In light of recent discussions regarding a $14.42 livable wage ordinance in our city that would be the highest in the nation, The E’ville Eye wanted to provide a forum for small business owners and stakeholders to speak out on the impacts this will personally have on them and their opinions on how best to implement this. Our second entry is one of the city’s few adult recreation options: The Broken Rack Pool Hall owned by husband & wife tandem Wayne & Marilyn Boucher. The Broken Rack has been an Emeryville business for 17 years and employees 25 mostly part-time people.
The Broken Rack originally opened in the Emeryville Public Market in 1998. After the Public Market was sold in 2013, their business had to either relocate or close. The Bouchers shopped around other spots in the East Bay, but ultimately decided to stay in Emeryville after finding a suitable location at 5768 Peladeau. Their preference for this location partially hinged on its proximity to a planned Greenway segment at Powell & Hollis that would enable outdoor patio access to their patrons and a substantial benefit to their business. This was expected to be complete by 2013, yet the City has still not broken ground here and it remains a dirt strip.
The Broken Rack reopened in July of last year at a considerable personal expense amid many delays including a 3-1/2 month closure. Business has been good since the reopening, but the Bouchers say that had they known that less than a year later the City might increase the minimum wage by 60%, they would not have considered Emeryville a favorable environment for small business and would not have chosen to try to stay in business here. The following letter expresses their thoughts on this proposed minimum wage ordinance.
The complete Proposed Minimum Wage Ordinance Draft can be read here.
Dear Emeryville Councilmembers & Community,
Does the City Council want to drive small, independent businesses out of Emeryville? That could be an unintended consequence if the Council votes to go forward with its proposal to raise the minimum wage in Emeryville to $14.42 an hour—which would be the highest in the country and second highest (next to Australia) in the world!
We all know the minimum wage is going up across America. It’s inevitable and long past due. My husband and I own The Broken Rack, a pool hall with restaurant and bar located in Emeryville. Like many other small business owners we support raising the minimum wage. After all, in a small business the people who work for you are people you know. We simply want to see the minimum wage increased in a thoughtful, fair way that allows businesses like ours to make the adjustments needed to stay in business and puts us on a level playing field with other small businesses in neighboring communities. The proposal before the Emeryville City Council does neither.
Make no mistake about it, in the restaurant industry at least, increases in the minimum wage must be paid for by the consumer in the form of higher prices. In an industry of notoriously low profit margins the increase can’t be simply absorbed. Some of us will try to rework staffing models—reducing the amount of work available and service levels—but all of us will have to raise prices. And it’s an economic truism that when prices go up, demand goes down. When prices rise across the board and over time, consumers adjust. If prices are raised too abruptly, the result can be decreased revenue in combination with rising costs—a recipe for going out of business.
Oakland merchants have been vocal regarding their concern over the impact on their businesses of that city’s recent 36% increase (from $9.00 to $12.25) in its minimum wage. But at least Measure FF raising the minimum wage in Oakland was the topic of many months of public discussion and a general vote. In San Francisco the electorate voted to raise their minimum wage from $9 in stages, reaching $15 in 2018. The Emeryville Council proposes to raise this city’s minimum wage by 60% all at once, with virtually no advance warning or public discussion, let alone public vote. And it would burden Emeryville small businesses with a minimum wage 18% higher than their counterparts in Oakland, the bay area city with the next highest minimum wage. There is the very real possibility that the combination of the magnitude of the increase and the disparity with neighboring Oakland will drive some of our small businesses out of business, putting low wage earners that are intended to benefit out of work instead. Is it likely under these conditions that Emeryville will attract other small, independent businesses to replace those that are lost?
My husband and I would welcome a regional minimum wage of $12.25. It would help us to do something we would like to do anyway—raise the wages of our lowest paid employees—without putting us at a competitive disadvantage with similar establishments. We believe the resulting price increases would be in a range that the public would support. It seems to us that the reasonable and responsible course for Emeryville to take is to align itself with the Oakland model. There will be a meeting of the Emeryville City Council on April 7 where there will be a reading of the proposed ordinance and a study session. The council is fast tracking this with plans to take action on the proposal in May and have the new minimum wage in place July 1. We hope that Emeryville residents will join with us and other small business owners in calling on the Emeryville City Council to reflect on the impact this ordinance will have on local small business and take a more balanced approach by enacting a $12.25 minimum wage—fair to Emeryville workers and fair to Emeryville small business.
– Marilyn Boucher
The Broken Rack Inc.