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Sunday, August 11, 2019

For Shame: Emeryville's Minimum Wage Roll Back Debacle

Dust Has Settled From City Council's Use of Minimum Wage Rollback Bludgeon

Citizens Want to Know Why
They Took Us There

News Analysis/Opinion
Three months ago Emeryville City Hall launched a divisive attack on the working poor in our town; a paroxysm of pro-business ideology in action forwarded by three members on the City Council.  At their May 21st meeting, the Council majority three, working at the behest of certain restaurant owners in town and without consulting any affected workers, voted to rollback Emeryville's hard fought four year old progressive Minimum Wage Ordinance (MWO).  The injudicious action was subsequently beaten back by the people of Emeryville by way of a voter ballot initiative petition brought by a coalition of labor and community groups forcing the Council's hand who voted to retract the wage rollback on July 23rd.
So now that the dust has settled and the minimum wage has been successfully defended, we're right back where we were before this whole thing got started.  The people's befuddlement and acrimony however is lingering over the whole sordid and unnecessary affair. 
Citizens would be right to ask why did all that just happen.

It's been a roller coaster of drama in the people's hall, the actors all playing their parts: posturing, feigning, kibitzing, doubling down, pivoting and then closing with a July 23rd “heartsick” capitulation, to quote Councilman John Bauters, the initiator of the whole spectacle.  Dramatic to be sure, but it was drama the people of Emeryville never asked for.

The May 21st City Council minimum wage incursion, led by Mr Bauters and joined by his colleagues Dianne Martinez and Scott Donahue, formed the spare three member majority needed to roll back wages for small restaurant workers in town.  The insurgent majority set up an ambitious timeline for themselves; by July 1st, they would have to finish the required second reading necessary to amend the existing ordinance (effectively creating a new ordinance), in order to make sure the restaurant workers didn’t get their MWO mandated Consumer Price Index pegged raise set to take effect on that date.  A lot of finagling of schedules was necessary owing to California’s Brown Act ‘sunshine law’ notifications and individual Council members’ personal calendars, to make the hard July 1st date.  The 'Council three' made use of a controversial but technically legal provision performed by a family event obliged Councilman Donahue phoning in live from the East Coast to cast the deciding vote.
All their hard work paid off and in the eleventh hour, the City Council three was able to stop the Emeryville restaurant workers from getting their raise, just in time.

Or so they thought.

The problem is they didn't sufficiently calculate the passions of an aroused and aggrieved Bay Area labor contingent.  Because  of the audacity of the Council’s action, the coalition of labor groups and community activists known as East Bay Working Families entered the fray with a bevy of hot off the presses voter petitions.  Weeks of door knocking and 871 Emeryville registered voter signatures later, the Council majority’s whole ambitious anti-worker plot came to its inglorious end.

Emeryville's Restaurant Sector 2013-2018
The Minimum Wage Ordinance took effect in 2015.  
Restaurant owners are claiming the high minimum wage  
costs are driving them out of business or forcing them to flee.  
Notice what happened beginning in 2015 with new start-ups.
That’s the history of the last three months in a nutshell.  Those seeking more detail may want to make use of the Tattler search bar; “minimum wage ordinance".  But still unanswered is why?  Why did this gang of three suddenly make this incongruous turn?
Surprisingly, in retrospect, the three Council members were all endorsed by the progressive citizen activist group Residents for a Livable Emeryville (RULE).  Cutting the wages of the poorest among us is not something one would expect progressives to do.  The official explanation didn’t shed any light. That argument posited that the restaurant owners had assured the three they were all pushed to the edge, business failures and bankruptcies looming if their workers were paid more as relayed and repeated by the Council majority.  But the City Council never checked to see if the bankruptcy claims were true.  They just took the business owners at their word.  And they failed to listen to workers or labor groups at all.  Again- not how one would expect progressives to act.

Trust But Verify
Emeryville, being a small town, has certain advantages when it comes to making decisions such as the Council made based on the word of the restaurant owners.  In this case, the Council could have easily directed the staff to check the veracity of the owner’s claims of looming bankruptcy.  With only as few as 22 restaurants affected by the minimum wage roll back in question, a manageable number, the City could have easily opened the books of these businesses.  A city like Oakland, with hundreds of restaurants, could not enjoy Emeryville’s capacity to actually check before they leaped into such consequential policy change.
Our City Council majority, instead of finding out before they tore asunder the lives of the working poor in our town, instead forged ahead based simply on the assurances of those business owners with a material interest in lying. 

Unlike the City Council, the people of Emeryville, historically, have shown they don't trust the business community to tell the truth when profits are on the line.  In 1997, the City Council looking to increase revenue, began discussions about whether to raise the taxes on the Oaks Club card room up to the Bay Area card room average.  At the time, the Oaks enjoyed an Emeryville tax rate at about 25% of the Bay Area average.  The Council majority believed the owner of the Oaks Club when he said the increase would drive his business into bankruptcy and they dropped the issue.  The people picked it up with a ballot initiative petition and ultimately Emeryville voters approved the tax increase on the Oaks.  Sharp eyed readers will note the Oaks club is still operating at their San Pablo Avenue address - the owner, John Tibbetts having been revealed to have lied about going bankrupt. 
Again in 2005, the people brought a ballot initiative concerning raising wages for hotel workers in Emeryville up to the Bay Area average after the City Council majority believed the hype coming from the hospitality industry warning about wholesale business failures with hotels fleeing Emeryville or being driven into bankruptcy.   An alarmed Council majority alerted the voters not to be "dupes" to organized labor and to vote NO to the 'Hotel Workers Living Wage Ordinance' proposal.  Emeryville voters didn't listen to the City Council who was listening to the warnings of the Hotel owners and they passed the 2005 Measure C easily.  Again, the hotel owners were lying about the effect increased costs would have on their businesses and the only people duped were the Emeryville City Council majority.  Emeryville at the time had four hotels, now we have five, making it hard to make the case for "wholesale business failures".

By 2014 however, the City Council finally learned that businesses will lie to protect their profits.  That year, a new more progressive Council majority didn't believe the dire warnings about wholesale business failure and bankruptcies from the California Association of Realtors and the Emeryville Chamber of Commerce if Emeryville were to raise real estate transfer taxes up to the Bay Area average.  Again, the voters approved Measures U&V that allowed for the increase in taxes and again, the business failure boogyman turned out to be nothing more than the business community not wanting to pay more money to conduct business in our town.

Moving ahead to 2019, it would appear it's back to the future for us.  The City Council majority seems to have unlearned what they knew in 2014 and it's back to the old familiar saw about wholesale business failures if the business community is forced to pay more money.  We'll have to wait and see if this time the warnings were prescient but something tells us it's gunna be more of the same.

So why did these three Council members take us down this path again?  Especially when their own staff told them the 2018 Emeryville Mills College Business Study that reported that restaurant business stress, while extant, was not sufficient to propose public policy changes, "A piece of trash that we never should have paid for" Mayor Ally Medina said of the Mills document.  The staff conducted their own research that showed little or no stress for Emeryville's restaurant sector from added labor costs.  High rent costs were shown to be the primary source of business stress according to the staff report that accompanied a May 7th Council meeting on the MWO and the commissioned Mills Study.

The question of why this Council majority listened to the business community instead of the people of Emeryville or the low wage workers who toil here will likely remain unanswered for the time being.  Following the political careers of John Bauters and Dianne Martinez however might help Emeryville citizens find the answer.

Portrait of a Growing Emeryville Restaurant Sector
From the May 7th staff report to the Council.
Sales are beating the Consumer Price Index.  The Council had this info before 
they voted to rollback wages of restaurant workers despite the claims of looming 
bankruptcies from restaurant owners.
A 3.56% per year rise in restaurant sales average from the first year of the MWO
to 2017.  California CPI 2015 .01%, 2016 1.3% 2017 2.1% source: FRB 9th District


  1. If you are interested in the first woman to be appointed to the US Cabinet under FDR serving from 1933 - 1945 as the Secretary of Labor. Frances Perkins is the reason we have a minimum wage, a 40 hour work week, social security and the New Deal. Please join us at the Albany Public Library for a free event on August 20, 2019.

  2. The staff report numbers are compelling. They add an extra dimension to the decision. Was the report discussed publicly before the council moved against the MWO?

    1. The staff report was included in the City Council members' packets but it was not discussed.