NCPA - National Center for Policy Analysis

Minimum Wage Hurts Small Business in San Francisco

May 5, 2015

San Francisco's Proposition J, which 77 percent of voters approved in November, will raise the minimum wage in the city to $15 by 2018. As of May 1st, Brian Hibbs, owner and operator of Comix Experience, is required by law to pay his employees $12.25 per hour. That is just the first of four incremental raises that threaten to put hundreds of such shops out of business.

'I'm hearing from a lot of customers, 'I voted for that, and I didn't realize it would affect you.'" Says Brian Hibbs.

Hibbs opened Comix Experience on April Fools' Day, 1989. Over two-and-a-half decades, the store has become a must-visit location for premier comic-book artists and graphic novelists. He notes with pride that his store has turned a profit each year - no small task - since its very first year. But that may not last. The $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually.

Hibbs runs a tight operation already. He is not the first person to encounter this problem. On February 1st, San Francisco's renowned science-fiction bookstore Borderlands Books published an announcement that they will be closing their doors no later than March 31st due to the cost added by minimum wage law.

"Despite being a progressive living in San Francisco, I do believe in capitalism. I'd like to have the market solve this problem." That applies not just to Hibbs's plight, but to the question of the minimum wage. "Why," he asks, "can't two consenting people make arrangements for less than x dollar per hour?"

And the problem goes deeper still. While forcing hundreds of Bay Area small businesses to close, cut staff, or overhaul their practices, San Francisco lawmakers have given multimillion-dollar tax breaks to lure or keep technology giants such as Twitter and Zoosk. It threatens the entire economic ecosystem of San Francisco.

Source: Ian Tuttle, "When Minimum-Wage Hikes Hit a San Francisco Comic-Book Store," National Review, May 1, 2015.


Browse more articles on Economic Issues