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