In our attempt to cover as many perspectives of the $14.42/hr. living wage discussion as possible, we’ve reached out to a variety of stakeholders including the small businesses themselves who will be most directly impacted by this. We’re even working on an employee perspective with the help of the social justice advocacy organization EBASE (East Bay Alliance for a Sustainable Economy). Probably the most important perspectives are the policymakers that are initiating this.
The two most vocal proponents have been Councilmembers Jac Asher & Mayor Ruth Atkin. While Mayor Atkin has at least shown the courage to defend her stance and address residents and small businesses in the included interview, Councilmember Asher has unfortunately sought refuge behind the protective margins of the dais (and in the comment thread of this news blog) and has thus far refused to field any questions from us. My beliefs are clear: Since we, the public are not getting a voice in this as the city has pursued passing this as an ordinance vs. a public vote, council owes it to us to answer our questions.
Although I don’t personally agree with everything Mayor Atkin says, my observations of her is that she has certain principles. It was her vote in fact that determined the outcome of the failed housing moratorium and as she explained “the reason is not for the goals that are stated, I just think this is the wrong way to go about doing this.” In essence, she advocated for the democratic process and she wasn’t comfortable with the political tactics and manipulation of the rules. On the other hand is Councilmember Jac Asher who seems to be taking a “by any means necessary” approach to her policymaking. The failed Moratorium that she initiated (and I in fact spoke in behalf of) was ultimately defeated in big part because the tactics riled up the opposition (and I would expect this Tuesday’s Study Session to have a similar effect).
Is Councilmember Jac Asher Stonewalling the media?
Councilmember Asher repeatedly declined my personal invitations to meet and refused to answer any questions posed to her citing “my intent may not be council’s intent.” Similar stories have emerged of her refusing to meet with those with different opinions and those that have met with her reiterate that her mind is already made up about the matter so there’s no point. Maybe it’s uncomfortable for her to answer these questions … or maybe she doesn’t know the answers.
Asher’s career is as a lecturer at UC Berkeley so my only speculation is that she’s more comfortable behind a lectern dictating the discourse than having to field critical questions. I’m certainly not insisting that Jac address criticism through us. Asher seems to have a misperception that we do it “for the clicks” which is completely inaccurate. We do it for transparency and accountability (Really, the food posts get all the “clicks”). She could facilitate this through her close friend Brian Donahue who she aligns with and his opinion blog The Emeryville Tattler or even the friendlier confines of her allies at fellow Councilmember Scott Donahue’s wife Tracy “Lillian” Schroth’s The Secret News (I challenge you to find a single critical word about her in either of these sources). Both are founding members of the advocacy group R.U.L.E. (Residents United for a Livable Emeryville). I think we all can agree that nepotism between the media, special interest groups and politicians is generally a bad thing.
Jac even has her own personal blog that she infrequently posts on (last December being her most recent post in the wake of the #BlackLivesMatter movement). She could write her own perspective piece here and cite as many academic papers as she wants (I’d especially like to see the study of a 1.1 square mile city of 10,000 with a daytime population of 40,000 surrounded by cities with lower wage structures). She could even reach out to the larger media as former Councilmember Kurt Brinkman did in his recent Tribune guest opinion piece “Emeryville moving too fast on minimum-wage hike“. Whatever the medium, I think if you’re going to have strong opinions about something, you should also have the courage to back it up by addressing criticism.
I’ve supported Councilmember Asher in the past but I’m sorry, whether you like her or not, nobody should get a free pass from the media (especially policymakers). I always say the same thing, if Councilmembers want to see what real criticism is like, look across our borders because they have it pretty good here. The E’ville Eye is critical, but we are fair (as long as you’re fair with residents!). If The E’ville Eye has to take on the adversarial role in Emeryville Politics to get answers and facilitate dialogue, than we’re completely OK doing it. It’s not our obligation for City Council to like us, it’s our obligation to the residents of E’ville to understand all the parameters and I believe it’s the obligation of City Hall to act in the best interests of residents and not their own agenda’s or outside special interest groups. I only hope E’villains expect as much from their Council as we do.
An Exclusive Conversation with Emeryville Mayor Ruth Atkin:
I provided Mayor Atkin the following 15 questions in advance with the intentions of a more linear Q&A but it ended up being more of a discussion (NOTE: Transcription edited for clarity):
- So it seems like Emeryville has fallen behind its neighbors who have moved forward with their own Minimum Wage initiatives including Oakland, SF, Richmond & Berkeley. Any reasons our city has been slower to act on this?
- There was discussion for some time that Berkeley Mayor Tom Bates was trying to orchestrate a regional rage hike with neighboring cities including ours. Can you explain why this fell through?
- SF & Oakland moved to push their initiatives through via popular vote. Explain why Emeryville is seeking an Ordinance and what the advantages and disadvantages of this are?
- So $14.42 seems like an arbitrary figure to some. Explain to our readers how this figure was arrived at and the rationale for going so far beyond not only our neighbors in Oakland & Berkeley, but the entire nation and even the World?
- Which Councilperson initiated the minimum wage discussion and what has the involvement been from special interest groups like RULE or Unite Here! been thus far?
- Councilmember Asher and yourself (correct me if I’m wrong) both moved to eliminate a data-gathering poll and community meeting from the adoption schedule that staff recommended. Do you feel that this initiative is being fast-tracked at the expense of voter/resident outreach and input?
- What has the reaction to this been so far from Business (both small & big)? Have you had any personal conversations with any business owners or stakeholders?
- Do you think there’s an enforceable, fair way of making corporations accountable for keeping their employees out of poverty while not impacting small business who’s employees are not necessarily the family “bread-winners” (i.e. students)?
- I’ve spoken with several small businesses that say they’d be satisfied if Emeryville adopted either Oakland’s $12.25/hr. or SF’s model. Is this something still in consideration and do you see the logistical advantage of a regional model for businesses that operate in multiple cities like Farley’s and Commonwealth and Food trucks?
- I think most of us would like the perception of being a “just city” but how many actual Emeryville residents will this impact (i.e. How many Emeryville residents fall under the enforceable guidelines).
- I’ve heard Oaks Card club is a HUGE contributor to our tax base and owner John Tibbetts has been outspoken against this hike. Theoretically what would happen to the city tax base if they closed their doors?
- Some businesses have already proactively moved their service jobs toward a tip-less model/integrated Service charge to offset the impacts of these wage hikes. Would you see this to be a net benefit for workers or would you consider this as having backfired?
- My personal bias is that I want to live in a city with a robust small business climate as I feel this contributes to the vibrancy of a city (restaurants, cafe’s bars, etc.). My lifestyle includes a healthy dose of eating out and socializing. My concerns are that this is going to hurt the small business climate. Can you provide any reassurances to those like myself and food-service businesses?
- What is your response that this puts Emeryville small businesses at a Competitive disadvantage with our neighbors who are mere blocks away in most cases?
- We’ve pointed out many times how few small businesses there are in Emeryville (Excluding of course online businesses that don’t necessarily promote direct community engagement). How is Emeryville helping small business thrive in todays’s competitive market? Is the Chamber of Commerce doing enough for Small Business and how can our city do more?
Listen to this interview on SoundCloud or read the transcribed version below:
EE: It’s February 15th, Sunday. I’m here at the Public Market with Mayor Ruth Atkin. We have 15 questions regarding the minimum wage ordinance. We’re going to mow through these and get her insights on the behind the scenes of how we’re approaching minimum wage.
EE: The first question was which Councilperson initiated this or was it in fact a union or a special interest group such as R.U.L.E.? Who kicked this off?
RA: Well first of all Rob, I want to thank you for the opportunity to meet and to be able to discuss minimum wage with you. Thank you for your overture for getting together.
EE: My honor.
RA: Back in 2006 after Measure C passed I was interested … for people who weren’t around then, it was a workload standard and wage measure that pertained particularly to hotel workers. After that I thought we should be doing a living wage more broadly and the time wasn’t right to do a city-wide living wage such as the time is more right for that now.
But we did do a living wage ordinance for the city itself and the people who do business with the city. So, I’ve been interested for a long time in us adopting a city-wide living wage, at least back to the Measure C years. So now with the advent of the regional effort for various minimum wage proposals, now’s the time to visit this for the City of Emeryville and what makes sense for us.
The reason why I keep talking about living wage is I’m not really sure what the purpose of a minimum wage is, but my purpose of having a living wage is to raise the level of poverty and ss I’ve stated publicly at council meetings, the purpose really is my ideal and why we’re looking at $14.42 is twofold. One is it is the living wage amount that will be effective July one of this year for our living wage ordinance. Number two it’s about the same figure that a full-time, minimum wage worker would earn to earn enough money to not be eligible for welfare programs.
To me it’s been unconscionable that we could have full-time minimum wage earners who then have to go out on the public dole and make use of a welfare program because they can’t make a living. Especially in a high-cost area like the Bay Area, it really makes sense for low-wage workers to be able to get by. So, that’s the impetus about that R.U.L.E. or Unite Here! didn’t approach me this year about it.
Although after they – the organized labor, after they found out what we were doing, I got correspondence and phone calls congratulating me for my leadership here and wanting to move forward. They provided some input around some other issues that our Council has yet to discuss around health care provisions and other workload standards, and some other things that organized labor is particularly interested in. But we as a council haven’t discussed any of those health care benefits yet.
So, in terms of your question 4, the $14.42 is for two reasons. One, it’s our – it’ll be our living wage amount in July and it’s about enough for – to avoid being eligible for welfare. There – the time to act – guess this goes back to your first question. The time to act is now because the big, the big, behemoth cities have moved on this area. So time is now for us to do something similar.
In terms of your later question about, doesn’t it make sense to do something regional? The Berkeley Mayor [Tom Bates] wanted to do something regional. What Berkeley was putting forward is different than what the Lift Up coalition did in Oakland. They’re proposal does not include any kind of CPI, Consumer Price Index cost adjustment. So, it’s a hike and then it stays flat. That just didn’t make sense to me and I don’t think it made sense to the other Councilmembers. That it wouldn’t be adjusted by the Consumer Price Index. So …
EE: The Oakland’s FF is tiered in a way that there’s incremental bumps but it’s not necessarily equation based with a CPI like a Emeryville version would be, right? Do you know about the Berkeley wage? Is theirs tied to CPI in a way? [Reader Correction: FF is tied to CPI. See comment thread below for clarification.]
RA: No, that’s the point.
EE: But theirs was in fact an ordinance? Versus a direct election?
RA: It wasn’t voter initiated. The council voted on that. Then, so in terms of your questions 2 and 3, why are we seeking an ordinance? It goes back to your first question. We’re behind. We need to step up to the plate like our neighbors have. Why would we wait for labor coalitions to decide to focus on Emeryville? They usually ignore us because we’re so small. As an economic player in the greater region, our influence is just not that large.
So, like Berkeley I guess, we want to legislate minimum wage and not wait for voters or labor coalitions to step up to the plate to put it on the ballot. That would just take longer.
EE: I remember writing an article, I think it was in 2013 about how there was some momentum behind Bates’ plan to go as a region. I know those things are difficult to get everybody on board – to get all the needles pointed in the same direction. I don’t remember hearing what happened? Did it just fall through? Did Tom Bates …
RA: Yeah, Oakland did its own thing through the voter initiative. Already Bates’ plan was rendered meaningless because our biggest city in the county is doing something else through voter approval than what his plan called for.
EE: The difference between an ordinance and a popular vote. Emeryville is obviously seeking the ordinance which is Berkeley’s way versus Oakland’s way which is a popular vote. Any advantages or disadvantages there for the city?
RA: Why wait for an election when it’s the right thing to do?
EE: So you kind of feel like you’ve got enough push-back from the residents of Emeryville that this is what they want? That now’s the time to do it?
RA: Yes, absolutely. I don’t think our demographics are that different from Oakland’s in terms of political leanings or whatever. 80 percent of Oakland voted for this so I have no reason to think that anything less than 80 percent of Emeryville residents would want this as well.
EE: Well, it was not quite as dramatic of a jump. I mean, I don’t know if the Oakland FF measure would’ve passed with 80 percent if it would’ve been a 60 percent jump. Is that fair?
RA: Well, I don’t – the Lift Up did its thing, right? Everybody wanted a minimum wage hike. Who knows how much people would’ve paid attention to the specifics. You never really know. The fact of the matter is that the people are ready for an increase in the minimum wage. Again, to me, why talk about a minimum wage if it still keeps someone in poverty? That doesn’t make sense to me. It’s not the right thing – it’s not just and it’s not the right thing to do. To have people bust their [behinds], to work till they’re tired to the bone and still be in poverty. So anyway …
EE: I guess the thing that’s not totally clear to me is how many people this is gonna impact. I mean if you had a breakdown of actual Emeryville residents and actual Emeryville employees that would be …
RA: I don’t know how many low-wage workers who live in Emeryville also work in Emeryville. That’s your question.
EE: Yes, it is. We don’t have data for those kind of things unfortunately?
RA: No, I don’t know. So, I don’t know how many people – how many workers would actually – who live in Emeryville would benefit from it [Question 10].
EE: And so going back to question 5, so 2006 kind of laid the ground work for this which was the hotel living wage, Measure C, but you personally always had an eye for a city-wide minimum wage. So, you in fact maybe initiated this?
EE: OK. What were the other Councilperson’s involvement. Jac Asher or … ?
RA: Supportive, Jac was very supportive. She’s – and when I talked about $12.25 versus $14.42 she was very supportive of going for the higher rate for some of the same rationales that I just told you. High cost of living here and I think for people who are concerned about spending a lot of money. I think the idea that people could actually work and avoid welfare programs is appealing to people.
When I first discussed this, it might’ve been 2006 when we discussed this. I did some math about what the federal poverty level is and what the eligibility for the welfare programs were. I was basing it on the expanded eligibility for Medical, i.e. Medicaid. So, this figure would keep people off the Medicaid roles.
EE: OK. But again, we don’t have any data to really support how many people in the city of Emeryville this will actually lift up out of poverty. We think of Emeryville as having a lot of low-wage earner jobs, especially in the retail section.
EE: But we’re not clear about how many of those people are “breadwinners” per se? Or how many are just college students and high school students earning their first job [8th question].
RA: So there’s an assumption there that I want to challenge, which is that students don’t need living wage jobs. I would beg to differ because most students have to – or let me just say, if there was ever a time when someone could go through school just being supported by their parents, that is less and less true now. Most students have to support themselves at least partially while they go through school. As you know, through the national media many students are burdened with thousands and thousands of dollars of student debt.
So, if they can be a little less in debt and not have to scrimp and save so much while they get through school, that’s a good thing. Many more people have to support themselves as much as they can when they go through school. It’s a luxury to have an upper-middle class family who sends you to a four-year college and you don’t have to do any work-study or anything else while you’re going to school. So, students need to earn money.
EE: Yeah. That would be awesome if tuition would be less. Tuition just keeps going up every year and the State’s less [financially] supportive …
RA: Right, but the whole issue – right, the whole issue of financial aid is a looming – is a huge, is a huge problem with student financial aid and debt.
EE: Yeah, I forgot how many. There’s a term – there’s a figure in the billions for how much student aid students have accumulated …
RA: Exactly, so students need living wage jobs just as much as someone who’s supporting more than themselves.
EE: I’ve been critical of the pace of this. I’m not the only one. In one of the meetings in I think in February, and I thought it was councilmember Asher that moved forward. There were plans – there were suggestions by staff to take a community poll. There was a schedule and I think there was a motion to eliminate the poll in maybe one of the meetings. So I’ve used the term, “fast track” to describe that. You know, when you condense the schedule versus …
RA: Adopting a minimum wage – a new minimum wage for us would be on a fast schedule. I agree with you. The only thing I can say is that we’ve heard from various residents and business interest groups ever since this has come out. People are giving us loads and loads of emails with attachments and documentations of this and that. So, people are paying attention to this.
The fact that Berkeley and Oakland are already doing it, it’s like at some point it makes sense for us to do something. What we ultimately end up doing has yet to be discussed and decided by the council. I was out of town for the February 17th meeting so I didn’t participate in that discussion yet but people know how to contact us and they’re not shy. You’re on a certain Watergate member’s email string with, I don’t know, 40 people on it or whatever. So, we’re getting lots of input, we’re getting lots of feedback.
EE: But the condensed timeline will kind of limit the amount of feedback …
RA: You’re right, it’s a short timeline. It’s because we have to make up because we’re falling behind.
EE: Is there a reason that we fell behind? If the inception was 2006 and 2015 we’re just getting around to it …
RA: Sometimes you have to figure out when the time is right and it wasn’t right in 2006. The time is right to act on this now. The bigger players have acted. We’re only a one square mile city.
EE: But now we’re effectively leap-frogging the other cities …
RA: You ask do you see a logistical advantage of a regional model for businesses that operate in multiple cities. There is a logistical advantage to doing that, to starting in the same place. But at this point there is not a regional approach after that. As I gave you an earlier example, Berkeley doesn’t have a CPI increase factored into their minimum wage.
People might want to start at 12.25 because Oakland did. What happens after that? Everybody diverges and everybody’s phase and times and ending amounts are different and at different schedules. So, the regional advantage becomes lost over time because everybody is going to be doing something different unless they adjust later on.
EE: You can see the complexity of this for somebody like Chris Hillyard from Farley’s. He has a business in San Francisco, Emeryville and Oakland and if all three of you are on a different schedule.
RA: Yes, he’s already given a boost to his Emeryville employees to be on par with Oakland. Speaking of a smaller business, that has yet to be defined what a small business is. If there’s any kind of different kind of phase in schedules for a multinational corporation or for a small business we have yet to discuss that. I’m open to having that conversation with the council about how we handle the bigger business versus the smaller businesses.
One approach might be [putting] the smaller businesses on a different schedule than the bigger businesses. We have yet to see what would happen.
EE: But establishing that line of demarcation between a small business and a big business is still in flux.
RA: I forget which city still defines small as 10 employees. Well, that’s small. Right? Do we want to go that small? What’s small, what isn’t small? We have to have that discussion to define it.
EE: There’s national standards as well. Seattle has their own metrics. There’s data that we can borrow from.
RA: Some of the midwestern cities that have done this, they have different kinds of things as well. There could be some business sense to a phase in.
EE: You do see the advantage of a regional model for the businesses that do have businesses in both cities. Of course, then there’s the food truck idea of the businesses that are mobile that actually move across borders. How does that impact them? Do they all of a sudden have to turn the [wage] meter up once they enter the borders of Emeryville?
RA: I don’t know the legal answer to that. I would think that any business who has a business license to operate in Emeryville would be subject to whatever our minimum wage slash living wage ordinance ends up being. As long as they have a business license here. You asked about question 11. The Oaks Card Club historically has provided 7-9% of the city’s revenue.
EE: Not as much as I thought or overheard but it’s still significant. You’re approaching 10 percent.
RA: You asked what would happen to the city taxes if they closed their doors. We would lose seven to nine percent of our revenue.
EE: They’re not moving, we know that, although I’ve heard that Tibbits owns every club license apparently in the area. I don’t know what that means to his business model. He’s kind of got a favorable – almost a monopoly I would say of Card Clubs.
RA: He’s a very unique business. Your question 12 about the, some businesses moving their service jobs towards a tipless model or integrating a service charge into that. That’s, I guess restaurants mostly.
EE: It’s already happened. Commonwealth opened with that model. They’re going tipless. Scarlett City is [considering] moving towards that model I believe. Who knows if this is going to create a chain reaction and cause that …
RA: So I don’t consider this as having backfired. I think business owners need to decide how to run their own businesses. That’s a business decision that they make. So, I can’t really comment on if that’s a good thing a bad thing or. It’s how they decide that they’re gonna stay viable so.
EE: The thing is business will adapt right? If they are losing money they gotta figure out ways to plug those holes. Could it backfire in a sense that they reduce people’s shift or amount of hours? Take money away from them in other ways that will end up giving the employee less money ultimately.
RA: Maybe, I don’t know.
EE: I don’t know either.
RA: I don’t own a crystal ball.
EE: You don’t know how this is going to impact those businesses in other words.
EE: So going back to [question] 8, and it’s a huge presumption on my part, I would think that a lot of cities, we would love the [businesses] that could actually afford this to step up and do the right thing. Trader Joe’s is an example of a company that pays a living wage. It’s part of their model, they can afford it. I’d like to think Target could afford it if they … How about this, have you heard from Target?
RA: No. All the large employers have been totally silent.
EE: Because they can afford it right?
EE: Because they can afford it so, the question is, since they’re not going to put up a fight. I’m assuming that businesses that you’ve heard of have mostly been small businesses. Those are the ones crying, “OK, this is going to hurt right?” Is there any model where we can distinguish the corporations from the small businesses that we don’t want to hurt …
RA: Well, if businesses are successful, and that includes a business of any size, if a business is successful then why shouldn’t the people that help make that possible reap some of the benefit? If a café or restaurant isn’t successful then they’re not successful.
EE: OK, so it kind of goes back into the Brian Donahue viable business argument, right? If you can’t adapt to this wage structure then you were never really a viable business to begin with? And I’m not painting you into a corner where you have to agree with Brian Donahue but it sounds like a similar argument.
RA: I just think that the working people who make a business work should reap some of the benefit.
EE: If you’ve talked with enough businesses you know that they’re not really opposed to this. They’re not opposed to the idea of it. They want to help their employees. I assume most of them like their employees. It’s the overnight jump that is going to really hurt them. It’s the 60 percent overnight that is not going to give them time to adapt.
Food establishments run on 5-3% margin so, I mean, think about what that’s going to do to their profits overnight. They’re going to have to raise the food prices right, by as much as 20 percent.
RA: People may have to, yeah. Bruce Hilliard gave me a figure of about how much he’d have to raise prices to keep his current model the same.
EE: Was in the 20% spectrum I think?
RA: I don’t know, maybe he changes his business model. I don’t know. That’s for him to decide.
EE: So are you expressing confidence that business will adapt to this? That they won’t be impacted when you see the closures the doom and gloom scenario that some businesses are painting?
RA: Some people just might be eaking out a business. They might close. Then you could ask Brian Donahue if they should’ve been operating to begin with. I don’t know if this is going to be the “straw that breaks the camel’s back” for someone who’s struggling. I have a feeling if someone is really struggling they’re struggling for a whole host of reasons around marketing, the product, the service, whatever it is. It’s really hard for me to paint such a broad stroke with just one thing. That being said, labor costs are expensive and this will increase labor costs. Again, why have someone working at something that they can’t even afford to buy the product or service they’re providing?
For every dollar that enters into someone’s pocket, there’s like a threefold economic benefit of how that gets recirculated into the economy. The more spending power a working person has, the more they’re going to spend money and that’s going to help the economy in a larger perspective.
One of your last questions talked about today’s competitive market and how we’re helping small businesses …
EE: If I could preface it that, you touched on, “Hey, there may be some casualties here by this.”
RA: There might. Yes, if they’re that marginal.
EE: I think I could probably stomach that if Emeryville had this just robust small business climate. The truth of the matter is we don’t. There are just not that many small businesses in Emeryville. So, if the overall impact of this is trimming an already thin small business climate …
RA: Well, first of all, before you make a statement like that. You should check with our finance department about all of our business licenses for the businesses that do business here. We have a lot of small businesses of people who are in business for themselves or work at home.
EE: I’m one of them. This is not going to impact me though, I pay myself more than minimum wage and I don’t have any employees.
RA: Exactly. I think we have a higher percentage on a per capita basis who are self-employed. That’s not going to affect small businesses.
EE: You might be referencing, Google gave us the eCity award because we have a lot …
RA: It’s how many people have hit the Google search engine.
EE: I’m just referring to go up and down San Pablo or really on this side of the railroad tracks, how many small business do you count? On Bay Street there’s one. There’s Arts Africans. That’s the only “mom and pop” owned shop. There’s nothing at East Bay Bridge mall. There’s nothing at The Powell Street Plaza.
RA: You’re talking about retail. You’re talking about –
EE: Retail and food establishments. Which are you know, 90 percent of where the minimum wage jobs are, right?
RA: Right. So, to me this speaks to a lot of macro-economics and global influences that Emeryville just happens to show. We’re quite susceptible to those macro level economic forces about what’s viable or not. Over the years – this isn’t a direct answer but it’s the context of how difficult it is to open up a café. We’ve had so many mixed-use housing projects come along where they want the corner café set up. We cannot support corner café’s in every building. Bayside Park has the Treff Café. Icon was going to have this café. They’re going to be a café in every building. That is not viable either, right? So do I wish that we have that many? Yeah, but we don’t have the market to support all of those corner café’s in these mixed-used buildings.
We just can’t support it. And the fact of the matter is that some of the small businesses that are able to make a go of it capitalize on our daytime population not our nighttime population. That’s just a testament to what the demographics of the city are. Is that we have far more people working here during the day than who actually live here. They come in.
When the Promenade was built, it’s the little strip mall that has the CVS and the Arizmeni and all that. It’s like everybody got upset because IHOP went in and it was a so-called bad chain. We subsidized Arizmendi so much to have a worker own cooperative take hold there. CVS only agreed to do it if we allowed liquor sales in their drugstore the way alcohol is a drug so it kind of made sense.
We desperately wanted mom and pops in there. With the Grotto Burger now we have a couple starts a coffee shop there, Cup O’ Cabana. They lost their shirt and their home. They lost everything trying to keep their business afloat. They folded. We tried so hard to liven San Pablo with these independent stores and it just wasn’t working. I can’t tell you how much money redevelopment poured into that project trying to subsidize people. There’s an Asian Fusion Pearl drink place that was there and they folded. We cut them a break. Then we decided, for us to take control over the subtenants we will lease those spaces to try and find desirable tenants that the community wants. They couldn’t make it.
Is that a good expenditure of public money? To become the tenant of a shopping center and then trying to sublease to tenants that the communities say they want and they don’t make it.
EE: Well, if you remember there – a Starbucks went into that spot where Cup O’ Cabana is and they didn’t survive either.
RA: They decided to close, right. So, how many small retail and restaurants can we support here? It’s a really big question in my mind. I do know that viability is based – is highly dependent on the daytime population for those particular types of businesses.
EE: Touching upon encouraging small business in our city. Yeah, we can’t shoehorn in, we can’t subsidize it.
RA: We do, we built spaces for them, they still can’t come, they’re vacant.
EE: I’ve talked with enough small businesses who have opened in Emeryville that kind of outline the difficulties that they’ve had along the way. I mean, apparently Emeryville outsources their permitting. The guy’s only available two days a week. Really slows down their process. I’ve heard complaints about the Chamber of Commerce not doing enough for small businesses. Is there any discussion in this that we can …
RA: I don’t know what the role of a Chamber could be to help them. Maybe the new executive director has some ideas.
EE: Who is by the way?
RA: I’ve heard they haven’t begun their search yet for a replacement.
EE: I can talk to you about that separately but I’m kind of curious what’s going on with the Chamber. They’re awfully silent in this and a lot of it has to do with the timing of Bob Canter stepping down. I’ve even heard rumors of the Chamber consolidating with the Berkeley Chamber.
RA: I have no idea what’s happening.
EE: It just seems like a bad time for the Chamber to be reeling where it couldn’t step up to intervene and make their own suggestions. They haven’t even come out with an actual stance yet, have they?
EE: I’m assuming they would be against it, that’s kind of their job.
RA: Individual members of the chamber understand that it’s expensive. You can’t live off $15 – less than $15 here in the bay area. Individuals have told me that, they understand the need to raise the wage.
EE: OK. Well, this I feel is a big one. It’s the competitive disadvantage that this puts Emeryville’s small business in. So, I’m going to be running a series of small business pieces you know, voices directly from the small businesses themselves. One of the ones is Sal Bednarz who owns Actual Café and Victory Burger.
RA: Sal’s made some adjustments because of the open measure.
EE: He was in fact supportive of the $12.25.
RA: Yes he was.
EE: Bacano Bakery just down the street and there are going to be some situations where yes, in fact Oakland business faces an Emeryville business across the street. They’re going to have a different wage structure. Does it put Emeryville businesses at a competitive disadvantage when just a block away in some cases their salad is going to cost a dollar more than a salad across the street?
RA: It’s possible. Again, the viability of the business is based on its goods and services. This is a foodie area. People go where there’s good food. If you’re talking about a food establishment, they’re going to go to something because they like the food. The detractors of raising the local sales tax to fund something. Does someone make their decision on not buying something in some place because that sales tax is higher than if they were to travel someplace else? Well would the big ticket I think the answer is no.
Even if I were to go to another county to buy a, like a big expensive item like a car. The sales tax for a car is still based on the address where you live. So you still would pay the Alameda county sales tax at that rate. You tell me, will someone go to get a cheaper salad someplace else. I don’t know, I think they’re going to go where they like the food.
EE: They might have to find a way to cut some corners somewhere to – if they’re paying [more] labor costs. Cheaper ingredients? It seems like it would have to come from somewhere in order to make ends meet. Again, I don’t know. Anyway, so you understand my personal bias here.
RA: Yeah, you’ve been very clear. You want to support small business.
EE: Yes. I want to live in a city with a robust small business climate.
RA: And I wish we had café’s in every place where we built space for café’s. That hasn’t happened.
EE: Café’s, bars, restaurants. I feel like they’re as big a part of the community as the residents are. Establishing this vibrancy, more pedestrian [traffic] when businesses are open at night.
RA: We don’t have like a College avenue to stroll. You’re talking about the constraints of our physical infrastructure too. The place where people stroll at night is Bay Street shopping center. Everybody walks in Bay Street. People don’t want to walk on San Pablo when it’s dark. People will talk to and from their cars here at the Public Market but you’re talking about a physical layout that we also don’t have to make that happen.
EE: It’s pedestrian infrastructure. The railroad tracks that split our town. The lack of Bike/Ped bridge from Bay Street to Novartis.
RA: What you want requires a level of internal connectivity and a small block grid structure that Emeryville doesn’t have. That gets into the physical layout of this town. We’re cut by I-80. We’re cut by the bridge. We don’t have a college avenue where people would feel comfortable walking at night. We don’t have that physical frame on which to hang a variety of vibrant small businesses. We have Bay Street and people are there out in numbers at night. I wish we had a college avenue. I wish we had a fourth street. They Berkeley kind of or Shattuck avenue kind of thing. We’re not built that way.
EE: It’s just inherently, I don’t know if flaw is the right word, but we’re just not structured in a way that can accommodate that.
RA: We don’t have the physical layout. I wish we did. Maybe you disagree with me. Maybe you think there’s a way to make that happen.
EE: I see it happen in patches of Oakland but I don’t see it happening in Emeryville. I don’t know what the difference is. I see along Golden Gate. They’re starting to get some traction there. A lot of it has to do with sales businesses.
RA: That block has really changed.
EE: There’s a yarn store. There’s a cupcake store. There’s a lot of kind of small, hyper-local businesses.
RA: Do you see that happening on Shellmound I don’t know how that would happen.
EE: We’re holding out hope that maybe Sherwin Williams will figure out a way to make that happen. I think people are skeptical of this.
RA: We can build little enclaves but it’s never going to be a College avenue.
EE: I think we’ve pretty much covered the bulk of the points here for the article from the questions I’ve given you. Anything else you want to cover for the residents of Emeryville that will kind of help them understand what our expectations are there and just, really just outreach to small businesses. I’d like some just reaffirmation that they’re not going to be left behind in all this.
RA: We’ve been listening to all the input and there’s going to be more public comment before we move forward with any decisions. There’s going to be a chance to discuss anything we might tweak what ultimately we put into law.
EE: Last question, If the city ultimately, I don’t want to use the word settle, but if we did in fact use the Oakland FF $12.25 model, first of all, is there an opportunity there? Would you perceive that as a loss for the city if we did compromise there?
RA: Well it doesn’t fulfill a living wage standard. People could potentially be working full-time and still live in poverty.
EE: Maybe not overnight but there is a path there, right? To the $15 wage, in Oakland’s model.
RA: Yeah, I forget what they say, 2017 they’ll get to some dollar amount. I have to look at FF again, I don’t really know. As I mentioned earlier, we’re kind of rehashing. Yeah, I don’t have anything else to add about that.
EE: OK, well, I think we covered it all. Again, I thank you very much [Mayor] Ruth Atkin for the outreach here and addressing these questions which I think are an important part of the discussion in this important thing for the city.
RA: Thank you Rob.
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This interview references:
“EE: The Oakland’s FF is tiered in a way that there’s incremental bumps but it’s not necessarily equation based with a CPI like a Emeryville version would be, right?”
Oakland’s FF is not tiered with incremental bumps. Any increases under Initiative FF would be based on increases in the cost of living. San Francisco’s measure does have incremental bumps until it reaches $15/hour in 2018. With a guesstimate annual increase in cost of living of 2.5%, Oakland would reach $15/hour in 2023. If inflation is much higher, it would get to $15/hour earlier than 2023 (for example, a 5% annual increase in cost of living would bring Oakland to $14.18 in 2018).
The Oakland Minimum Wage Increase Initiative FF, November 2014, states:
“This measure would establish a minimum wage in the City of Oakland of $12.25 per hour, beginning on March 2, 2015. The minimum wage rate would increase yearly on January 1st based on increases in the cost of living.”
The reason I have supported the San Francisco Minimum Wage Ordinance Proposition J model of increases is that it has a significant initial increase and then it gradually increases incrementally until it gets to $15/hour in 2018. The San Francisco model schedule of increases is:
$11.05 January 1, 2015
$12.25 May 1, 2015
$13.00 July 1, 2016
$14.00 July 1, 2017
$15.00 July 1, 2018
July 1st each following year: The Minimum Wage shall increase by an amount corresponding to the prior year’s increase, if any, in the Consumer Price Index for urban wage earners and clerical workers for the San Francisco-Oakland-San Jose, CA Metropolitan statistical area, as determined by the Controller. [Note: There is also language that states that the cost-of-living increases are limited to two narrow categories of employees and I don’t claim to understand how this effectively plays out, but have included the “Full Text of Proposition J” as linked from the San Francisco Office of Labor Standards Enforcement for anyone who wants to attempt to figure this out]:
Thanks Betsy. I added an addendum to that excerpt referencing this comment and clarifying. Please note this interview took place 3 weeks ago.
Great interview, Rob. And an interesting read. Though I disagree with the particular wage increase on the table, Mayor Atkins makes a lot of reasonable points.
But the thing that concerns me over and over again – among citizens and politicians – is the idea they have that maybe this will just push a struggling business out…break the camel’s back…or force us to just ‘rethink our business model’. That will be true in some cases; struggling businesses may go out of business because of such a strong wage increase. But also, as we all say, often, the food industry operates on a tiny margin and can’t just ‘rethink’ our business model to support this kind of increase.
The other idea I found disturbing is that, on the flip side of that argument, she says if businesses are successful (not ‘struggling’), what’s the problem with sharing that success with our employees? Again, ignorant because of margins, and standards – that I believe in – about compensation and how that trickles down among the crew. For restaurants, success isn’t usually defined by a large margin; it’s more complex than that.
A case in point for Oakland is a marginally successful startup that makes an excellent edible, so popular that expansion of the kitchen now has to happen lest the growing demand choke the capacity of the kids who began this enterprise less than three years ago.
We’re trying to get the City’s BRE (Business Retention & Expansion) squad to come in and see if there’s some way to offset the labor costs (food-related businesses generally operate on a higher percentage of profit need for labor than the usual, rule-of-thumb 20% seen in most business plans) during this period by offering some sort of City program or other, but the pull towards San Leandro looks like the owners will have to make that decision, as it’s the only one that offers an affordable solution right now, and the City of San Leandro is especially accommodating of new business whereas the City of Oakland is still trying to figure out whether it even needs small business development.
So just about everyone wants to see a healthier minimum wage and knows innately that the mega-businesses can easily afford it, even if it means cutting back on their massive advertising budgets every so often. But the startups and micro businesses shouldn’t be the ones to bear the burden here; after all, the tax breaks and subsidies that are granted to big business all across this country outweigh any social security program(s) we have.
Caving in to the Occupy-minded activists who insist on lumping all businesses, big or small, into the same category is, at least to me, a betrayal by our representatives of the people who actually voted them into power – not the crowds of people who love to churlishly bash in storefronts in protest of the perceived inequities of capitalism. Let’s hope that Ruth and Jackie and all rest can work to find a more creative solution here rather than surrender outright to some doctrinaire rationale that can only result in the very opposite effect of what economic development policy has traditionally meant to accomplish in Emeryville.
Great interview. Mayor Atkin appears to have a very strongly held belief in a “living wage”. What’s scary is that she doesn’t appear to have any idea what impact this will have on Emeryville or even to what degree it will help Emeryville residents. She seems resigned to the fact that small businesses in Emeryville are headed for extinction.
It’s frightening the number of times she says “I don’t know”. I think it’s great that she has the courage to take a stand for something she thinks is right. But, as Mayor, that’s not enough. She has to be willing to take the time to find out what the unintended consequences of her proposal will be.
Emeryville is not a social experiment. Ten years from now, it’ll be a little late for us to say “Wow, that was a disaster! Maybe we should have done an impact study.”
Our neighbors to the south have volunteered to be the guinea pig. Let’s step back and watch what how that plays out before we rush in.
I was talking to two waitresses in an Oakland restaurant last week. One had just had her hours cut. The other was complaining that the price of everything at the supermarket has just gone up. After mentioning an item she frequently bought that had gone up five dollars in the last two weeks, she said “I don’t think people thought that far ahead.” Reading this interview, I didn’t get the sense that our foresight in Emeryville is much better.
This message of “Enough thinking, let’s act” is not very progressive.
If we’ve already done enough thinking, why doesn’t anyone know what the financial impact will be on our city?
Thank you for this thoughtful and spot on comment!
In your opinion piece preceding the interview with Mayor Ruth Atkin, you got our name wrong. We are “The Secret News” not “The Secret Online.” Please correct. Thank you!
A low margin business does not equate to a business that isn’t viable. A huge number of highly successful businesses are low margin. Actually, it’s inevitable that most successful businesses in a competitive market end up being low margin (but high volume). Restaurants are an extremely competitive market, and so are, inevitably, low margin.
Here are some numbers that bear this out. According to Deloitte & Touche, the average profit margin for full-service restaurants:
– With checks under $15, average profit margin = 3%
– With checks from $15-25, average profit margin = 3.5%
– With checks above $25, average profit margin = 1.8%
About 30% of a restaurant’s costs are its employees. So, you raise this by 60%, and you’re looking at an 18% increase in costs. So owners are marking 3% and you raise their costs 18%, then clearly something has to give.
Are all restaurants “struggling” and “non-viable” or have to “rethink their business model”? Do we want to reward the big national retailers for being incredibly high margin by driving the smaller competitors out of business?
There’s a really good reason that Mayor Atkin hasn’t heard anything from the big box stores. This legislation is great for them. Walmart didn’t become massively profitable by providing the best quality and service.
They became massively profitable by being the only game in town.
Well Walmart is already selling groceries, I guess next up they open restaurant chains or merge with McDonalds and the “problem” is solved! 😉
One other thing that’s missing in this discussion is that EVERY small business struggles at some point. There’s an amazing parallel between small businesses and minimum wage earners.
Almost everyone reading this earned minimum wage or near minimum wage at some point in their lives. But most people reading this aren’t in poverty now. Why is that?
Most successful large businesses were once struggling small business.
A small struggling business is the first step toward a large profitable business. An entry level job is the first step toward a financially viable household.
Most people who take minimum wage jobs quickly advance through them to higher positions with more earning potential.
Entry level jobs are important because they are a bridge between being inexperienced or having few marketable skills toward being able to earn a living wage. Similarly, small struggling businesses are figuring out how to become big, successful businesses.
Talking about a “living wage” assumes that a minimum wage job is an end goal, and it assumes that most people earning minimum wage are trying to run a household with the money.
But this simply isn’t true. Over 80% of minimum wage earners live in households that are above the poverty line.
Both the poor and the small business are looking for a way to take their potential and grow. If you make it harder for the unemployed to get jobs (by raising the bar for what it takes to be employed), and if you make it harder for small businesses to get by (by making it nearly impossible to compete), you’ve just broken the system that helps people get out of poverty.
Thank you Rob for this interview and in general for putting so much energy into getting the issues on the table around this proposed wage increase. I must say I feel even less confident that a real analysis and consideration has been put into this by the council.
As a small business owner I support the effort to work towards a sensible path that increases the minimum wage. That said this current “fast-track” proposal dramatically increases the wages and from my perspective will negatively impact many small businesses in our area. It feels reckless and without a proper investigation.
Why do we have to be different that our neighbors? Why not work on a regional fair and just increase? Why is the council in such a rush? Who is spearheading this and for what purpose?
If this passes with one swoop of the pen the Council has just put numerous Emeryville small businesses at a competitive disadvantage. What affects one business here in a small town affects us all. Isn’t it the council’s job to serve both the residents as well as the businesses fairly?
is her argument that we are going to solve the problem of the high cost of living in this area by driving up the price of everything? how exactly does that work?
Rob, thanks so much for doing this interview and thanks to Mayor Atkins for engaging in an in-depth discussion. Some great comments here and I have to agree that it sounds like there’s a lot of unknowns. I don’t think anyone in Emeryville, including most business owners, doesn’t support increasing wages for workers. But there seems to be a lot of fear that consumers won’t countenance the required price hikes to sustain such a large wage increase over such a short time period.
PS – I think it’s hilarious that anyone would accuse you of “doing it for the clicks”. I mean maybe if you converted to a porn site….
Thanks Phil, If I don’t make money off this soon to sustain it, I may have to! 😉
The cavalier attitude that certain members of the Emeryville City Council are taking towards the possible failure, should they chose to enact the highest minimum wage in the country, of a number of small businesses in their town is both hurtful and infuriating. The absolute callousness towards small business owners who could face financial disaster and towards the workers employed by those small businesses who could lose their jobs is staggering. They shrug off any responsibility for such outcomes by maintaining that if a business is vulnerable to failure as a result of the proposed minimum wage of $14.42 then they probably aren’t viable anyway. The inference is that if small businesses fail it will be their fault and they deserve it. They seem to have absolute faith in the rightness of market outcomes and to believe that economic Darwinism is the best method to determine what sort of businesses Emeryville will have. These are progressives?
I can only speak to the restaurant business. In an industry where net income is generally less than 5% and payroll runs around a third of total expense, virtually every restaurant is vulnerable to a sudden, drastic increase in payroll expense. Mayor Atkin says that restaurants may have to change their business model or raise prices—which, she thinks, is no big deal because, she believes, consumers don’t make their choices based on price but on quality of food and service. So again, if you raise prices but go out of business because you sell less food, it’s obviously your fault and you deserve it. I would certainly agree that consumers don’t make their spending decisions solely on price, but to say that price isn’t a factor is nonsense. The sharper the increase in the price of something the greater consumer resistance. And in a period of sharply rising prices (as will surely happen in the restaurant business as a result of minimum wages increases) consumers will be looking for the best value among similar products. If a consumer can buy a comparable sandwich in Emeryville or a block away in Oakland for a dollar less, most often they will buy in Oakland. It really will matter Mayor.
Re: your vitriolic critique of Jac Asher
Our elected officials vow to represent their constituents, not to give interviews to every blogger who requests one. As I see it, City Council members have these responsibilities: to be informed on the issues, to listen to constituents and to make the best decisions possible for Emeryville. Jac fits this description, and in my view is a stellar council member. As just one example, Jac initiated the Charter City initiative, whereby our city collects transfer taxes on the par with other E Bay cities, so that E’vlle can maintain a high level of services. Our elected officials may grant an interview to a journalist who she/he feels will represent his/her views intelligently and fairly. I suspect this was not the case here, Rob, and Jac does not need to answer for that decision. You owe her an apology.
Oh, and did you mean to call RULE, Residents United for a Livable Emeryville a “special interest group”? If so, I as a concerned resident take issue with you. RULE is a group of dedicated residents from all over the city meeting with the goal of improving the quality of life for all of
Thanks, Judy Timmel
Thanks Judy, I’m not sure what makes you think as many residents are behind this as you presume. You have surrounded yourself with a very narrow spectrum of Emeryville politics so it might surprise you to know that not everyone thinks like RULE. Because of RULE’s affiliation with pro-union groups and its campaign donations, I consider them a special interest group. This is not necessarily a “dirty word”. As mentioned in the article, Jac had the opportunity to pursue other avenues for her perspective but her strategy appears to be containment instead of open dialogue. This is not my definition of Democracy. Should RULE Member Brian Donahue of The Tattler issue an apology for every time he was critical of a Councilmember? I’m disappointed that you think criticism can only come from one direction.
As a small business owner in Emeryville, I invited all of the members of Council to my office to discuss the impact of this proposal. Three responded (which is awesome). Two visited (hats off to those two!).
Two didn’t even take the 30 seconds required to politely decline the offer. Jac Asher was among those two.
This wouldn’t be so bad except that during a Council meeting, she stated more or less that she already knew what the businesses and workers of Emeryville think on the issue and hence we don’t need more discussion on something she already knows the answer to.
Raising Emeryville’s minimum wage out of the blue to the highest in the country with two opportunities for public input (of which one is the meeting where the proposal was introduced) is not normal operating procedure for a city.
So, if you combine her reluctance to meet, her reluctance to interview, and her reluctance to have the public participate in the discussion, I think it’s a fair conclusion that something is going on that doesn’t look much like what you want in a little representative democracy.
My theory is that this proposal is not so much about representing the city but about enacting an ideological position she holds.
I think talking and listening to the public and thinking about what they say is really the lion’s share of this job she was elected to do. If she’s not willing to do it, then maybe she deserves a bit of “vitriol”.
Thanks for your fair and honest assessment that verifies what many others have reported. I think ultimately Asher is a good person who’s heart is in the right place but she lacks the understanding of how business works outside of the idealistic bubble of academia where’s she’s been for so long.
At the last Council meeting, I think it became very clear that this is all about Jac Asher and not at all about Emeryville or the poor. During the discussion following public comment, the other Coucil members timidly suggested changes to the ordinance to mitigate its damage. Asher would give a lecture and shut them down every time. It was like watching the middle school student coucil meekly fight their faculty advisor.
Why did the room erupt in applause when one speaker said how disappointed he was in the City Council? Did anyone else notice that only Jac Asher and the union reps commended the Council for its “leadership”?
Someone on Council needs to realize that just because she helped get you elected doesn’t mean she outranks you. Stand up for the city and its residents, show some leadership, and demand that this ordinance be given the time, consideration, and study it deserves.
I think this is a fair assessment and I’ll echo your observations. Asher is far and away more assertive (some would say “pushy”) than the other “junior” councilmembers and they appeared to kowtow to her. Full disclosure: The “one speaker” was myself.
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