There will be a lot more of this. A lot!
Important story from the most leftist city in America.
Independent bookstores have faced tough times for quite a while. In San Francisco, neighborhood businesses have been passionately protected, so it’s hard to believe that an initiative passed by voters to raise the minimum wage is driving a Mission District bookstore out of business.
San Francisco’s minimum wage is currently $11.05 an hour. By July of 2018, the minimum wage in San Francisco will be $15 an hour. That increase is forcing Borderlands Bookstore to write its last chapter now.
[…]Borderlands was turning a small profit, about $3,000 last year. Then voters approved a hike in the minimum wage, a gradual rise from $10.75 up to $15 an hour.“And by 2018 we’ll be losing about $25,000 a year,” he said.
It’s an unexpected plot twist for loyal customers.
“You know, I voted for the measure as well, the minimum wage measure,” customer Edward Vallecillo said. “It’s not something that I thought would affect certain specific small businesses. I feel sad.”
Though it’s caught a lot of people off guard, one group that wasn’t completely surprised was the Board of Supervisors. In fact, they say they debated this very topic before sending the minimum wage to the voters.
“I know that bookstores are in a tough position, and this did come up in the discussions on minimum wage,” San Francisco supervisor Scott Wiener said.
Wiener knows a lot of merchants will pass the wage increases on to their customers, but not bookstores.
“I can’t increase the prices of my products because books, unlike many other things, have a price printed on them,”Wiener says it’s the will of the voters. Seventy-seven percent of them voted for this latest wage hike.
Let’s review the facts on minimum wage, and then I can make fun of one of my friends in my conclusion.
Abstract from new National Bureau of Economic Research study:
We estimate the minimum wage’s effects on low-skilled workers’ employment and income trajectories. Our approach exploits two dimensions of the data we analyze. First, we compare workers in states that were bound by recent increases in the federal minimum wage to workers in states that were not. Second, we use 12 months of baseline data to divide low-skilled workers into a “target” group, whose baseline wage rates were directly affected, and a “within-state control” group with slightly higher baseline wage rates. Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation. Methodologically, we show that our approach identifies targeted workers moreprecisely than the demographic and industrial proxies used regularly in the literature. Additionally, because we identify targeted workers on a population-wide basis, our approach is relatively well suited for extrapolating to estimates of the minimum wage’s effects on aggregate employment. Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.
That comes out to 1.4 million workers.
Harvard economist Greg Mankiw explains the top 14 views that a majority professional economists agree on, and here’s #12:
12. A minimum wage increases unemployment among young and unskilled workers. (79%)