After 25 Years of Development Featuring Service Jobs,
Will Emeryville Move to Mollify That Model's Rapaciousness?
Emeryville's business community is assembling their forces to push back against a City Council initiated Emeryville minimum wage proposal, set to be decided by the Council in May. The City will hold a public study session on the subject April 7th. If these meetings are to be anything like previous meetings when the business community has been asked to pay anything more in our town, they promise to be drama filled evenings. The Emeryville Property Owners Association is jumping into the fray; they're planning a public town hall style meeting of their own on the subject March 16th, a chance to "educate" the public sponsored by the business community.
But as these epic Council meeting dates approach, what should Council members expect from our businesses here in Emeryville? The Council will be asking them how they'll do with an increase in the minimum wage. It's not against the law for the business community to lie about the effects the minimum wage hike will have on their businesses, if they even know what the effects will precisely be. Since it's not against the law for them to lie, should we expect them to, especially if by lying they think they might not have to pay as much? Should past behavior by the business community when they have been asked to contribute more in Emeryville, inform us in any way? If they have been found to have lied in the past about the effects of City Hall policy on their businesses, should their credibility be at all effected?
How about the working poor in our midst? Should their plight be considered by the government? Does City Hall have a responsibility to help the poorest people among us? Is exacerbating wealth discrepancy and record inequality OK for a government to do? The City Council has spent a generation saying YES to developers, adding lots of minimum wage service sector jobs in our town; a workforce that can't afford to live here and must commute in from poor parts of Oakland and farther flung locales. Does Emeryville City Hall have any duty to help the legions of these poverty stricken people they brought to work here? If the City has the right to do something about it, should they exercise that right? Is it the government's charge to address this higher calling? Or should poor people in Emeryville just be left to their own devises?
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| Bucci's: A premier local restaurant. The haters among us tell us we can't have nice stuff like this without selling our soul to the devil. So what's it gunna be Emeryville? Redwood trees or jobs? Bucci's or minimum wage? |
Any reasonable person that's not an ideologue knows the answers to these questions. And that's why we think Emeryville will move forward and do the right thing by the poorest among us, because the new Council majority is just that: reasonable and not ideologues.
How High? What Logic?
But how high should the minimum wage in Emeryville be? Some are saying we should set our minimum wage the same as our neighbor Oakland: $12.25 per hour. There is a certain compelling logic to that...but it's a logic based in business marketability. Of course this business marketability argument means we should be driving DOWN the minimum wage, not raising it up. Oakland, it should be noted, is considering another rise in their minimum wage soon.
Again, we need to keep our focus where it belongs; the problem is poverty, not marketability.
Another logic could be Emeryville's minimum wage should be set so a person working in our town could actually live in our town. With sky-high rents in Emeryville, the wage would have to be at least $20 per hour (that's $800 per month at 25% of income at 40 hours per week).
So how high should the minimum wage be? The answer for Emeryville is $14.42 (Consumer Price Index raised from $14.03 after July 1st). That's the minimum amount a person has to make working 40 hours per week, to be ineligible for government assistance; food stamps, housing assistance, et cetera. Anything less than this amount is effectively a wealth transference rate: money being transferred from the taxpayers to business owner employers. It's yet another government subsidy for business.
Poverty Wages or Sub-Poverty Wages
A wage of $14.42 is a poverty wage, let's not mince words. A person making this wage will almost certainly not be able to afford to live in our town. Every cent is earmarked for basic survival. This person is not making enough to provide for a family. If Emeryville sets the minimum wage at less than $14.42, we are delegating a class of us to exist in sub-poverty conditions, surviving on government handouts. Sub-poverty; that's the badge of dishonor we're going to have to wear regardless of any vows we may have made regarding the responsibility of government.
Is Emeryville a City of Non Viable Businesses?
As one would expect, this talk of raising the minimum wage has caused the business community in Emeryville to run around with their hair on fire. The talk has been pretty heated; they're going to have to lay off their workers or go bankrupt they're now telling us. They're forming coalitions to fight the wage hike, with big business hiding behind small business. We heard it, full throated at a recent Council meeting, the minimum wage on the agenda; $14.42 will kill them they say. By this, what these businesses really mean is they can only afford to pay sub-poverty wages to their workers.
But any business in our midst that can't afford to pay anything but a sub-poverty wage to their employees is not a viable business. By definition; that's not a viable business. They're in effect saying they have business plans that lock them in and they must oppress their lowest paid employees. Emeryville, they want us to believe, must be a locus of suffering and oppression. If this is true, these are the kinds of businesses we don't want in Emeryville. This is a description of a sweat shop.
After a generation of our City Hall bringing lots of development with lots of low wage service sector jobs like fast food and retail, we must remember we created this mess ourselves. Are we going to now make it a one two punch; first community busting development then oppression against workers? Is that who we are in Emeryville?
Or is Emeryville a City of Viable Businesses?
So far, the businesses in Emeryville have been pretty adamant; they say they can't afford to pay their workers these higher wages. We must consider that these businesses might be lying (or they don't really know). It's not like we've never seen business in Emeryville lie before. Indeed, the loudest screamer against this among business owners so far has been John Tibbets, the owner of the Oaks Club gambling casino on San Pablo Avenue. He's told the Council he will be driven out of business by a $14.42 minimum wage. Driven out of business... interesting... that's also what he told Emeryville voters in 1997 when he railed against Emeryville's Measure B, the card room tax increase ballot initiative. Of course, that turned out to be a lie.
Then of course there's also Measure C, the 2005 'living wage for hotel workers' ballot initiative. Emeryville's hotels all said they would be driven out of business if they had to pay their workers more money. Incidentally 2005 is when there were four hotels in town, now, after Emeryville voters passed Measure C, we're starting construction on hotel number five. The hotel owners we now know, were lying.
When it comes time for businesses to pay more to their workers, lying is the default go to place for many. It's no shocker. But what will really happen if Emeryville raises the minimum wage to $14.42? There have been many academic studies done on this subject over many years. We're not suffering from a lack of scientifically obtained data. We know that there will be some difficulties for businesses at first as they adjust to the new wage standards. Prices will likely go up for some of the customers of some of the businesses as they re-coup the higher wages and then a stasis will again be achieved... except the new paradigm will mean people in Emeryville will be making more than sub-poverty wages and our values won't be undercut. We also know people have seen enough oppression of the working poor; higher minimum wages and raising up the lowest paid among us is very popular with voters, both in Emeryville and across the Nation.
Hucksters Selling False Choices
Whenever it comes time to do something for the least fortunate among us, the oppressed, the dispossessed, you can count on it there will be those lecturing us on how unrealistic it all is. We're told we need to be pragmatists; sure we may want to do something about the terrible inequality brought on by a sociopath's view of the role of government and a rapacious private sector, but we're always told not now, not in this way and not if it may cause inconvenience to business or even worse, money. This time in Emeryville has been no different. Besides all the poor business owners, some citizen ideologues too have piped up: This will kill small locally serving business we're being chided. Raising the minimum wage will be a boon to the biggest businesses because they can afford it. The small desirable resident friendly businesses, some might say competition to the big business, will be driven out they say. So raising the minimum wage presents a choice we're told. We can have Bucci's restaurant or we can have a raise in the minimum wage. We can have Farely's coffee shop or we can have a raise in the minimum wage. We can't, apparently, have both.
Redwood Trees or Jobs, Bucci's or the Minimum Wage
Emeryville of late is feeling a little like the days of capitalist junk bond financier Charles Hurwitz who in the 1980's acquired Pacific Lumber Company and then said the debt incurred by the leveraged buy-out made the clear cutting of all the rest of the old growth redwood on Pacific Lumber's vast holdings necessary. Californians were given a Hobson's choice by Mr Hurwitz: jobs or redwoods.
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| 1980's Junk Bond Financier Charles Hurwitz He brought it down to a choice: We can have redwoods or we can have jobs. We can't have both. It was an effective tactic that dramatically increased his bottom line. It's a tactic now being repeated by some in Emeryville. |
We have our own choice we'd like to forward: Should we listen to scientists on the effects of raising the minimum wage? Or should we listen to the people with money at stake and their apologists? Who's more likely to be lying?
With our new City Council majority seated, we're not going to listen to these nattering nabobs of negativity. Emeryville is going to increase our minimum wage so the working poor no longer earn a sub-poverty wage at one of the many retail and fast food establishments we've built over the years here. And we're not going to leave anyone behind with special exemptions or carve-outs in our new polity. All are going to be lifted out of sub-poverty. We may allow small businesses in town some extra time to ramp up to our new minimum wage. But we're all going to get there because while we may have made terrible choices in Emeryville in the past, the choices we make now are not going to be the one's ginned up by the business community, they're going to be the real choices for the betterment of our whole town.
You can't just randomly waive a magic wand and eliminate poverty. Give everybody a raise! That sounds good. Can't you see the how this won't work? The economy has to grow to raise up wages like this.
ReplyDelete"The economy has to grow to raise wages"...yeah, except for the fact that the opposite is true: as the economy grows, the wealth disparity grows. It's been a trend for 40 years, ever since the republican party got a bad case of trickle down anti-Keynesian-itus.
DeleteThere should be no place in this town for businesses that rely on government assistance to make up for low wages paid to their employees. If a business can't get by in Emeryville without gifts from taxpayers, let it be replaced by a business that can.
ReplyDeleteGood point Will! Businesses should be able to survive on their own without taxpayer bailouts. Let's make 'em adhere to their own 'invisible hand' market principles they constantly tout as some sort of indisputable inherent good.
DeleteI have no doubt that the Emeryville City Council is well intentioned. But you have to ignore a lot of research to imagine that the primary impact of raising the minimum wage will be to improve the lives of the working poor. The US government has studied it a lot...
ReplyDeleteMinimum wage workers are not primarily those living below the poverty level. They are primarily young employees entering the workforce and others adding extra income to families already significantly above the poverty line:
According to the non-partisan Congressional Budget Office: "...many low-wage workers are not members of low-income families. Just 19 percent of the [increase in wages as a result of raising the minimum wage] would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three time the poverty threshold." (http://www.cbo.gov/sites/default/files/44995-MinimumWage.pdf)
Minimum wage workers are primarily young workers as they enter the workforce. According to the US Bureau of Labor Statistics: "Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage" http://www.bls.gov/cps/minwage2013.pdf
So, if this proposal is not going to make a substantial impact on the working poor, what might be some of the unintended consequences?
- It might push blue collar and entry level jobs out of our community and into the surrounding areas accelerating the already rapid gentrification of Emeryville (is that the goal?).
- It might drive small businesses out of the community to be replaced by national chains (more Bay Street?)
- It might make it very hard for our young people to get local jobs as they are forced to compete with employees from every surrounding city for fewer and fewer entry level positions.
- It almost certainly will drive up the cost of basic goods making Emeryville even more difficult to live in, particularly for the working poor (again driving the city toward complete gentrification)
When we look at cities thoughtfully considering similar minimum wage measures, they seem to have a pretty good process: they talk about it a lot, they get a lot of input from the community and businesses, they ask the public to vote, they make small changes spread over a reasonably large amount of time, and they carefully design the law to protect small businesses, non-profits, and youth. Emeryville is managing to avoid almost all of these steps.
Here's an interesting question no one knows the answer to: "What happens to a successful little one-mile city surrounded on all sides by competing communities when it raises the minimum wage 60% with two months notice to be the highest in the nation?"
It's a great little experiment. But, despite its good intentions (and the road they pave), I'm not sure we want the Emeryville City Council volunteering us for duty as guinea pigs.
Bravo to you for at least doing some homework. The CBO does in fact conclude that 19% figure however, that conclusion is not taken from our Emeryville demographic, rather it's taken from the nation as a whole with it's high percentage of families with children. Emeryville and the surrounding community deviates substantially from the nation in this critical area since there are so few families with children (children under 18 make up only 9% of our population). It is the teenagers living with their families that work at fast food restaurants and such that skew the numbers to bolster your argument. We don't have those teenagers here. Here it's a preponderance of single mothers and two person households that are making this meager minimum wage income. How do we know this? There's lots of census data on it and there are many studies that document this with specificity to the urban Bay Area, Emeryville even. So, you've left out a critical piece of information in your calculation. In fact it's so critical that it overturns completely, your conclusion.
DeleteWe know small business won't be "driven out" from a plethora of scientifically generated data in studies. This is the kind of data elected public officials MUST use. Because ignorant opinions on this subject are rampant and not fact based and because of the corrupting influence of money, those charged with generating public policy should not delve into that swamp, rather decisions should be based on information from disinterested parties. It's analogous to the Global Warming debate: the decision makers can listen to the interested oil industry executives or the disinterested climate scientists.
If you look at the census data, we have a lot fewer people living in poverty than the national average and a much higher average wage. You mention that we have far fewer children but a preponderance of single mothers? While I guess it's possible, it seems highly unlikely that we have far fewer children and far more single mothers. Can you give some stats and a link to your source?
ReplyDeleteAlso, could you point to just one study from the 'plethora' that describes a case study of a city about one mile across surrounded by competing cities with lower minimum wages in which small businesses were not driven out? I think you're referring to the science that says that when states or the nation change the minimum wage, there is not a significant change to businesses (or to the buying power of minimum wage employees for that matter). That's why this is normally addressed on a national or state level. When consumers don't have a choice because the entire region is playing by the same rules, your studies apply. But if you raise the prices dramatically on one block and keep them lower on the next, it doesn't take an economist to know what will happen.
You'll be hard pressed to find a scientific study that says what happens when a city one mile across and with competing cities with lower minimum wages on every border raises its minimum wage unilaterally 60% with two months notice. It's never been done.
And for good reason.
Emeryville's minimum wage is going to be paid to people that commute in as well as residents. West Oakland is the source of many workers in Emeryville. You can find out a lot from this site: http://www.irle.berkeley.edu/
DeleteYou can follow links to read as many studies as you have the time for. Remember, this info is not some blowhard from Emeryville spouting off about how our town will be destroyed, rather the info is from disinterested parties using the scientific method. And on a side note about Emeryville blowhards, we heard from them en masse last time we raised our minimum wage in 2005. It was the 'living wage for hotel workers' aka Measure C. It raised some workers wages to $11 per hour and most to $9 per hour. The blowhards all told us the wage increase would mean Emeryville hotels will not be able to compete because they'll have to raise rates for the public and being a one square mile town, customers will go elsewhere. Some of the exact same blowhards back then are spouting off now, predictably. Might you be one of them?
Anyway, our hotel industry was going to be destroyed if Measure C passed (it did pass). That was when Emeryville had 4 hotels...now, we're going to have 5 hotels...a new one is being built. Adding to the number of hotels isn't what any reasonable person would call a destroyed hospitality industry.
Just so you know, Berkeley raised their minimum wage and it didn't drive out their businesses...what it did was cause Oakland to raise theirs and now Emeryville to raise ours. Now Berkeley is thinking of raising theirs again. That's what we're trying to do; increase economic and social justice. You're opinions on raising the wage and casing an exodus of business isn't supported by the data. It's just bloviating like what was done with Measure C. You're offering no evidence as to why we should listen to you and not the scientists who have actually studied this.
Wow! You made that personal really fast.
ReplyDelete- You ask for comments on your site, but you don't want them.
- You say you want data. It was given to you with nice links and quotes.
- You were asked to show us your 'science'. You didn't.
- You said that no evidence was offered, but it was.
- You were spoken to politely, and you couldn't return the favor.
If it upsets you to have people comment on your blog, you should save yourself the headache of entertaining other people's ideas. Just turn off the comments section.
If your goal is to improve society and make it more civil, you might start with a little introspection about your manners. That could be done without risking Emeryville's well being.
I'll give you the last word. I'm outta here. Have a good weekend!
OK, I'll take the last word (unless you change your mind).
DeleteTo address your concerns;
I use the term 'blowhards' because that word accurately fits these people who run around with their hair on fire every time the City talks about increasing the minimum wage in our town. That dictionary definition aptly applies to those people. If someone, especially someone in power uses their position to deny other people their dignity by subterfuge or outright deception, we're going to call them out on it in this blog. I could have used a much stronger word than 'blowhard', so there's nothing personal here.
I'm willing to give you an entree link into the world of scientifically generated studies on the minimum wage and let you peruse that on your own. I'm not going to do all your research for you or to be at your beck and call. The studies on how the minimum wage effects businesses is clear. At least as clear as what the studies on global warming say. You're free to deny the scientific consensus if you wish. FYI, there's at least one other blog in town doing that, so you would be in good company if you did.
RE comments; I don't "want" comments on this blog. Conversely, I'm not against comments. You are free to leave them and I'll post them as long as they're not too obtuse or vulgar.
So that's it- same to you: have a nice weekend.
Here is more relevant information regarding the minimum wage...from a recent New York Times story:
DeleteMinimum-wage workers are older than they used to be. Their average age is 35, and 88 percent are at least 20 years old. Half are older than 30, and about a third are at least 40.
These patterns are somewhat new. In 1979, 27 percent of low-wage workers (those making $10.10 per hour or less in today’s dollars) were teenagers, compared with 12 percent in 2013.
They’re split fairly evenly between full-timers and part-timers. Most — 54 percent — work full-time schedules (at least 35 hours per week), and another 32 percent work at least half time (20-34 hours per week).
Many have kids. About one-quarter (27 percent) of these low-wage workers are parents, compared with 34 percent of all workers. In all, 19 percent of children in the United States have a parent who would benefit from the increase.
One in eight lives in a high-income household. About 12 percent of those who would gain from an increase to $10.10 live in households with incomes above $100,000. This group highlights the fact that the minimum wage is not nearly as well targeted toward poverty reduction as the earned-income tax credit, a wage subsidy whose receipt, unlike the minimum wage, is predicated on family income.
Still, a minimum-wage increase does much more to help low- and moderate-income households than any other groups. Households that make less than $20,000 receive 5 percent of the nation’s total earnings, for instance — but would receive 26 percent of the benefit from the proposed minimum-wage increase.Most are women. Women make up 48 percent of the work force yet 55 percent of the would-be beneficiaries of the increase in the minimum wage.
Most are white, but minorities are overrepresented. Hispanic workers account for 16 percent of the work force but 24 percent of those who would be affected by the wage increase. For African-Americans, the comparable shares are 11 percent of the work force and 15 percent of those who would gain from the increase.
They’ve got some schooling, though less than other workers. Of those who would be affected by the increase, 78 percent have at least finished high school, about one-third have some college under their belts, and about 10 percent have graduated from college. By comparison, 91 percent of the total work force has at least graduated from high school, and 34 percent have
As with the population as a whole, low-wage workers are more educated than in the past. In the late 1960s, less than half had finished high school and only 17 percent had attended any college at all.Their earnings are a big part of their family budgets. The average worker in this group brings home half of his or her household’s earnings; 19 percent of those who would get the raise are sole earners. Parents who would benefit from the increase bring home an even larger share of their families’ earnings: 60 percent.