Emeryville's Landmark Minimum Wage Ordinance:
Tempest in a Teapot
The long awaited City Council commissioned Minimum Wage Ordinance Business Study, ordered after passage of Emeryville's landmark living wage law and released this month shows an Emeryville business community remarkably unfazed by the increase in employee labor costs brought on by the 2015 ordinance. Upon presentation of the study and in summery, Emeryville's Economic Development Manager Chadrick Smalley told the Council members at their November 15th meeting, "The picture is good. Emeryville is still a good place to do business".
The staff presentation of the plenary study conducted by students at the Lorry I. Lokey Graduate School of Business at Mills College revealed an Emeryville business climate that is healthy and growing after passage of the ordinance and an improved quality of life for minimum wage workers, a significant contrast to dark prophecy loudly expressed by several business owners in the run-up to the ordinance. Alarms raised by the business community before the passage of the MWO included warnings of wholesale business closings and businesses fleeing to other cities with lower labor costs but have been proven to be unfounded the study clearly reveals.
The increased minimum wage has barely registered a blip with Emeryville businesses. A survey associated with the Mills Collage MWO Study completed by business respondents shows the biggest problems facing Emeryville's businesses is not increased labor costs but rather finding skilled and experienced employees, rising rents and the general cost of living. Further, the survey shows fully 60% of businesses had a positive reaction to the MWO while 21% reacted negatively but that number is tempered by what Mr Smalley said is a combined negative reaction to any government regulation some business owners display.
"After implementation of the
Minimum Wage Ordinance,
Emeryville lost 188 businesses
but gained 238 new businesses"Further, the study shows 82% of businesses have no intention to leave Emeryville after the MWO while 16% said they could or would but again Mr Smalley told the Council members the 16% number is misleading, "If you ask businesses without passing such an ordinance, you would get comparable results" adding, "There is no increase due to this ordinance".
The staff warned the Council not to put too much stock in businesses openings and closings tabulated before and after the implementation of the Minimum Wage Ordinance because those numbers don't necessarily correspond to the MWO but the Business Study does show an increase in new businesses and more than 1,100 new Emeryville jobs created in the year after MWO implementation; a 6% increase over the previous year before the MWO. That number, even though it beats Oakland job increases represents "no significant difference between pre and post MWO" the Economic Development Manager said. Berkeley it was noted actually lost jobs in the same time period while it also had the lowest rise in its minimum wage.
|The Business Community Was Alarmed|
They predicted massive business failures.
The staff additionally cautioned the City Council that the Study, while complete is not necessarily definitive for all time. As yet unknown effects could make themselves evident given more time. "The Business Study should be revisited in a year or two", Mr Smalley said.
MWO Business Survey HERE
|Emeryville's Business Climate Since MWO |
ratio of closed to opened businesses
Red = closed businesses
Green = newly opened businesses