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Saturday, December 26, 2015

Six Months After Passage of Emeryville's Minimum Wage Ordinance: No Decline in Business Viability

More Business Start-ups, Much Fewer Business Closures
All While Lowest Workers See Big Pay Increase

News Analysis
Almost half a year after the passage of Emeryville's Minimum Wage Ordinance, the effect on business viability is revealing itself: slightly more businesses are opening and far fewer businesses are closing.  According to City Hall numbers, there has been no negative effect on business viability in Emeryville despite wall-to-wall prognosticating claims to the contrary made by the business sector last spring.  Predictions of a mass business extinction and exodus were leveled at the City Council in several community meetings conducted and one even foretelling of a crime wave that would be brought on by the increase in worker's pay but nothing of the sort has so far occurred.  In fact, a cogent argument could be made that the implementation of the Minimum Wage Ordinance has actually helped INCREASE Emeryville business viability, or at least business viability has increased in spite of the MWO.

The sunny picture hasn't stopped some in the business community from continuing a dark portrayal of business activity in Emeryville post MWO.  The pro-business opinion blog the E'Ville Eye and its editor Rob Arias spent last spring foretelling calamity and since MWO implementation, used individual business closures as an opportunity to drive its anti-MWO agenda.  Stories of new business openings appearing in the E'Ville Eye in the months since the ordinance took effect, strangely have left the MWO unmentioned.

The new business registrations and business closures tracked by City Hall include all businesses in town, however small business numbers vastly outweigh large business numbers for both start-ups and closures and these numbers have remained quite consistent in their percentage throughout the tracking period.  Going back to April 2014 (the start of tracking as provided by the City's website) and up to the vote on and implementation of the MWO on July 2nd 2015, new start-ups have averaged about 13 per month.  After the MWO took effect, that number has remained very consistent; up slightly at 14 new start-ups per month on average.  The number of business closures however have changed dramatically; before the implementation of the MWO, there were an average of 16 businesses closed per month compared to only four per month since the MWO started.

For sake of clarity, the start-up and closure of residential landlord businesses have not been included in these tabulations because the City separates them for sake of tracking because they don't tax those businesses.  For our purposes, residential landlord businesses are not really germane to the goal of creating a locally serving business community and so we didn't include them.  Notable though, if we had, it would have skewed the number of new business start-ups much higher since the implementation of the MWO, probably because many people are scrambling to take advantage of the rapidly increasing rental prices in Emeryville of late.

It is helpful for understanding to note that the business community also argued vigorously against implementing Measure C, the so called 'Living Wage for Hotel Workers' ballot initiative passed by Emeryville voters in 2005.  The new law called for a minimum wage increase in town up to $9 for some workers and $11 for others (the California minimum wage at the time was $6.75).  Similar predictions were made warning of the destruction of Emeryville's hospitality industry and a mass exodus of Emeryville hotels to Oakland or Berkeley.  Readers should note that was when Emeryville had four hotels.  Now a fifth hotel is under construction at Bay Street.

The numbers below are from Emeryville City Hall:






25 comments:

  1. I'm glad you controlled for other factors in this highly scientific study.

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    1. So it's your contention that the people of Emeryville shouldn't know about this information kept by City Hall on businesses in town? It must be kept secret because it tends to put the right wing anti-minimum wage crowd in a bad light. Is that it? If it supports raising the minimum wage, don't report it? Right?

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    2. FYI The Tattler is not the E'Ville Eye...it's not our goal to keep residents in the dark.

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    3. Nope. It's my contention that you shouldn't link the information to the passage of the MVO when the data doesn't support that. I could similarly point out that the rate of new business licenses has increased since Donal Trump began his presidential campaign. That doesn't mean the two things are correlated, and to imply otherwise is intellectually dishonest.

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    4. Your story doesn't look at any other factors that could have influenced the information. For example, you don't discuss what type of businesses these are. Sole proprietorships were minimally effected by the MVO. That's a factor that needs to be adjusted for. That's just one example.

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  2. That is one lousy analysis.

    The vast, vast majority of businesses in Emeryville have no entry level workers or very few entry level workers. By lumping the tech firms, design companies, accountants, biotechs, plumbers, electricians, real estate agents, etc in with the 10-15% of companies who do 90% of the hiring of entry level workers (restaurants, retail, manufacturing), you hide the MWO's damage. Well done!

    During a rising tide (improving economy), cut a hole in the bottom of a few boats (small local restaurants), watch them sink, and then claim things are better because if you look at all boats as a whole (all businesses in Emeryville), they are rising with the tide. Even worse, claim that the damage you've done is the reason the other boats are rising.

    Sloppy or intentionally misleading as usual.

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    1. Intellectual dishonesty? (assuming you are the same Mr Anonymous as 10:52 PM) The City of Emeryville tracks all (legal) business activity in the town and that information is posted on the City's website for all to see. All the factors you wish to control for to show that the new minimum wage law is destroying the business sector are not done by the City. They've never done that. They track new businesses and closed businesses. Broken out are residential landlord businesses. If it's your contention that nothing can be gleaned, no valuable information can be taken about the relative business health of the City from knowing how many businesses are opening and closing then you're entitled to that opinion. Also, if you feel the people of Emeryville should not be made aware of this information then you should appeal to the City Council to track this info secretly (warning, it might be kicked up to the Supreme Court).
      This business tracking is how Emeryville gages the business climate here...at least the City Council members do that. Many a Mayor's State of the City Address has used this info to make their points about the overall health of the business sector (at least if it's doing well and they have wanted to show that to bolster their image).

      The right wing in Emeryville screamed and yelled last spring that this MWO would push the business community over a cliff...it was an existential threat they said. We now know that thinking was erroneous. How do we know? By looking at the information from City Hall...not by seeing a business here or there close and then drawing conclusions about a wholesale business collapse even if you desperately want to do that for whatever political reasons.

      The factors you wish to control for to keep workers in poverty in Emeryville? Those were not controlled for before the MWO was passed but that fact never stopped us from knowing about the general business viability of our town. We saw businesses close after the onset of the Great Recession and then we saw it recover in terms of many new businesses start up in Emeryville. To say that suddenly, now, because you have a political point to make, this information we've always used is useless is...well, intellectuality dishonest.

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  3. Looking at the businesses as a whole tells us nothing about the impact of the minimum wage because the minimum wage does not impact the businesses as a whole. It affects the businesses that hire entry level workers which is why a study needed to be done to understand the situation before and after. Without that study, people can make ridiculous claims like the ones you are making. So who oppose doing a study?

    You opposed that study vociferously and invented and published a false claim that the California Restaurant Association was behind the petition. Local businesses got together and decided to circulate a petition asking the City Council to actually study the issue before doing something that had never been done before. The cost to do that study was significantly less than the investment of the smallest Emeryville business owner who now has lost his business, but it couldn't be done because the timeline would have impacted the SEIU's efforts in Los Angeles and other major cities.

    The City Council is putting entry level workers into poverty by taking away their jobs. They need to take responsibility for that. We have no useful data in Emeryville to look at (exactly what you fought for), so the best thing we have are individual accounts of businesses closing and laying off their workers. The picture there is exactly what the business community told City Council it would be.

    You and City Council need to take responsibility for the part you played and continue to play in destroying entry level jobs and casting workers into poverty in Emeryville.

    Those pink slips are yours. Own 'em.

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    1. So now we're going to have to move the goal posts to see how the MWO is destroying business in Emeryville says you. Well, you weren’t saying that last spring. Last spring you were telling us we wouldn't have to use a special microscope to see the destruction. It would be apparent to all you said. So now it's got to be qualified...it's hard to see now without special glasses. That kind of rationalizing by the way, is the oldest trick in the book.

      Scientific studies: yes, you're absolutely correct about that. Public policy should be made via measurable metrics, not capriciousness from interested parties. That's why the City Council did use several studies on the subject of raising the minimum wage, not the least of which one conducted by UC Berkeley for local use. But the business community said NO to those studies because they supported raising the minimum wage. That's understandable. They wanted City Hall to pay for a special study to be conducted with input from interested parties; namely themselves... As in: you can trust people with personal monetary gain at stake over disinterested, pointy headed liberal scientists. That's how public policy should be conducted says you. I can understand how that policy is in the interest of the business community in Emeryville but unless you want to posit the 'trickle down' supply side argument here, the public is not served with this kind of subversion. To do what the business community and their lobbyists demanded would be to subvert public policy as an instrument for public benefit.

      Noteworthy and informative here is the voice of Emeryville business: the E'Ville Eye. At first Rob Arias, its editor, was insisting that scientific studies should NOT be used (pointy headed liberal scientists you understand). Later, when the Council started showing that they were using scientific studies, Mr Arias (and the rest of the business community) reversed himself and demanded a study be done (the same one you're alluding to). This is just so much politics. This is not how public policy should be conducted.

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    2. Oh and one more thing- regarding your idea that "We have no useful data in Emeryville to look at..., so the best thing we have are individual accounts of businesses closing and laying off their workers"? The only case of that made public is from the Guitar Center (highlighted in a Tattler story). There the manager laid off several workers in order to drop the number of employees to 55, the cutoff between large business and small for purposes of determining the hourly wage. Unfortunately for those fired employees, the manager at the Guitar Center is a very stupid individual. He didn't read the actual MWO. If he had, he would have noted the number of employees is counted from the average of the previous fiscal quarter. So he fired employees for no reason and he has to pay at the higher $14.44 rate anyway.

      And so to you, we can state unequivocally, public policy shouldn't be subordinate and fold in the face of dishonest employers in town who fancy themselves cleaver smoothies who would try to beat the system. Remember, PUBLIC is in the idea of public policy. City Hall and the people of Emeryville are smarter than the manager of the Guitar Center.

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    3. The City Council decision was neither scientific nor objective. The MWO was a straight-up give to the SEIU, written by EBASE (the local SEIU marketing organization), and designed to meet their objectives, not those of the City of Emeryville.

      The goal posts haven't changed, and no microscope is required. Stop at Commonwealth or Coco Delice or chat with the local restaurant owners. It's that easy. You can leave your microscope at home.

      You were the only person nine months ago that said the businesses were forecasting financial calamity for the City of Emeryville. The businesses were forecasting loss of jobs, business closures, rising prices, and problems for entry level workers. Bingo, that's exactly what's happening.

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    4. Straight up give to the unions...those god damn unions. They're not even trying to hide it. When are we going back to the days of the straight up give to the businesses? It used to trickle down...everyone loved it in the good ol' days when we used to straight up give City Hall to the businesses.

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  4. Bravo Brian; You're the man. Your journalistic insight TRUMPS
    all reasonable thought. You deserve a Pulitzer. Take a bow.
    Truth be known, though, I completely disagree with almost everything you have printed lately.

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    1. You mean the journalistic insight that public policy should be demonstrably in the interest of the public and the public so informed?

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  5. You could be in such a position to influence the public, but you have squandered all good will. Sure the City of Emeryville collects the information. That doesn't mean you are free from all responsibility to analyze it correctly when you report about it. The role of journalists is to honestly and impartially interpret evens and information for the public. By failing to do that, you fail to provide the public with information that empowers us.

    Data analysis has become so ubiquitous in the media and elsewhere, that it appears several of your readers can easily spot faulty analysis. It gives me great pride that my community is so saavy and doesn't settle for second rate information.

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    1. "It appears several of your readers...". Well, that's pretty disingenuous being that you're the same guy making all the (anonymous) comments.

      I direct you to the mast head at the Emeryville Tattler. Do you see anything there that claims the business community's interests are what we work for? No you don't. The Tattler is not interested in impartiality (and neither are you). We decidedly don't care to forward corporate interests here. They have plenty of lobbyists and even a blog in Emeryville to help forward their interests. They're fine as they are without extra help from us. The Tattler is working in the interests of the residents of Emeryville. It says right there in the mast head.
      The public (minus the businesses) can glean valuable information in this story because it's about the public commons and that's what we are interested in here at the Emeryville Tattler. I recommend you go elsewhere to get the corporate/business take on the public commons and why they (the commons) need to be rolled back and privatized. May I suggest the E'Ville Eye?

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    2. There are at least two anonymous commenters at the moment. My guess is possibly three. Your claim that one person is making all of the comments is, like most of your blog, just something you made up.

      The Emeryville Tattler has nothing to do with the residents' interests. The Tattler is about posting your opinions, nothing more.

      The MWO also has nothing to do with the residents' interests. The only things the residents are getting are higher prices and fewer small local businesses. The job losses and wage increases primarily impact residents of other cities because minimum wage workers (and their employers) generally can't afford to live in Emeryville.

      The MWO is a tax on local businesses and residents to benefit other surrounding cities. Its primary goal was to help the SEIU achieve its national objectives. The residents' interests were largely ignored during the discussion nine months ago.

      When the minimum wage passed, it wasn't a room full of residents that Ruth Atkin instructed to cheer. It was a room full of red shirted SEIU members who are going city to city and who were conveniently given an exception to the MWO itself.

      The residents get to celebrate each and every week by picking up the tab at the local restaurants.

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    3. Evil unions hiding under the bed. Everything would be great except for the fact that there are still some workers engaging in collective bargaining. It's gotta be stopped I tell you. Cheering red shirted union members and taxed residents...thanks for not trying to hide the fact that you're a sociopath.

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  6. There was no hiding or collective bargaining required. The City Council did exactly what they were asked to do by the SEIU. The residents and local businesses did not have a seat at the table.

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    1. There were several community meetings at City Hall, the Council members listening, where the business community was invited to speak about the issue. That would be "the table". Do you deny these meetings took place?

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    2. Are you referring to the community meetings at City Hall that Jac Asher cancelled because she stated she already knew what the businesses thought about the minimum wage?

      Or maybe you mean the community meetings between EBASE and the City where a group of representative from the local businesses were asked to give present alternative plans to increase the minimum wage?

      Or perhaps, you mean the meeting where independent studies of the economic impact of the MWO on residents and local businesses were presented and discussed?

      I imagine you don't mean any of those since none of these ever occurred.

      The business community was not invited to speak about the issue. The business community rose up and shouted in two minute increments during limited public discussion about a law written by the SEIU which was announced by Ruth Atkin as having passed before a single vote had taken place.

      The businesses and residents were never at the table.

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    3. What meeting(s)? I'm talking about the Minimum Wage Ordinance study session meetings where you got a chance to try to persuade the City Council to vote with the businesses AND YOU COULDN'T GET ONE COUNCIL MEMBER TO VOTE YOUR WAY, not even Nora Davis. Talk about failing to make a case! Your side is pathetic. You had your chance and you lost so now sit down. That's the way it's supposed to work in a democracy. Or is THAT what the problem is with you?

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  7. To set the record straight, I am the same poster for all anonymous posts on this thread. The Emeryville Chamber of Commerce hired me through Craig's List to monitor this site and comment regularly.

    And to be honest, there is a direct and real correlation between the start of Donald Trump's campaign and the increase of business licenses in Emeryville.

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  8. I fail to see how the MWO was an SEIU-inspired ordinance given that the MWO does NOT apply to businesses with a collective bargaining agreement. This is the easiest canard to shoot down imaginable. Those evil unions were behind the minimum wage ordinance, the ordinance that does not apply to them at all. Ha! That would be hilarious if it didn't fool uninformed readers.

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    1. Unions favor more equality in the society in general with more equity based wealth sharing as corporate productivity rises. In this way, unions are in favor of minimum wage increases generally even if it doesn't overtly benefit unions specifically. In Emeryville, that would usually put them on the side of the residents (vs the businesses).

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