In 2015 Emeryville Policy Turned Towards Residents, Away From Business
Two Unprecedented & Consequential Decisions
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| More than a five changing to a six. Real, fundamental and lasting change came to Emeryville in 2015. |
1- The Minimum Wage Ordinance
Emeryville's City Council took on the intractable problem of increasing income inequality in 2015 (after years of exacerbating it by overseeing an Emeryville service sector building boom) with our new Minimum Wage Ordinance, putting every worker in town on a path to $15 per hour plus guaranteed paid sick leave.
Emeryville being a small town smack in the middle of the hottest economic region in the United States seemed like a likely place to take on growing inequality in our nation, a rare issue something all five City Council members could agree upon. The amount per hour the Council settled on ($14.44 adjusted for inflation) is the amount it would take a worker, putting in 40 hours per week, to be ineligible for government assistance in the form of food stamps and other such programs. As such, any hourly wage less than that amount effectively represents a taxpayer subsidy to the business sector.
Emeryville being a small town smack in the middle of the hottest economic region in the United States seemed like a likely place to take on growing inequality in our nation, a rare issue something all five City Council members could agree upon. The amount per hour the Council settled on ($14.44 adjusted for inflation) is the amount it would take a worker, putting in 40 hours per week, to be ineligible for government assistance in the form of food stamps and other such programs. As such, any hourly wage less than that amount effectively represents a taxpayer subsidy to the business sector.
The united City Council faced a united business community against the ordinance, predictably. As they always do when asked to pay their fair share, those anti-minimum wage, pro-business voices predicted a wholesale failure and exodus of businesses in Emeryville, something that clearly has not happened half a year after the implementation of the ordinance. The new ordinance puts Emeryville on the map as no longer serving to exacerbate regional problems but instead serving as a leader in solving problems.
2- The Market Place Development Decision
In 2015, Emeryville's City Council said NO to a developer. That had never happened before and the effect has been very consequential and promises to be evermore so moving forward.
The developer in question, City Center Realty, wanted to build the Market Place development, a series of rental apartment towers clustered around the Public Market on Shellmound Street, some 456 units total. The new progressive City Council said they wanted more affordable rental units than what City Center Realty proposed. The Council wanted at least 50 units of affordable housing but the developer said they could only make the whole project profitable by building no more than 33 units...any more than that and the project "won't pencil out" City Center said. The Council held firm as well on the new Family Friendly Housing Ordinance, something City Center said they also couldn't afford.
The City Council didn't buy that from the developer and they held their ground: 50 units or no project they said. The developer threatened to build the project without ANY affordable units as a result of the Council's audacity. That's when the right wing in Emeryville started screaming that the Council must do as the developer said; all pretty standard fare for Emeryville so far but the Council majority still said NO....an exceptional thing.
And then the developer caved on the affordability and the family friendly units.
Emeryville will now get 50 units of affordable housing; the same percentage rate (50:456) as exists now in the aggregate in the whole town; the Market Place development will not make Emeryville less affordable as a result of the City Council holding firm.
The Market Place decision is a game changer because it removes the former argument always posited by the right wing in Emeryville that if we don't do everything every developer says, they'll pack up and leave town: a horrible prospect for our town they say every time. Now we know for sure: developers will lie to get their projects built and maximize their profits. When they say a revision to their proposal won't pencil out, we know they're lying. This new empowerment of City Hall over developers promises to have profound effects on all future development in Emeryville; now we get to have planning in our town, just like other towns.
The developer in question, City Center Realty, wanted to build the Market Place development, a series of rental apartment towers clustered around the Public Market on Shellmound Street, some 456 units total. The new progressive City Council said they wanted more affordable rental units than what City Center Realty proposed. The Council wanted at least 50 units of affordable housing but the developer said they could only make the whole project profitable by building no more than 33 units...any more than that and the project "won't pencil out" City Center said. The Council held firm as well on the new Family Friendly Housing Ordinance, something City Center said they also couldn't afford.
The City Council didn't buy that from the developer and they held their ground: 50 units or no project they said. The developer threatened to build the project without ANY affordable units as a result of the Council's audacity. That's when the right wing in Emeryville started screaming that the Council must do as the developer said; all pretty standard fare for Emeryville so far but the Council majority still said NO....an exceptional thing.
And then the developer caved on the affordability and the family friendly units.
Emeryville will now get 50 units of affordable housing; the same percentage rate (50:456) as exists now in the aggregate in the whole town; the Market Place development will not make Emeryville less affordable as a result of the City Council holding firm.
The Market Place decision is a game changer because it removes the former argument always posited by the right wing in Emeryville that if we don't do everything every developer says, they'll pack up and leave town: a horrible prospect for our town they say every time. Now we know for sure: developers will lie to get their projects built and maximize their profits. When they say a revision to their proposal won't pencil out, we know they're lying. This new empowerment of City Hall over developers promises to have profound effects on all future development in Emeryville; now we get to have planning in our town, just like other towns.
Nice upbeat post! In a small city like ours, you'd expect average citizens to have more control over how things run than in larger cities. Yet time and again we've been manipulated.
ReplyDeleteI really don't know where we'd be without the Tattler to expose the manipulators and make things tougher for them.
Let's hope that the gains in 2015 signal a turnaround in how things get done in this city. And here's looking forward to a new year of Tattling with a capital T.
Thanks for the compliments Will.
DeleteWhat we've found is Emeryville still needs the Tattler even with our new progressive Council majority. Nothing like a little sunshine to serve as a powerful disinfectant we say.
In what way are residents benefitting from the minimum wage ordinance? We are paying higher prices everywhere and we are losing local businesses. The only benefit I see is that Emeryville is in the news occasionally for having the highest minimum wage in the country.
ReplyDeleteWere the residents supposed to get some benefit? If so, what is it?
Comments like this are hard to know how to answer; the temptation is to go snarky and to that end I'll simply conjure the words of Mitt Romney by turning them around and pointing out the obvious: corporations are not people my friend.
DeleteBut really, you can't see how this benefits people? People working 40 hours a week and still not being able to afford to feed themselves? That's our town without this ordinance. Without going into the hard to quantify but real psychic harm that befalls those who are part of a polity that existentially preys on those less fortunate among us, how by attrition, it degrades and erodes our humanity, let's say for sake of argument you personally make more than Emeryville's minimum wage: You benefit by the classic 'multiplier effect'...more money in more hands, changing hands, churning and heating up the economy. This much studied economic effect is especially pronounced by money in the hands of poor people. Poor people spend everything they make...they pour it right back into the local economy. All benefit economically when abject poverty is alleviated. It's the increase in aggregate demand that stimulates the economy, not the 'supply side' mumbo jumbo sold to us as 'trickle down' phony nostrums from the Republicans.
Your argument is specious; it recalls for instance those who would end public education because they don't have children...it fails fundamentally at accounting for all the metrics of a public policy.
Oh and we're not losing local businesses. Please read the Tattler story dated December 26 titled "Six Months After Passage of Emeryville's Minimum Wage Ordinance: No Decline in Business Viability". The numbers show we're gaining new businesses and loosing far fewer businesses than before the MWO was enacted. Sorry, that's not a accurate statement you made.
My question was about "residents", not "people" generally. I get that the people who make more money benefit. Those who lose their jobs, shop locally, and the local businesses take the hit.
ReplyDeleteBut I was asking how Emeryville "residents" benefit. If I'm in the middle class and particularly if I have to pay rent in Emeryville, I spend all of my money also. So, there is no extra 'multiplier effect'. The money is spent either way.
If we had lots of Emeryville residents working minimum wage jobs here, I see your point. But since Emeryville rents don't allow minimum wage workers to live here, the Emeryville residents are just subsidizing residents from other cities.
It may be a good thing to do, but it seems incorrect for you to say that this is a new era of Emeryville residents coming first. It's the same as always. Emeryville residents are paying the bills. Others are reaping the benefits.
If you're spending “all your money” on rent, then you're not having much of an effect stimulating the local economy sorry to say. Most new landlords in Emeryville now are mega corporations with out of state HQ's with plutocrat CEO's. That's where your Emeryville money is being shipped off to. In that way, you're not helping, at least not like minimum wage earners are. Housing shouldn't represent more than 30% of individual income. You need to appeal to the City Council to deliver more affordable housing (see #2 in the story above). The Tattler's got your back...you're welcome.
DeleteSo the benefit to Emeryville residents is that we get to pay more for everything we buy locally allowing us to stimulate other cities' economies by exporting our money to neighboring cities every time we shop. The City Council is helping us by relieving us of our money.
ReplyDeletePlease get that affordable housing going. I think I'm going to need it.
Well, you have a very dark view of things I'd say. A dark, sociopathic and disempowering view.
DeleteBusinesses charge what the market will bear for their goods and services. If you're right that they will have to jack the prices up so much in Emeryville because of the MWO that they'll go out of business en masse then we'll see that reflected in the statistics available from the City. So far that hasn't happened. I guess we'll just have to wait then. And keep waiting. The waiting will serve your agenda of always having this meme available. Mass business failure will always be just around the corner.
Meanwhile, you'll keep on with the 'but things cost more' meme...it's a neat way to get gullible people to only accept costs at the point where you want them tabulated....to serve your bourgeois agenda. Costs associated at other junctures are conveniently ignored. Can you say fossil fuel industry?
Emeryville simply MUST be a locus of government dysfunction leading to suffering among the working poor. Yawn. Can't you come up with something more creative? We've heard this right wing stuff too long. We grow bored.
Interesting demographic data from
ReplyDeletehttp://www.bestplaces.net/economy/city/california/emeryville
To be fair more than 25% of Emeryville residents make less than $40K a year. Increased prices do hurt our local residents.
ECONOMY OVERVIEW
The unemployment rate in Emeryville, California, is 5.70%, with job growth of 0.70%. Future job growth over the next ten years is predicted to be 35.70%.
Emeryville, California Taxes
Emeryville, California,sales tax rate is 9.00%. Income tax is 6.00%.
Emeryville, California Income and Salaries
The income per capita is $50,772, which includes all adults and children. The median household income is $66,136.
ECONOMY Emeryville vs United States
Unemployment Rate 5.70% vs 6.30%
Recent Job Growth 0.70% vs 1.18%
Future Job Growth 35.70% vs 36.10%
Sales Taxes 9.00% vs 6.00%
Income Taxes 6.00% vs 4.72%
Income per Cap. $50,772 vs $28,051
Household Income $66,136 vs $53,046
Family Median Income $77,273 vs $64,585
ESTIMATED HOUSEHOLDS BY HOUSEHOLD INCOME
Income Less Than 15K 10.96% vs 12.61%
Income between 15K and 20K 3.72% vs 5.33%
Income between 20K and 30K 9.05% vs 10.57%
Income between 30K and 40K 6.19% vs 9.90%
Income between 40K and 50K 6.01% vs 8.95%
Income between 50K and 60K 7.96% vs 8.08%
Income between 60K and 75K 12.70% vs 10.09%
Income between 75K and 100K 14.56% vs 12.25%
Income between 100K and 150K 16.96% vs 12.82%
Income between 150K and 200K 3.03% vs 4.78%
Income greater than 200K 8.86% vs 4.64%
I didn't mention mass business failure, so no idea why you went off on that tangent.
ReplyDeleteYour position appears to have changed. Previously you were saying that the City Council should serve the residents of Emeryville. Now you're saying that focusing on the residents of Emeryville is part of a "bourgeois agenda".
What, other than higher prices, is the benefit of a $15 minimum wage to residents of Emeryville?
No need to continue with you so please do go on alone...it's most interesting.
DeleteExactly. Your silence is the perfect answer. Emeryville residents receive no benefit. We just foot the bill.
DeleteI know you are but what am I?
DeleteLet’s drop the snark and get back to the original question, which deserves to be asked and answered. Everyone in Emeryville benefits from the increased minimum wage.
DeleteStudies show that we get better service from employees who are paid more fairly and treated better on the job. These employees are motivated to perform better and are more likely to stay with their present job. That in turn raises their level of competence, which translates to better service for us. Here's a great summary of actual studies that show this: https://hbr.org/2012/01/why-good-jobs-are-good-for-retailers
A higher minimum wage reduces demands on public assistance. A recent study showed that 56% of combined state and federal spending on public assistance goes to working families--people whose wages don't cover their living expenses. Raising wages above the poverty level reduces the drain on tax dollars. See the study here: http://laborcenter.berkeley.edu/the-high-public-cost-of-low-wages/
A broader benefit to us all is a society closer to equilibrium. The current trend is toward greater growth in wealth at the top, while everyone else has to work harder just to stay in the same place. Emeryville's minimum wage law is just a drop in the bucket, but our leadership--by showing that the new law actually produces desirable benefits for all--can help spread this idea to other communities and to the nation as a whole.
Thanks Will for the thoughtful reply. RE snark- In my defense, try going back and forth with Mr Anon several times and see where YOU land.
DeleteHis premise has now been reduced to 'things will cost more' (doesn't quantify)...to that anyone would say: who cares? If a lot of people care then we'll see that reflected in business closures in Emeryville. Barring that then Anon is just another outlier whiner/complainer or right wing ideologue...same old story. If we don't see substantial business losses, then Anon's argument is so revealed. So we wait for Anon's hoped for bad news. Six months so far and all we see is the opposite. It's like the inflation Republicans kept saying was coming as a result of Obama's deficit spending. We're still waiting for that too.
I'm waiting for Anon to tell us why the paradigm that existed before MWO was perfect. If creating a successful city means having cheap stuff for residents then why shouldn't we shrink City Hall? Why pay for anything? Let's get rid of planning and parks and such...just think how cheap it would be.
Will,
DeleteThanks for the thoughtful comment. To sum up your answer, some benefits to Emeryville residents are potentially:
- better service
- reduced costs for public assistance
- movement toward social equilibrium
These are reasonable answers, but I don't think it's as simple as you suggest.
1. Take a look at this article which responds pretty well to your first link and references the same companies: http://www.bloombergview.com/articles/2013-08-27/why-walmart-will-never-pay-like-costco
It points out that CostCo and Trader Joe's largely serve the affluent whereas WalMart and McDonald's serve the poor. CostCo is able to pay more by reducing the number of employees (by half). By catering to the middle to upper class and reducing the number of employees, CostCo creates a high margin business that can support higher wages. If Wal-Mart were to simulate Costco's model, 700,000 workers in the US would lose their jobs and most low income families would lose the most economical place they have to shop. Is that a good trade-off?
2. Is it better to have low skill employees entirely subsidized by business (high minimum wage), partially subsidized by business (moderate minimum wage) OR to have them entirely subsidized by public assistance (the unemployed)? I think we both would agree that the last one is the worst. The (difficult) question is whether Wal-Mart's or Costco's approach is better for the poor. Is it better to have two people earning $10 per hour (Wal-Mart) or one person earning $20 and one person unemployed (CostCo)? The cost to the public is the same in both cases. But the cost to the poor and unskilled would be far worse if WalMart adopted CostCo's model. If WalMart cut its staff to Costco levels, 700,000 people would lose their jobs. According to the Bureau of Labor Statistics, only 23 percent of the poor are employed. The problem of poverty is not one of wages but one of jobs.
3. Finally, is society really more equitable when we price low skill workers out of jobs in order to reduce subsidies paid for by the rich? Is society more equitable when high and low skilled workers are making the same amount? When we raise the minimum wage, the lower and middle class residents pay the tab while the poor suffer from reduced job prospects. There is a reason most economists prefer increases to the Earned Income Credit over minimum wage increases for reducing inequality and poverty. The EIC is funded by the wealthy (85% of taxes are paid by the top 20% of earners). The minimum wage is funded by the middle and the poor.
Will, I appreciate your insight and your comments. It's not an easy issue and one that deserved more thoughtful consideration than was given by City Council.
While we're waiting for Will to reply (if he relies) let me just break in here to say what your talking about is a classic race to the bottom argument. This appeals to people who feel disempowered and those with low self esteem. I sort of doubt Mr Leben will be flummoxed by this line of reasoning.
DeleteNot at all. Though nice of you to "race to the bottom" with the snark.
DeleteThe argument is that there is a trade-off and an optimal middle ground. A $50 minimum wage is certainly too high. A $2 minimum wage is certainly too low. Like a Laffer Curve, set the minimum wage at $50 and the unskilled have no chance of entering the workforce. Set it at $2, and there is no incentive to climb out of the social safety net and get a job.
The argument does not race to the bottom but encourages finding a balance, an ideal point where you are actually helping rather than permanently injuring the poor, the resident, and local businesses.
Setting the minimum wage as high as possible as fast as possible, far beyond historical norms is reckless and, frankly, unethical. Good intentions do not feed the workers who lose their jobs. Idealism doesn't help the unskilled who get trapped in unemployment by a $16 minimum wage.
To be cavalier and reckless with the jobs of unskilled workers is no different than assuming that all social ills will work themselves out on their own. Reckless idealism becomes self-indulgent. It allows us to feel good about ourselves without any of the serious effort, study, or thought that goes into actually balancing practical issues and solving real world problems.
The discussion Will started is a great one. This discussion needs to happen. Emeryville needs to look at the minimum wage issue again in a serious way with resident interests at the center of the discussion rather than union interests.
Claims about the ill effects of raising the minimum wage, including Anonymous's charge that a higher minimum hurts the lowest wage earners, are addressed very readably here: http://www.dol.gov/featured/minimum-wage/mythbuster
DeleteThat's no substitute for a technical evaluation, but I’m the wrong person and this is the wrong forum for that.
One substitute that comes to mind is to point out a pattern we can all recognize as real. Our wage practices don't deal with people equitably. Depending on factors like your gender, race, country of origin, you are likely to be paid more or less than someone else with the same qualifications. Some business owners act as though that's just fine. In fact lots of them do: otherwise the statistics would be different.
Analogously, our wage system exploits the fact that many workers will agree to work for less than a living wage, simply because there's no better alternative available to them. Emeryville's minimum wage law responds to that. But it won't succeed if employers don't invest some of their profits in paying the higher wage and if the rest of us are unwilling to pay a little extra for better service, for getting working people off public assistance, and for a marginally more equitable sharing of economic benefits.
Californians have voted to pay more for eggs so that chickens can be a little happier. It could be a sign that we’re ready to pay our low-wage workers a little better.
To Anon 1:09 AM
DeleteIf someone disagrees with you, that doesn't equal snark. Snark is an amalgam of snide and remark. It implies a mocking done in an indirect way. To call your ideas an example of a race to the bottom is not snark...there is nothing indirect with that assessment. You just don't like it (apparently). To use snark is perfectly acceptable but please hold accusations of snarkiness for when they're actually used.
Now on to the point; if your quoting Laffer, you're giving up the game. That's an Austrian anti-Keynesian economic model we're not using. Saying our hands are tied in the way you're saying they are is to sign onto an economic worldview that plutocrats use to assure inequality reigns. Besides, Lafferites can't even answer a simple question that cuts to basic governance: how did the Great Depression end?
To Will-
DeleteAt what point do you stop feeding the guy who quotes Arthur Laugher? It's a joke. Mr Our Hands Are Tied Anon is serious about Laffer.
Will,
DeleteCheck out this article which cites your DOL link:
https://www.washingtonpost.com/posteverything/wp/2015/09/24/the-new-propaganda-how-the-american-government-is-trying-to-control-what-you-think/
There are actually a host of alternatives available to entry level workers to move beyond an entry level wage to a living wage to a middle class wage...as long as there are plenty of jobs.
I like your chicken analogy. When you raise the cost of eggs a little, the chickens live better lives. When you raise the cost of eggs a lot, the chickens go well with gravy. The situation for workers is no different.
That's a cute trick Mr Anon, separating union interests from resident interests. Cute and laughable. I think you've forgotten, Republicans are like 10% of Emeryville voters. That's the choir you're preaching to. But don't let that stop you.
DeleteNo trick. And it has nothing to do with Republicans. It has to do with being progressive, practical, and actually thinking seriously about social and economic problems. It's about finding solutions that don't hurt the poor, the residents, and local business.
DeleteResident interests are obviously not the same as union interests. It's revealing that you assume that union interests and resident interests are the same thing. Maybe that's the same mistake City Council made.
The unions want to organize the fast food industry. Residents would like to be able to afford a cup of coffee at a local restaurant.
Few residents wake up worried about whether union membership will continue its 50 year decline. They do worry about paying the rent.
Go back and watch the City Council meetings where the MWO was discussed. The room wasn't filled with residents. It was filled with out-of-town union advocates and small, Emeryville business owners fighting for survival.
Go back and look at the photo outside of City Hall after the MWO passed. I see the same union advocates who attended the meetings in Oakland, Berkeley, and El Cerrito, not the residents.
Once the MWO passed, all those guys left. The residents are here paying the bills.
The resident's interests and the corporate interests are one in the same: residents are just consumers who want a cheap cup of coffee and the corporations want to sell it to them. They have a hard time affording it because the middle class and trade unionism have both collapsed over the last 50 years.
DeleteNot Republican? Progressive? Man are you ever confused.
That may be so, but the CC decided NOT to take up some form of Rent Control measure which would have benefitted far more Emeryville residents than Emeryville resident employees. NOW THAT WOULD HAVE BEEN TRULY HISTORIC IF THEY HAD!
ReplyDeleteRichard Ambro
64th St
Thanks Richard. Let's see if the progressive City Council majority puts some rent control legislation ideas together...I've heard talk about that. Republicans in Sacramento have severely curtailed possibilities but there are still things municipalities can do.
DeleteSpeaking of Republicans curtailing legislation, notice how Mr Anon above sees economic activity in Emeryville as a zero sum domain? Emeryville as a nation state. It's as if Emeryville has its own currency and dollars leaving our 1.2 square miles to head out to the rest of 94608 means there's a trade imbalance and Emeryville dollars (as opposed to US dollars I guess) are devalued as a result. I suppose that then means we can expect Emeryville's economy to experience inflation. A little of that could be good for working people but Emeryville's investor class, bond traders specifically might get alarmed. Maybe City Hall can use some monetary policy to prop up our dollars. Perhaps a little interest rate raise from the Emeryville Central Bank is in order. And maybe some shuttle diplomacy with Washington to try for a more beneficial trade agreement with the United States would be advisable.
Isn't it neat to live in your own little subjective world where everything supports your agenda like Mr Anon does?