the model, though obviously, what our retention rates are after year one may be the more important stat.  I do think, however, that this kind of patronage and crowd-funding probably has a pretty hard limit—the first few businesses in are likely to have the easiest time convincing people to participate, and it will get harder for each one following afterwards.

I do very much think that comics are in a true Golden Age of creative output right now, and that it is really trivially easy to come up with an excellent, compelling and self-contained graphic novel each month that will really turn people’s heads about what the medium is capable of, so I’m very hopeful that our retention rates will be very strong.

GOIs it primarily the minimum wage that seems to be driving this need amongst small businesses in your area?

BH: I can really only speak for myself, or other people who have made public statements—I have been consistently profitable year-over-year for almost all of my 26 years; our rents are not “too high”, we’ve not seen any other kind of left-field increase in expenses—the hole in our budget is purely from the mandated rise in the cost of labor: a 43 percent increase due to this law.

Alan Beatts at Borderlands says the same thing, and while I’ve never looked at his books, I’ve no reason to suspect him of lying when I see just how similar of a position we are in. I know a Seattle-based publisher who says they’re looking at a six figure rise in costs due to this—and again, they don’t make enough extra profit to cover that by natural growth rates.

… A number of my customers have said to me “Ugh, sorry, I voted for this, but I had NO idea it would impact a business like yours”—I think that they thought that they were standing up against multinational corporations who were exploiting their workers, rather than small community-centered local businesses who value art curation over raw profit.

Most small businesses I know work incredibly long hours for relatively little pay, because they do it for love and passion first and foremost.

Finally, I do think that the wishes of the employees should be taken into consideration as well—I have staff who work this job as an adjunct to their education, or as a way of helping support themselves as they build their art careers; I have other employees who quit higher paying jobs to come work here because we actually give them agency and respect, and because it is their passion as well. As long as no one is being exploited, shouldn’t people be able to choose any wage they are happy with?

♦♦♦

Hibbs casts new light on the troubles of small independent bookstores: even if they’re making ends meet, garnering strong customer support, and providing great service, they can still run into frustrating dilemmas. A minimum wage hike doesn’t just affect people working at big-box stores: it can deal a fatal blow to small stores, run by people who are happy with less pay.

Although it would be better if Borderlands and Comix Experience could simply return to the way things were before, they are harnessing community support and consumer demand to inventively keep their businesses alive. They aren’t just asking for handouts: they’re creating a permanent service that will continue to feed their small companies, and keep customers happy. It seems that this model could be one of the best ways to keep small bookstores operating in the future.

30 Comments (Open | Close)

30 Comments To "How Raising the Minimum Wage Hurts Small Bookstores"

#1 Comment By Greg On May 2, 2015 @ 12:35 am

So instead the government should continue to subsidize small businesses by providing subsidies to their employees?

Why should the government allow businesses to externalize their cost of doing business just because we all like bookstores?

#2 Comment By Gerry On May 2, 2015 @ 12:43 am

I don’t know. The minimum wage is not a living wage in a large city like that. If you can’t afford to pay people a decent wage then your business model is a problem. We complain about tax dollars subsidizing corporations like Walmart who won’t pay a living wage and so their employees are dependent on welfare to make up the difference. Just because it is a small business does not exclude it from the same calculus. They have been profitable because they pay their employees badly. That is the bottom line.

#3 Comment By Icarus Swenson On May 2, 2015 @ 2:51 am

If they don’t have a viable model that can take into account new minimum wage standards, they they don’t have a viable model and they should close and allow a company to open that does. The idea that these companies are closing because of government interference is crap. There is no guarantee in free market for a business to be able to stay afloat. It is handled by the market. Many businesses that have closed would be able to stay open if they were allowed to pay $0.50 an hour, but they didn’t have viable business models at the current standard. Too bad. That is one of the drawbacks of business ownership. And maybe the store owners “work incredibly long hours for relatively little pay, because they do it for love and passion first and foremost.” but their employees need to be able to support themselves. If your margins are that thin, you are in the wrong business.

#4 Comment By JR On May 2, 2015 @ 8:34 am

A bookstore like this one is likely to struggle in any case as it has to deal with monster chains and Internet vendors. If it cannot pay a living wage it (and $15 per hour is hardly a princely sum in SF) perhaps it is best if they sell something other than books that have a fatter margin, or raise their prices a bit.

The real story here is that for all but two years, this bookstore has been getting subsidized by the state by producing full-time employees who qualify for food stamps despite working full time.

A living wage isn’t a “principle” it is a necessity. Even if a rise in the minimum wage produces an initial drop in the number of jobs, it puts purchasing power in the hands of those with jobs stimulating the economy in the longer run.

This bookseller might be pleasantly surprised by how many more books he sells when everyone in San Francisco suddenly is getting paid enough to afford to buy them!

#5 Comment By Anna On May 2, 2015 @ 9:24 am

The impact of wage policies on a bookstore has less to do with the survival of independent bookselling than does a customer’s deliberate decision to purchase directly from the independent bookseller instead of patronizing mega-online sellers.

#6 Comment By sef On May 2, 2015 @ 11:01 am

I love books too. I also love hamburgers. But I don’t think I love either one enough to argue that I should be able to enjoy them at someone else’s expense, in this case the workers involved. If justice requires that I pay a bit more for a book or a hamburger, I’m ok with that.

Also may I point out that a minimum wage law attempts to level the market. Cathy’s Book Nook will not be at a disadvantage when compared with Bob’s Book Shack, since both will be required to pay their workers more. My only recourse as a consumer will be to do without books entirely, or at least to buy them in an inferior form (e-books).

#7 Comment By Buzz Baldrin On May 2, 2015 @ 11:05 am

There is no free market in the crony capitalism country of QE, TARP, ZIRP, Boeing subsidies, Too Big to Fail Banks and Too Big to Jail Banksters.

Or companies, like Apple, who make their money branding, outsourcing and selling DARPA’s technologies, financed by USA taxes.

Raising the minimum wage only slightly redistributes the trillion-dollar government giveaways.

#8 Comment By philadelphialawyer On May 2, 2015 @ 11:08 am

I agree with the other posters. And I also question the valorizing of small businesses in general.

Small business often pay low wages. And provide few or no benefits. No paid vacation days, sick, or holidays. No health insurance. And so on. Small businesses often flout labor relations, labor standards, occupational health and safety laws, and the like. Enforcement funds are limited, and the responsible agencies naturally often focus on the bigger employers. And, as here, there is a sort of extra legal sense that small business owners “deserve” a “break.” Small business owners are also more able to get away with various form of discrimination and harassment. Big employers, for all their faults, do have institutional checks and balances, and HR departments, that ensure that at least some compliance with the civil rights laws is provided for. But a small business owner is his own HR department, and, again, enforcement efforts are not typically aimed at him. Many small business owners are also blowhards, who feel that they “made it on their own,” and act like petty tyrants to their workers. Many small businesses do not even pay the minimum wage, or make the proper deductions and co pays, by paying workers “off the books.”

Most new small businesses also fail, leaving employees, creditors, landlords, suppliers, customers and the public in the lurch.

And, in this particular case, it may be that the internet has simply destroyed the niche which small, city bookstores, once occupied. No small brick and mortar store can possibly compete with the internet in terms of price and product choice, when it comes to books. Even bookstores in out of the way places, where operating costs are cheaper, get by as much on internet orders as they do on in stores sales. The argument based on libertarian economics applies across the boards, and, to the extent you think it is valid, its validity is across the boards as well. Plenty of big employers complain about minimum wage laws too, and they make the same arguments as are being made here (can’t survive/job loss, free choice for the workers, etc). And I doubt the self serving statement of the bookstore owner that all of his workers are “happy” with a low wage.

If small bookstores are to get special treatment, I would prefer that the government just flat out admit it, and offer them cash subsidies. Rather than give them exemptions from labor laws.

#9 Comment By cash On May 2, 2015 @ 12:13 pm

So millions of low-wage employees who lack bargaining power with their employers should continue to earn chump-change wages in order to keep a handful of boutique-y/craft-y businesses afloat?

Sorry, but as a matter of public policy, I would rather sacrifice comic book stores if that means Wal-Mart and McD’s can no longer force American taxpayers to subsidize their employees’s wages.

#10 Comment By Andy Harsin On May 2, 2015 @ 1:23 pm

A co-op model might work for cases like this.

#11 Comment By Fran Macadam On May 2, 2015 @ 2:24 pm

Of course the wages aren’t livable. I have worked, though, for a bookstore in the past where protestations about paying no more than the minimum wage were accompanied by deception and extreme owner greed. Workers were genuinely being exploited and there was a lot of economic dishonesty concealed, which IT employees who see communications in the course of their work find out about.

But what is to be done when the macro structure of economic global neoliberalism makes it impossible to sustain a population out of poverty? It is those choices that have eviscerated the underlying economic base of good jobs and it is true that the good goal of a living wage in jobs that actually exist is wishful thinking until there are major policy changes.

#12 Comment By Ken T On May 2, 2015 @ 5:09 pm

An employee is an employee. They do not have any less needs just because they work for “small community-centered local businesses who value art curation over raw profit” rather than for “multinational corporations who were exploiting their workers”. Whether the employer is Wal-Mart or Comix Experience, an employee’s cost of living is exactly the same.

This is Capitalism 101 – Labor is a more or less fixed cost. If the business cannot be profitable after paying it’s labor cost, then it is the business (Capital) that must adjust to fit that reality.

That being said, it sounds like that is exactly what these two businesses are trying to do – adjust their business model in order to remain profitable. In other words, they are actually behaving like good Capitalists, even though they are being dragged kicking and screaming into it. Adam Smith would approve.

#13 Comment By georgina davenport On May 2, 2015 @ 5:55 pm

No matter how much they love what they do, unless they have other means of income, they still need money to pay rent, buy food, commute…. If they are not paid enough for all these, then who ended up paying? Uncle Sam, that means, us the taxpayers.

#14 Comment By Jonathan On May 2, 2015 @ 7:50 pm

Excellent blog however:

Minimum wage laws do not make the market freer.

Crowd sourcing is no alternative to the squeeze placed on small businesses.

We miss the point of holding the Federal Reserve’s feet to the fire to hold down inflation to absolute zero. What will it take to end regulatory capture in the Federal Reserve that prevents it from serving the general commonweal by preventing inflation?

#15 Comment By Matthew Lee On May 3, 2015 @ 9:02 am

As a guy who ran a comic book store for a few years, and still consults for comic book shops that are looking to move more business online, I’ll say that I feel for the owners in this story.

That said, book stores in general are a dying industry. There are a lot of them closing, and most of them aren’t closing because of the minimum wage shift. You have to be able to adjust. Your options are either: attract more customers, raise prices to cover costs, or control costs elsewhere.

It looks like they’re already doing that with their book clubs (which are a great idea, btw). So I’m not sure exactly what the story is here. “Small business adjusts to changing economic situation,” is kind of a “dog bites man” story isn’t it?

But more to the point, why would people consider stores like Walmart or McDonalds “evil” for not paying employees a living wage but make an ethical exception for small businesses? Exploitation is exploitation, regardless of scale.

#16 Comment By EliteCommInc. On May 3, 2015 @ 9:12 am

How disapointing. Itis obvious how the minumum wage damages all small businesses. The passage into a law of a minimun wage places creates downward pressure on any businesss that cannot afford to employ enough people to staff it’s needs.

It also udermines the efficacy of fluctating economies. The small enterprise in Pohkeepsie where the economy is significanly lower than Chicago has hiring standards, based on it’s local economy, not some fedeeral or state authorized arbitrary mean.

Those of making the advance that government should not be responsible for keeping a small enterprise in business should consider that your argument is undermined by the attempt by government to sustain the economy, and large busiesses by moentary policies that artificially manipukatethe same, blurring the real market reality.

A guaranteed minimum wage supports a a sysytm in which top earners corner market systems. The same corners are the mechanisms by which a small competittor gets squeezed out on offering competetive book prices.

Attempting to make a case that there is something amiss with a business that would be unable to afford to staff property based on meeting an arbitrary number of cost of living is an unreasonable and worse, unsound economic model. It says that despite the economy, an organization cannot fluctuate it’s compansation to adjust, private enterprise is dependent on adjusting to market forces, not merely meeting some static unrealistic government target for which the government itself is not subject to.

The onky way around the crazy minimum wage game is to hire employees as contractors in which the wage agreement leaves the contractor responsible for taxes and health packages.

And while liberals don’t seem to be concerned about the economic and social impact of illegal immigration — many citizens and minimum wage laws undercut their viability of hiring US employees.

#17 Comment By Damoj On May 3, 2015 @ 9:39 am

“Most small businesses I know work incredibly long hours for relatively little pay, because they do it for love and passion first and foremost.”

This is creepy, almost fascistic perspective, assuming it’s not a grammatical error. A business is not an individual, and it cannot “work long hours.” There are employees, and then there are owners, and the vast majority of the long hours are worked by employees who have no equity in the company. They will receive no money if the book store shuts down, no share of the back profits, and in most cases not even a few months notice so they can look for other jobs.

The factory owner can feel love and passion for their business, but defending low wages for workers based on the interests of the owners is cynical.

#18 Comment By La Lubu On May 3, 2015 @ 9:54 am

So….what you’re saying is that small businesses are going to start experiencing the same difficulties making ends meet that their current (low-wage) employees are experiencing? Do tell.

In the meantime, check out some of these awesome 7’x5′ closets [5] for a mere $700-$750 a month! (if you’re really hard pressed, you can rent a top bunk for $360).

Those cute bookstores, or restaurants, or coffeehouses, or neat shops, or whatever in the city? This is how the people who work in them are living. I guess they could have “stayed put” in their smaller cities/towns, and not bothered with that whole “job” thing—but that has even less of a future.

To be blunt, these shops are catering to a rapidly-dwindling middle class on the backs of people who are barely—or not at all—scraping by. Looks like that banana-republic economy isn’t working out so well for small shop owners, either. This business model is failing because the customer base is shrinking, and the high cost of housing means less disposable income.

(psst! where are the lectures to these business owners to pack up and move to small towns or smaller cities? doesn’t that seem more workable than telling the rest of us to “stay put”, suck it up, and be satisfied with spotty employment?)

#19 Comment By Colorado Jack On May 3, 2015 @ 3:50 pm

It does not seem to have occurred to the bookstore owners to cover their increased costs by increasing prices. Their immediate competitors are also facing increased wage costs, so it may be quite practical to increase prices. Maybe the demand is too price-elastic to permit this, but they can’t know that in advance. And if some of them do have to go out of business, that will make it more practical for the survivors to raise prices.

#20 Comment By Mason C. On May 3, 2015 @ 10:18 pm

It is all well and good to say that businesses which cannot adequately respond to market or regulatory pressure should go under. But let us not be naive. No business can increase wages without cutting costs elsewhere. Large companies will cut costs by decreasing the quality of their product or by cutting wages of employees in other areas and thus “subsidizing” the higher wage rates in San Francisco. This is especially true for any company involved in retailing products which take advantage of the already existing and significant wage disparities between developed and undeveloped nations. Walmart was already paying its American workers far more than it paid its Asian workers before the minimum wage increase. Expanding that disparity will not end their business. That disparity is their business. Walmart couldn’t sell products at “rollback” prices if they were paying American laborers to make those products.

But locally owned businesses don’t have the option of paying employees in Omaha less than they pay their employees in San Francisco. They only have employees in San Francisco. Nor can many of these stores take advantage of the wage disparities a global economy makes available. The whole point of many of these businesses, say a local bakery, is to make what they make on site, not in china or through industrialization.

And book stores are in a particularly dangerous place because in addition to being unable to create wage disparities or take advantage of existing wage disparities they cannot significantly alter the quality of their wares or the nature of the experience they offer because their wares and experience is why people buy books at local bookstores. The curated, physical experience of a good bookstore, lazily reading through titles until you find that exact hidden gem which you never knew you wanted until you saw it sitting there between Hegel and Homer, is precisely what differentiates local bookstores from Borders or Amazon. If they only sold mass market “NYT Bestsellers” or moved their stock to a warehouse and sold the books online they would have no modus operandi. Nor can they significantly increase the cost of their wares. How much can you charge for an old copy of Chaucer surreptitiously found while looking for a biography on Malcolm Muggeridge before people will just buy the biography online and never find the Chaucer?

If we will not make economic and regulative space for people who love to sell books, who sell books even though it means they can’t afford every material possession advertisers try to cram down our throats, because we think everyone should be able to afford the consumerist’s vision of the good life, then we deserve exactly the kind of barren, corporate, heartless cities which will develop as a result.

#21 Comment By Grumpy realist On May 4, 2015 @ 7:45 am

If their margins are that low, and people are really involved in this area out of pure “love of the profession”, then a for-profit business is not the structure they need. They should close doors and open as an educational non-profit or something similar.
If your business plan can only survive because you pay your employees minuscule salaries, what you are doing is leaching off their labour.

#22 Comment By Escher On May 4, 2015 @ 9:08 am

Large corporations have an inherent advantage over small businesses through economies of scale, the finances to bear losses for a longer period and the ability to move out elements of their business to lower cost regions. Small businesses in San francisco will suffer a crushing blow due to this misbegotten legislation. Let the market determine wages, not the wooly headed limousine liberals who run the city.

#23 Comment By philadelphialawyer On May 4, 2015 @ 11:42 am

Online booksellers do allow a reader to browse, and have more out of print, odd and old books than any physical bookstore could possibly stock. And they charge a pittance for most used books, and much, much less than used bookstores charge. The model of the small, quirky, intelligently “curated” bookstore is simply no longer a profitable one, and that has nothing to do with large corporations, economy of scale and so forth, but is simply a matter of technology.

Indeed, large, chain bookstores are in deep trouble too. Borders, mentioned above, went belly up close to four years ago. B and N is closing stores as well. Bookstores also cannot, unlike a manufacturer, simply offshore their jobs. They have to hire folks who live somewhat near the stores. And so the arguments being made along those lines don’t apply here either.

“Small businesses in San Francisco will suffer a crushing blow due to this misbegotten legislation. Let the market determine wages, not the wooly headed limousine liberals who run the city.”

Head in the sand. If the “free market” resulted in wages that could support a decent lifestyle for the workers who live near their jobs, there would be no impetus for local minimum wages. But it doesn’t. And working class folks, not just “liberal,” “limousine” or otherwise, support minimum wages. A few marginal jobs at marginal businesses may be lost, but the overall result of such laws is that working class people live better lives. Most will survive quite easily this “crushing blow,” and, simply pass the cost on to their customers. Which means that the limousine liberals, and the limousine conservatives and limousine moderates too, will simply have to pay a little more for their restaurant food, their gee gaws, and so on.

#24 Comment By cfountain72 On May 4, 2015 @ 12:27 pm

I don’t believe the workers in this fine city are required to live/work in a place with such a high cost of living. Minimum wages aren’t part of any true free market. As the owner says, shouldn’t people be able to work for whatever wage they agree to? If this place closes down due to this $15/hour requirement, the alternative appears to be a $0/hour wage…

Peace be with you.

#25 Comment By deanosaur On May 4, 2015 @ 12:48 pm

The min wage increase is real enough, but its nothing compared to rent increases in the city. Its routine to hear of rents doubling and tripling one year to the next. This guy must be sitting on a sweetheart lease if a 20% wage increase is his main cost concern.

Along with many, I miss the leisure time I spent browsing bookstores. But it’s a habit I’m unlikely to pass along to my kids. Toting boxes of books back and forth to the bookstore was like fetching water from a well. Digital books, cloud storage, and electronic readers are awesome.

Thinking of bookstores is like thinking of old childhood friends. I might have a momentary pang of sadness and loss, then I move on. For sure, I won’t miss the cupcake store that replaced the bookstore nearly as much.

#26 Comment By Fran Macadam On May 4, 2015 @ 2:16 pm

How do online used booksellers get their supplies of used books? They sure aren’t getting them from their customers…

#27 Comment By Mason C. On May 4, 2015 @ 2:23 pm

Philadelphia lawyer, Thank you for your response.

If I may add a few thoughts to clarify the things I was trying to say earlier. The first is that the income inequalities which the minimum wage hike was intended to solve will not solve them. The inequality comes from the imbalance of political and financial power between large corporate interests and local interests. Increasing the minimum wage will do nothing to address this fundamental problem. In fact, it will only increase the disparity between corporate interests and local interests because the corporate interests are better suited to raising wages locally (either in a single city or in a single country) without suffering any ill effects. So the “solution” to the “problem” is merely a quick fix for a symptom of a much larger disease, a quick fix which will ultimately add to the underlying problem by acting to drive out smaller, local businesses, thus increasing the market share of large, national or global businesses who can afford the wage increases, thus increasing their financial and political power and propagating the system which gave rise to the wage inequalities to begin with.

And second, local communities, whether a small town or a few city streets, need local businesses. They need them not just because they need artesian breads and quirky books, but because it is by developing relationships with local store owners and patrons that communities are knit together, or at least it is a significant and important way communities are knit together. Locally owned businesses offer this kind of community networking in a way corporate businesses, even ones managed by caring and community minded individuals, cannot. Corporately owned businesses must operate on a bureaucratic model (bureaucratic in the social science sense, meaning they operate in a way that ignores local context, opting instead to treat all individuals and situations identically.) Local businesses are free to donate to local radio, sponsor little league teams, give generously to religious institutions, or participate in local politics in a way corporate businesses find difficult because of their (real and understandable) need for managerial and legislative regulation or lack of interest. Of course you might say nothing is keeping the manager of the local target from coaching the boy’s basketball team, but regulation does keep him from using store funds to do so, and every step he has to go through to approve charitable giving means less managers go through to process, meaning that statistically fewer managers of target will coach little league teams.

And finally, I am surprised by the number of readers who are defending free-market capitalism. If all we are trying to conserve as conservatives is the right of free enterprise to do whatever it D*** well pleases. If we cannot see the value of bookstores because we are so enamored with the technocratic march of our society, then fie on our conservatism.

#28 Comment By philadelphialawyer On May 4, 2015 @ 5:26 pm

Mason C:

Thank you for your response.

On the first issue, I think a high minimum wage is actually a crucial step, and very effective. Businesses, small and large, should be forced, if need be, to pay a living wage to their employees. Work, and most people will always be employees, not business owners, must be made to pay, and no employer, not Walmart, not McDonald’s, not McDonald’s franchisees and not small bookstores, should be allowed to offload the cost of their employees’ being able to live a decent life on their earning onto the government.

Secondly, as you can tell from my first post, I have no love for small businesses qua small businesses. I won’t rehears all of their, in my view, defects again. But I will say that corporate employers do many of the same good things that you claim small businesses do….they sponsor charities, and children’s athletics and so on, and frankly, I think local businesses tend to dominate local politics in ways that are not particularly good for anyone but themselves.

Finally, while I am no dogmatic free marketer (far from it!), and happen to personally love little bookstores, the fact is that in this instance technology does simply make them obsolete. I don’t have an unlimited amount of money, and I just can’t justify to myself spending 3 to 4, or more, times the amount an online bookseller charges at a small, quirky bookstore for the same book. And throw in the fact that the online bookseller has many, many more titles and copies. Beyond that, if one online bookseller does not have the book I want, or seems to be charging a lot for it, there are always other ones, and I can check them all, in comfort and convenience, from the same computer on the same desk in my living room as I am typing this sentence. We should not be mindlessly “enamored” of technology, but we should not be luddites either. When new technology can deliver the goods better and cheaper, we should not pretend that that is not so. I will repeat, however, that if a community thinks having a small bookstore around is so important, then it should consider subsidizing it directly, rather than asking the workers to subsidize it through non living wages. Or folks outside the community to subsidize the business by paying for Food Stamps, etc, for the employees out of general Federal or State funds.

I would also add that I don’t much like corporations either, and am in favor of strict public oversight and control of their activities as the price they have to pay for the use of the corporate form. And I also favor a greatly expanded public sector. So, while I disagree with you about small businesses, I do share your concerns about large ones.

#29 Comment By philadelphialawyer On May 4, 2015 @ 5:41 pm

Fran Macadam:

“How do online used booksellers get their supplies of used books? They sure aren’t getting them from their customers…”

Actually, many booksellers do buy books from the general public. Others buy books from middlemen who buy them from the public. Books now have “ISBN” numbers, and many firms will pay you to ship to them, at their expense, certain books that are in high demand. And the ISBN number allows these merchants to identify precisely what books they want, and communicate to the public which books are in demand, and what each is worth, and so on.

Booksellers also get their books from thrift stores. Some of them buy big lots of books from these establishments, others pick and choose. Charities, particularly charities that run used book stores, also will sell certain, high value used books to booksellers, rather than try to retail them themselves. The wholesale price, if it is high enough, plus the immediate conversion into cash, makes it worthwhile to the church, etc, to unload the book immediately.

Booksellers also get their books from flea markets, garage sales, and library sales. And from estate sales, and from people who are hired by estate administrators to clear out houses and apartments. And by self storage places in which books have been left but the storage charges are no longer being paid.

Finally, booksellers also get their books from used bookstores, believe it or not! Usually, these are the smaller online operations, and they tend to look at the “dollar” or “clearance” tables for bargains.

Just out of curiosity, what was the import of your question?

#30 Comment By mojrim On May 4, 2015 @ 8:11 pm

The book and comic market is somewhat unique in that pricing is inelastic compared to the costs of doing business, of which wages is a relatively small part. Publishers set prices, right there on the cover, making revenue fixed to volume with no ability to flex prices up or down with market changes. Given how marginal bookstores have become these days it should be no surprise they go under with even the slightest cost increases.

Most importantly, no larger lesson can be drawn from this.