How Raising the Minimum Wage Hurts Small Bookstores
A couple months ago, I wrote about a bookstore in San Francisco 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:
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. 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 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).
GO: What 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, 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.
GO: Is 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.