San Francisco Mayor Ed Lee recently put forth a ballot measure to raise the minimum wage to $15 an hour by 2018. That means a 40 percent increase over four years. This has many of us in the small business community very concerned and frustrated. Concerned because many of us can't see how we will be able to sustain such a high starting wage.
Concerned because we are worried about the unintended consequences, and there will be consequences. Concerned because this is really going to hurt the vitality of the small and interesting businesses that constitute so much of what makes San Francisco special.
Frustrated because even though so many of us gave up hours of our lives away from our businesses to give the mayor feedback this spring on the proposal, it feels like we weren't heard. Frustrated because we asked for safeguards to protect small and micro businesses and got nothing.
Frustrated because we asked for the increase to be implemented over a longer period of time and it is being rushed. Frustrated because we work so hard to support our employees and our communities and our city and we are treated like we have unlimited resources.
Frustrated because the mayor's office tells us we are supposed to cover the increase by raising our prices but doesn't account for Amazon and Google Express and customers checking prices with smartphones. Frustrated because we want to take care of our employees but might not be able to anymore.
For Cliff's Variety, the store in the Castro my family has owned and operated for nearly eight decades, this increase to the minimum wage will, for the first time ever, turn us into a minimum wage job. And after having run the numbers, without making drastic changes, we won't be making a profit in less than a year.
We don't want to lay people off, we don't want to cut our benefits, and we don't want to raise our prices, but what are we supposed to do? Is this going to change how my employees feel about their job? Are my higher-end employees going to feel cheated because all the resources are being expended on the new hire?
I have spent countless sleepless nights trying to process how we will take care of our people, and I don't have answers.
We have always prided ourselves in taking care of our employees. We currently start at $12 an hour. After a probationary period we provide, at our cost, 100 percent health insurance, 50 percent dental insurance, 100 percent long-term disability insurance and 100 percent life insurance, and employees start accruing sick pay and vacation pay.
We have a profit-sharing plan that after three years sets up a SEP-IRA for employees so they will have something for retirement. We realize this is a retail job with retail wages, so we do things like give our employees set schedules and sell to them at our cost.
We want them to be able to count on a predictable paycheck and have a life outside of work. Our average employee has been with us for 14 years, and I'm sure you can think of a few that have been here much, much longer.
How am I supposed to pick and choose which benefits they no longer are going to receive? Medical insurance goes up astronomically every year, should we only pay a percentage of it, or a flat rate? Well that doesn't seem right; my average employee is well over 50 years old. Do you have any idea how expensive insurance is for a 50-year-old, a 55-year-old, or a 60-year-old?
Vacation pay isn't mandated; should I cut that? Well that doesn't seem like a very good idea either. Our employees work really hard and they deserve a break.
The reality is we are going to have to work out options and let them choose, because it all just feels so ugly. And if it is this ugly for us, what is it going to do to the other shops in the Castro?
It seems inevitable that the voters will pass this ballot measure. So all I can do is ask these same voters to make conscientious choices to shop at small local businesses and increase their local spending by 20 percent.
By each and every one of you committing to shop at small local businesses and to increase that local spending by at least 20 percent, then the worst case scenarios can be avoided. But it means you have to change too.
If you want the corner store to be there for you, you need to be there for them. If you want all the quirky shops to survive, you have to spend your money there.
If you can't commit to this then you should think really carefully about why you are voting for this proposed ballot measure.
Terry Asten Bennett is the general manager at Cliff's Variety, which her family has owned and operated for 78 years on Castro Street.