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10/21/2016
EmeryvilleBusiness
ConditionsSurvey:ImpactofMinimumWageandPaidSickLeaveOrdinances
LeahMowery,ShantiJensen,StephanieShafer,MPP/MBAStudentsKateKarniouchina,AssociateProfessorofBusinessLorryL.LokeySchoolofBusinessandPublicPolicy,MillsCollege
2
ExecutiveSummaryThis report summarizes current state of economic conditions facingEmeryville businesses and compares some current statistics to those fromoneyearago,beforeminimumwageandpaidsick leavechanges. Italsosummarizes theoverall sentiment towardthesenewordinancesexpressedbythebusinessownersandmanagers.
In July 2015, Emeryville made news byraisingitslocalminimumwageto$12.25forsmall businesses, and $14.45 for largebusinesses. With the previous minimumwageat$9anhour,thiswasa36%jumpforanysmallbusinessanda60%bumpforanylarge business that employed minimumwageworkers.Inaddition,theCityaddedaPaid Sick Leave Ordinance that gaveemployeeswhoworkedtwohoursormoreaweeksickleaveeligibilitywithacapof48hours.
While this increase made Emeryville thecitywiththehighestminimumwageinthecountry,Emeryvillewasnotthefirstcitytoset the trend. In March 2015, Oaklandraised its minimum wage to $12.25 withembedded paid sick leave requirements,San Francisco raised its minimum wage inMay,andBerkeleyfollowedsuitinOctoberofthesameyear.
As Emeryville gets set to introduce a FairWork Week ordinance, this survey wasconducted to assess how businesses arefaring with the changes, economically aswell as attitudinally, and to assess theirresilience.
Looking at overall economic conditions,revenues are increasing, but not as rapidlyas costs. While half of the surveyedbusinesses have experienced a growth inrevenues over the last year, close to 80%have experienced increased costs. Risingsupply chain (i.e., vendor) costs werenamedasthenumberonecause.
While many argue that a minimum wageincrease causes businesses to cut jobs,wefoundthatmostcompaniesdidnotchangeinsizeoverthelastyear.Morethanhalfofbusinessesmaintainedthesamenumberoffull time employees (FTE), and those thatexperienced changes were split betweenFTE increases and decreases. The foodservice sector saw the greatest increase infull-timeemployees.
3
About60%ofbusinessessawanincreaseinpayrollcostsoverthelastyear,andclosetoa quarter saw an increase of more than10%. The minimum wage increase wascertainly a factor in payroll increases, butsomebusinesses indicatedtheygaveraisesto their employees who were alreadyearning above theminimumwage level inorder to stay competitive and to keep upwith the rapidly increasing cost of living intheBayArea.
Half of Emeryville businesses have raisedtheir prices over the last year, with 37%increasing prices above the Bay Areaaverage price index increase of 3%.Furthermore, “raising prices” is the mostcommon anticipated change thatbusinesseswillmakeinthenextsixmonths.
The majority of business had neutralresponsestotherecentminimumwageandpaidsickleaveordinances,frequentlycitingthat theywere not affected or concerned.The food service industry expressed thegreatestfrustration.
Responses fromthefoodsectorpointedtothe negative impact of these changes onthealreadystrugglingbusinesses. Ofotherwell-represented industries: retail sectorhadapositivereactiontothechangeswhilemanufacturingremainedmostlyneutral.
The greatest challenges that businessowners/managers see themselves facing isfinding skilled employees, rising rents, andincreasingpersonalcostsofliving.
Our respondents were mostly smallbusinessownerswhohavebeeninbusinessfor over 10 years. The minimum wageincrease proved to be only a part of theoverall complexity of operating a businesswithintheBayArea.
Whilethereboundingeconomyhasbroughtaboutanincreaseinsalesandrevenuesformany businesses, vendor prices formaterialsandserviceshavealsoheatedup,rentshaveincreased,andpersonalcostsoflivinghavegoneup.
WhethermandatedbytheCityorbynecessity of to stay competitive inthe Bay Area, business ownersindicate that they had to increaseemployee pay to make sureemployees can afford to live wheretheywork.
Overall,most businesses plan to remain inEmeryville and would most like to receiveassistance from the Citywhen it comes tomarketingtheirproducts.
4
SampleSize
A total of 663 Emeryville businesseswere contacted by the research teambetween August 24 and October 3 of2016. The Initial contactsweremadeby phone, email, and via in-personvisits. Business contact information(i.e., phone numbers and emailaddresses)wereobtainedbycombiningseveral information sources: City ofEmeryville business database, severalonline directory/business listingresources,andtheLittleCityEmeryvillebusiness association contact list. Thesupplemental in-person outreach wasconducted throughoutthe entire city ofEmeryville to everybusiness where thephysical access wasallowed.431 businesses werecontacted directlythrough in-person
visits.104businesseswerecontactedbyphone and were emailed a link to thesurvey.128businesseswereexclusivelysent survey links and request toparticipate by email. Paper copies ofsurveyswereeither left tobe filledoutorlinkswereemailedasfollowuptoin-person contacts. Follow up outreachwasconductedthroughin-personvisits,throughemailreminders,orbyphone.Of the 663 businesses contacted, 160surveyswerecompleted.Abreakoutofresponse frequencies by initialcommunication mode is detailed inFigureA.
FigureA:CommunicationModeandResponseFrequency
SampleSizeandMethodology
149
56
282
99
122Responded toSurvey,ContactedinPerson
Responded toSurvey,ContactedbyPhone
Responded toSurvey,ContactedbyEmail
DidnotRepond,ContactedinPerson
DidnotRepond,ContactedbyPhone
DidnotRespond,ContactedbyEmail
5
SurveyInstrumentandDataCollection
The survey was based on a previoussurvey conducted by Mills College in2015 for the City of Oakland.1Modifications were made to meet thespecificneedsofEmeryville. Questionswere formulated to assess the generalbusinessconditionsinEmeryvillebeforeand after the implementation of theminimum wage and sick leaveordinances that were enacted in July2015. City of Emeryville staffcontributedtosurveymodifications.The survey included a combination ofmultiple choice, scale, and open-endedresponse questions. City staffexpressed a desire to have as muchknowledgeof the current stateof businesses in the area aspossible and learn about thenuanced reaction to the newordinances. Therefore, open-endedresponseswereincludedto capture as muchunanticipated reactions aspossible. Where appropriate,these open-ended responseswere categorized through contentanalysis.
Extensive outreach efforts were madewith 2 to 3 follow up contactsconductedwitheachbusiness. Inspite
1AworkingpaperbasedontheoriginalsurveybySepiAghdaheeandCarolynSherwoodCallisavailableuponrequest.
of these efforts, there were somebarriers to survey completion. Asshown by Figure B, some businessesdeclined to participate outright, someowners/managers were too busy orlacked interest. Other firms facedcorporate restrictions on informationsharing, or were not willing to shareinformationwiththeCity.However,wemanaged toachieve the response rateof just below25%,which is very goodfor this type of a project. We arethankful to the business owners whosubmittedtheirresponses.FigureB:CategoriesofNon-Response
Emeryville has a large number ofnationally owned/franchise businesses,whichposedchallengesfortheresearchteam in terms of gaining access todecision makers. Finally, many smallbusiness ownerswere too busy and/orfelttoooverwhelmedwithtaskstotakethetimetoparticipate.
98
10299
102
10 ExpressedWillingness,butdidnotCompletetheSurveyDeclined,TooBusy
Declined,CorporateRegulations
Declined,Indifferent
Declined,Unwilling
6
Theretailandfoodserviceindustriesaremostheavilyrepresentedinoursample,mostlyduetotheeasyaccesstotheirbrickandmortarlocationsinadditiontotheirprevalenceinthe several shopping areas located in Emeryville. Also well represented are themanufacturingbusinesses,suchaswindowanddoormanufacturers, foodmanufacturers,andmetalfabricatorsscatteredthroughoutEmeryville’sremaininglight industrysections,and the health carebusinesses concentrated inthenorthendofthecity.
Frequency of surveyresponse by industry ispresented in Table 1.Industries that had morethan10responsesincludedRetail Trade, FoodServices(restaurants, cafés, orbars), Manufacturing,Health and Social Services,Construction, and FastFood. Together, theresponses from the twoFood Services categoriesconstituted 28 out of 160respondents, or 17.6% ofoursample.
TABLE1:SurveyResponsesbyIndustry
Industry Count PercentageRetailTrade 20 12.5%FoodServices,Restaurant,Cafes,Bars 18 11.3%Manufacturing 15 9.4%HealthandSocialServices 12 7.5%Construction 10 6.3%FoodServices,FastFood 10 6.3%Professional,Scientific,andManagement 8 5%e-Commerce,Communications,Technology 7 4.4%OtherServices 7 4.4%FinanceandInsurance 6 3.8%RealEstateandRentalandLeasing 6 3.8%Arts 5 3.1%RetailTrade,Apparel 5 3.1%Architecture 5 3.1%WholesaleTrade 4 2.5%Fitness,Recreation,Athletics 4 2.5%Biotechnology 3 1.9%Entertainment 3 1.9%BeautyandWellness 3 1.9%Accommodations 2 1.3%EducationalServices 2 1.3%FoodServices,market 2 1.3%Transportation,Warehousing,andUtilities 2 1.3%Noindustryinformationprovided 1 0.6%Total 160 100
BusinessesandIndustriesRepresented
7
CompanySizeandLengthofTimeinBusinessThe majority of businesses in oursamplehavebeenoperatingforover10years.65.4%ofrespondentshavebeenin business for over 10 years, and only10%havebeeninbusinessforlessthanthreeyears.Respondentsarealsomostlyverysmallbusinesses. 63.9%, of respondentsreportedhavinglessthan10employees(SeeFigureC). Emeryvilledefinessmallbusinesses as having up to 55employees. In our sample, 93% ofrespondentsfallintothissmallbusinesscategory.
Asdiscussedearlier, in-personvisits ledto the highest response rates andgettingaholdofasmallbusinessownerwasmucheasier thangainingaccesstothemanagementofalargerfirm.Businesses with 56+ employees aremore likely to be nationally owned, orto have office managers or otheremployees that must communicatemessages to upper management,decreasingthepersonalconnectionandlikelihoodofobtainingresponses.
FigureC:NumberofEmployees
64%15%
14%
4% 3% 0-10
11-20
21-55
56-100
101-300
8
BusinessareExperiencingaSharpIncreaseinOverallCostsandModestIncreaseinPricesandRevenues
To get a sense of the financial state ofEmeryville businesses, we asked howoverall costs compared to a year ago.Themajorityof localbusinessessawanincrease in their costs, with very fewexperiencingstablecostsandonlysevenreportingadecreaseincosts.While theminimumwage increase hascontributedtotheincreaseincosts,themajority of businesses that gave usdetailed explanations attributed theirincreasestohighercostofrawmaterialsor services provided by their vendors.Further analysis of write-in responsesindicated that Emeryville is alsoexperiencingtherentincreasesthatareaffecting businesses across the BayArea. Table 2 presents a summary ofprominent cost increase responses.2Less frequent responses includedincreased costs of utilities, insurance(including payroll insurance), and statefees.
2Multiplereasonscouldbeprovidedbythesamerespondent.
FigureD:ChangeinOverallCosts
Table2:ReasonsforIncreasedCosts
Count Percent
Materialsandservices 22 44.9%
Labor 16 32.7%
Rent 14 28%
BusinessConditions
9
Due to a limited number of write-inresponses regarding reasons behindrising costs, little insight can be gainedaboutindustryspecificdynamics.Table3 highlights some of the identifiedclusters. The cost of materials wasespecially noticeable in Arts, FoodServices, and Manufacturing, whilelabor costs were a major source ofworryforFoodServices.
Table 3: Reasons for Increased CostsResponsesbyIndustry
Industry Materials LaborArts 3 FoodService 6 8Manufacturing 7
While costs are increasing for themajorityofbusinesses,revenuesarenotkeepingpace. 78.5%of businesses are
seeing an increase in costs, and lessthan half are seeing an increase inrevenues.Nearlyaquarterhaveseenadeclineinrevenuessincelastyear.
FigureE:RevenueChanges
.
Increasesinrevenues(seeTable4)weremostlyattributedtoanincreaseinsales.A quarter of the detailed responsesattributed their increase in revenue tothe general economic recovery.
3Notethatonly24businessesgaveusdetailedresponseswithsomelistingmorethanonereason,thereforethetotalcountexceeds24.
TTable4:ReasonforRevenueChangesReason Count PercentSalesincreased 12 50%3Salesdecreased 7 29.2%Overalleconomyrecovering 6 25%
Prices 4 16.7%
40.6%
18.1%
23.8%Increased
Decreased
Stayedthesame
10
WorkforceisStableDespiteRisingPayrollCostDespite the introduction of theminimum wage increase ordinance,businesses did not seemuch change intheirworkforcesize.Respondents were asked about boththeir current size (category) and theirsize (category) before theimplementation of the minimum wageordinance. Table 5 shows that overallwedidnotseeashiftincompanysizeatthe aggregate level. Some respondentsdidnotfilloutboth2016and2015firmsize information. Therefore, theywereexcludedfromthiscomparison.
Wealso lookedat transitions fromonesizecategorytoanother.ThisanalysisispresentedinAppendixAandshowsthatmost companies maintained their size(with the clear dominance of diagonalelements in the matrix representingtransitions from one category toanother)withtheremainingcompaniesequally divided between the onesgrowinganddecliningintermsofsize.Table5:NumberofEmployeesBefore/AfterOrdinanceImplementation
Full-TimeEmploymentRemainedSteady
Closetohalfofthebusinessessurveyedsaw no change in the number of full-time employees. The percent ofbusinesses that saw an increase ordecreasewassplitfairlyequally,leavingEmeryvillewithasteadylevelofoverallfull-timeemployment.
Respondentswereaskedtowriteintheexactnumberofcurrentfull-timeemployees(thoseworking35hoursor
moreaweek),andthenumberoffull-timeemployeestheirfirmhadasofJuly,2015,i.e.,beforetheimplementationoftheminimumwageordinance.Becausesizecategoriesdonotdetectexactchanges,byallowingbusinessestofillintheexactnumberswecoulddetecthowmanyhadactualchangeinfull-timeemployeestatus.
SizeClass 2015 20160-10 83 8411-20 25 2421-55 21 1955-100 3 5101-300 4 4Total 136 136
11
Ofthe99businessesthatprovidedvaliddata,53.5%sawnochangeinfulltimestatus.21.2%sawan increase in full-timeemployees,and25.3%sawadecrease. Apossibleexplanationforthealmostequalincreaseanddecreaseinfull-timeemployeescouldbeimpacts from theminimumwageordinance coupledwitha reboundingeconomyandaccompanyingbusinessgrowth.
FigureF:ChangeinFull-TimeEmployees
By industry, food services saw themost consistent increase in full-time employment.The construction industry saw a split between “no change” and a “decrease” in thenumberoffull-timeemployees.Manufacturingremainedstable.
Table6:ChangeinFull-TimeEmployment:
IndustrieswiththeHighestNumberofResponses
NoChange
Increase Decrease Total
Construction 4 0 3 7FoodServices 12 10 1 23RetailTrade 4 2 5 11
Manufacturing 7 2 0 9
53.5%21.2%
25.3% NoChange
Incease
Decrease
12
PayrollCostsHaveIncreased
Over half of businesses have seen an increase in payroll costs, whether due to theincreaseinminimumwageorraisestokeepupwiththeBayAreacostofliving.Nearlyaquartersawanincreaseof10%ormore.SeethedetailedbreakdownofpayrollchangesinFigureGandtheoverallpercentagebreakdowninFigureH.FigureG:ChangeinPayrollCounts FigureH:PayrollCostChanges
FoodServicesisseeingaparticularlysharpriseinpayrollcosts.20outof28(71.4%)offood servicebusinesses indicatedanoverall increaseand10outof 28 (35.7%) reportincreasesofmorethan10%inpayrollcosts. Thisindustryalsoshowsacorrespondingincreaseinboththenumberoffull-timeemployeesaswellanoverallincreaseinpayrollcosts.Table7showshighlightsfromotherindustrieswithlargerepresentation.
Table7:PayrollChangesinIndustrieswiththeHighestNumberofResponses
Industry Decrease NoChange Increase TotalConstruction 0 1 8 9FoodServices 6 2 20 28HealthandSocialServices 0 3 7 10Manufacturing 3 7 3 13RetailTrade 1 7 8 16Architecture 0 0 5 5
16.4%
23.4%60.2%
Decrease
NoChange
Increase
11
37
30
14
2016
27
Down7-10%
Down4-6%
Down1-3%
NoChangeatall
Up1-3%
Up4-6%
Up7-10%
Upmorethan10%
13
HigherWagesistheMainCauseofPayrollIncreasesThe majority of responding businessesattributed their increase in payroll tohigher wages. 82% of 89 businesseschecked higherwages, 31.5% said theyhired more employees and 16.9% said
they increased the number ofworker’shours. The Venn diagram in Figure Iillustrates the frequency and extent ofoverlapbetweenresponsecategories.
FigureI:ReasonsforPayrollCostIncrease
Respondents were also able toprovide additional, open-endedresponses(availableinAPPENDIXBat the end of this document).Taxes, insurance, andcompensation packages were alsomentioned as other sources ofpayrollcostincrease.
For the few businesses that saw adecreaseinpayrollcosts,areductioninemployees and work hours were themain reasons for the decline. Of the17.4%of businesseswith a decrease inpayrollcosts,64%attributethecausetofewer employees. 41% attribute thecause to fewer work hours, and tworespondents give the reason of lowerwages. The Venn diagram in Figure Jshowsthefrequencyandthedegreeofoverlap between the three responsecategories. Diagrams are not to scalewitheachother.
FigureJ:PayrollCostIncreases
14
6%
42%52%
Lowered
StayedtheSame
Raised
PricesarenotRisingattheSameRateasOverallCostsandPayrollCostsSlightly more than half of respondentsreportedincreasingtheirpricesoverthelastyear.Lessthanhalfkeptpricesthesame. 37% of business raised pricesabove 4%, outpacing the overall priceindex increase of the San FranciscoArea. For comparison purposes, theprice index increase for the SanFrancisco areawas 3.1% for theperiodfromAugust2015toAugust20164.Whenchangesinpriceswerecomparedwithchangesinrevenues,only31.7%ofbusinesses (39/123),hadcorrespondingincreases in prices and revenues (seeAppendixC). FiguresKandLprovideadetailed breakdown of price increasesamongthesurveyedfirms.FigureK:PriceChanges
4“ConsumerPriceIndex,SanFranciscoArea—August2016”.RetrievedOctober18,2016fromhttp://www.bls.gov/regions/west/news-release/consumerpriceindex_sanfrancisco.htm
FIGUREL:PriceChangeCounts
Food services show the mostconcentrated increase in prices byindustry. Construction,Manufacturing,and Retail are mainly split betweenstablepricingandpriceincreases.
Table8:IndustryPriceChangeHighlights
Industry Lowered Same Raised Total
Construction 0 4 5 9FoodServices 2 4 22 28HealthandSocialServices 0 8 1 9
Manufacturing 1 7 6 14RetailTrade 3 6 9 18
3 1 3
53
2920
125
Down7-10%
Down4-6%
Down1-3%
NoChangeatall
Up1-3%
Up4-6%
Up7-10%
Upmorethan10%
15
2%
16%
82%
FigureN:PlanstoMove
Yes,withinEmeryville
Yes,outsideofEmeryville
None
IncreasedPricesaretheMostAnticipatedChangeBusinessesExpecttoMakeSlightly less than half of businessessurveyedareexpectingtomakechangesin the near future. Of the 67 thatreported anticipating changes, 27expect to raise prices. Other popularchangesareoutlinedinTable9.
MostBusinessDoNotAnticipateMoving
To get a readingon the stability of theEmeryville business environment, weasked whether businesses wereplanning on changing locations withinthe city or had plans to move to adifferent location outside of theEmeryville. 81.6% of businesses haveno plans tomove to a new location atall.
Table9:AnticipatedChanges
ChangeType Count
PriceIncrease 27Increasinghours 16WageIncrease 15ReducingHours 5Reducingtraining/entrylevelpositions
4
AnticipatedChangesandFutureChallenges
48.2%
51.8%
FigureM:ExpectedFutureChangesinEmployment,Wages,orPrices
Yes No
16
Finding Skilled Employees, Rents, and Personal Costs of Living are the TopChallengesBusinessesCurrentlyFace
According to survey respondents, the areas of major concern are finding employeeswith the skills and experience needed, rising property values and rents, and personalcostofliving.Itappearsthatpermits,zoning,cityinfrastructure,crimeandblight,andaccesstocreditarenotseenaschallengesatthistime.FigureO:ThePerceivedImportanceofVariousChallenges
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
LackofadequatecityinfrastructurePermitsandzoning
CrimeandblightAccessingregionalorinternationalmarkets
AccessingcreditTaxesandregulationsAccessingCustomers
AbilitytoinvestofmakechangestobusinessPersonalcostofliving
RisingpropertyvaluesandrentsFindingemployeeswiththeskillsandexperienceneeded
Challengesorderedbymostcritical
Notachallenge Minorchallenge Majorchallenge,butmanaging CriticalChallenge
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
PersonalcostoflivingFindingemployeeswiththeskillsandexperienceneeded
RisingpropertyvaluesandrentsTaxesandregulations
AbilitytoinvestofmakechangestobusinessAccessingCustomers
CrimeandblightPermitsandzoning
LackofadequatecityinfrastructureAccessingcredit
Accessingregionalorinternationalmarkets
Challengesorderedbyleastcritical
Notachallenge Minorchallenge Majorchallenge,butmanaging CriticalChallenge
17
In July, 2015, the City of Emeryvilleintroducedaminimumwageordinancethat increased the minimum wage to$12.25perhour forbusinesseswith55or fewer employees and $14.41 perhour for businesseswithmore than 55employees. The previous minimumwage was $9 an hour, representing a36%jumpforanyminimumwagebasedsmall businesses, and a 60% bump forlargebusinesses.
Minimum wage increases have beenenacted around the Bay Area as awaytohelpwageskeeppacewiththerisingcosts of living. The City of EmeryvilleEconomic Development Departmentwantedtonotonlyassesstheeconomicstate of local businesses, but thereaction and feeling towards the citywith the newminimumwage and paidsickleaveordinances.
ReactionstotheMinimumWageOrdinanceareMostlyNeutral
To capture the full range of possibleresponses, the survey askedrespondents to give qualitativereactions to the minimum wageincrease.Responseswerefirstgroupedinto general categories of neutral,positive,andnegative.Tworesearchersindependently cataloged responses,then tested inter-rater reliabilitystatistic tomake sure that therewas aconsistent interpretation ofrespondent’s answers. The initial runindicated a very high Cohen Kappastatistic (over .90) indicating that wehad a high degree of agreement
between coders. Minor discrepancieswerethenresolved.
FindingsRegardingMinimumWageandPaidSickLeaveOrdinances
“Someonehastolead.Theincreasesarenecessary”
“Iwasn’tsurprisedbutfeelitonlyscrewssmallbusinesses.”
“Ourwagesexceedminimumwage.”
“It’salwayshardonabusinessforminimumwagetoincrease.
However,wedounderstandtherisingcostsintheBayArea.”
18
17.5%
34.4%26.3%
21.9%
FIGUREO:ResponsetoMinimumWageIncrease
blank
neutral
positive
negative
The largest group of respondentsexpressed neutral opinions about theminimum wage. If we assume that alack of response also indicatesneutrality, then roughly half ofbusinesses surveyed are not veryaffectedbythenewordinance.Positiveresponses slightly outweighed negativeresponses.
Six general trends further typifybusinessresponse.Iftheywereneutral,businesseswere either not affected bythe minimum wage or could seeconflictingbenefitsandnegativestothenewordinance.Positive responses were typified bythosewhoweregenerallysupportiveoftheordinance,andthosewhoexpressedideological support but also
acknowledged that they were notpersonallyaffectedbytheincrease.Negative responses includedrespondents who expressed an overallconcernabouttheordinance,andthosewho were personally negativelyimpacted.
FIGUREP:NuancedResponsetoMinimumWageIncrease
30.3%
10.6%
26.5%
5.3%
15.2%
12.1%neutral,notaffected
neutral,acknowledgebothsidesoftheissue
positiveresponse,thinkitisgoodorfair
positivereponse,butnotpersonallyaffected
negativeresponse,personallyaffected
negativeresponse,expressedoverallconcern
19
While the minimum wage has been acontentious issue for some businesses,notonly are themajorityofbusinesseseitherneutralorsupportive,mosthavenotmadeanychangestotheirbusinessin response to the ordinance. Twothirds of businesses report making nochanges in response to the ordinance,while only one third of the businesseshavebeendirectlyaffected.The industry that appears mostimpacted is the food service industry.64%offoodservicerespondentshaveanegativeopinionoftheordinance,with32% feeling personally affected.Anecdotally, researches were told that
theminimumwageskewedthefairnessofpaybetweenfrontofhouseandbackof house workers and tip systems. Itappears from thesestories that no realsuccessful adjustmenthas been implementedsofar.The other majorindustries report mainlyneutral or positiveresponses.Manufacturingwas 50%positive and 29% neutral. Retail was50% neutral and 35% positive.
“Nothappysincemanyofour
minimumwageemployeesare15.5-18years’oldwhorequire
alotofmanagement.”
20
ReactionstothePaidSickLeaveOrdinancearealsoMainlyNeutralResponses to the paid sick leaveordinance follow a similar order andbreakoutasthattotheminimumwage.Most businesses are neutral in theirresponse,with a slightly larger positiveopiniontonegative.Industry reactions also follow a similarpattern. 44% of Food Service had anegativeopinionoftheordinance,with30%feelingpersonallyaffected.66%ofManufacturing was neutral. 50% ofRetail had a positive opinion on theordinance.
40.9%
5.5%
26.8%
2.4%
15.0%
9.4%
FigureR:MoreNuancedReactiontoPaidSickLeaveOrdinance
neutral,notaffected
neutral,acknowledgebothsidesoftheissue
positiveresponse,thinkitisgoodorfair
positiveresponse,butnotpersonallyaffected
negativeresponse,personallyaffected
negativeresponse,expressedoverallconcern
21%
37%
23%
19%
FigureQ:ReactiontoPaidSickLeave
blank
neutral
positive
negative
“Wehadpersonaldayspriortotheordinanceandsincealteredthistimeto
paidsickleavewhichislessaccommodating”(mustbe
usedforsickleave)
“Sickleaveisareasonabledemand.”
21
IdeasforSupportfromtheCityThe City of Emeryville Economic Development department expressed interest in developingservicesforbusinesses.Togetasenseofwhattypesofserviceswouldbemostdesirable,weaskedbusinessestochoosewhatpre-identifiedserviceswouldbeofusetothemandalsogaveroomforadditionalcomments.Themajority(70.9%)expressedinterestinmarketingfortheirservicesandproducts,37.2%expressedinterestinaChamberofCommerce,33.7%wouldlikeassistancemakingtradeconnections,and23.2%wouldliketrainingonhowtoimplementnewordinances.FIGURESpresentsthesummaryoftheseresponses.
FigureS:VennDiagramofMajorTypesofSupportCurrentlyNeeded
Write-in responses included a wide range of suggestions that could not be organized intocommonthemes. Commentsrangedfromsuggestionssuchas“Affordablehousingforyoungprofessionals,anEmery-go-roundwithexpressservice,”and“JobFairs-connectingpeoplewhoneedwork”to“PublicTransportationistoughfromBART,”and“Revertingtostatelawinareasof employment and labor law.” Full comments (excluding NA responses) are available inAppendixE.
ChamberofCommerce,37.2%
MarketingforServicesandProducts,70.9%
TradeConnections,33.7%
Training,23.2%
22
APPENDIXA:Cross-tabulationofforFirmSizeCategoryChange.
Count Howmanyworkersdoyoucurrentlyemployatyour
Emeryvillelocations?
Total
0-10 11-20 21-55 56-100 101-300
Howmanyworkers
didyouemployone
yearago?(July,2015)
0-10 74 8 1 0 0 83
11-20 8 14 3 0 0 25
21-55 2 2 14 3 0 21
56-100 0 0 1 2 0 3
101-300 0 0 0 0 4 4
Total 84 24 19 5 4 136
APPENDIXB:“OTHER”ReasonsforPayrollIncrease(ListedinAlphabeticalOrder)
60%increase
Gaveacompanypayraiseacrosstheboardtoo.
HealthCareCosts
IncreasedCommissions
Moreprogramming
TaxesThemin.wagedidnotaffectusasallouremployeesmakemorethanminimum.
Wechangedourcompensationpackagetostaycompetitive.
Wehaveanincreasebutonlyslightlyaswehavehadtoreducestaffinordertoaffordtopaycompetitively.Everyonehastopitchinanddootherduties
23
APPENDIXC:Cross–tabulationofRevenueandPriceChanges
Count Changeinprices Total
Lowered Stayedthe
Same
Raised
Comparedtoayearago
haveyourrevenues
Increased 2 19 39 60
Decreased 3 12 11 26
Stayedthesame 1 22 14 37
Total 6 53 64 123
APPENDIXD:ReasonsforPriceChanges(ListedinAlphabeticalOrder)
Allofourexpenseshaveincreased,soweraisedpricestobeabletocontinuetobeabletocoverourcosts.Butweareprettylimitedtoraisingpricestoohighbecausepeoplewon'tpayasmuchforcoffeeastheywillforfood.WeworrythatwhentheMWreaches$16-17/hrinafewyears,wewon'tbeabletoaffordtohaveasmanyemployeesasweneedto,withoutgoingtipless,whichwe'rereallyafraidtodo,becauseourcustomersarereallyvariedinhowmuchtheytip.Ifpeopleareforcedtotip,andtipatacertainpercentage,someofthosecustomerswillnotcomeinandsalescoulddecreaseagainandwewouldbebacktosquareone,cuttinghours,cuttingjobs,workingthoseshiftsourselves.Currently,bothmybizpartnerandIworkeverysingleshift,6daysaweek,sincewehadtofireourlastemployeeoverayearago.Wehavenotbeenabletoaffordtohireanyoneagain,permanently,becauseofthedecreaseinsalesandincreaseinourexpensesoverthelastyear.ThisMWOisahugeproblem,thatbreaksthebackofsmallbusinessinEmeryville.Wearenottheonlyoneswhoarestruggling.Everyoneisstruggling.
becausewedonotwanttoloseanymorecustomers
Butconcertticketpriceshaveincreased10-20%
competitivenatureofthebusiness
Contractpricingishighercurrentlytoreflectincreasedexpenses.
costofcottonisincreasingAUR
Demandisup.MarketRateischanging
Duetoproductioncostsinourfactorywehadtoincreasethecostofglass(ourprimaryproduct)by12%.Duetotheincreaseinthecostofsomematerials,mainlyleather,someofourstyleswentup$5-$10
Followingsalepriceformulasprovidedbyfranchise
Hadtoraiseourpricestooffsetwageincreases.
HIGHERCOSTOFGOODS.
Highermaterialcosts
Inthecurrenteconomicconditions,itisdifficultformetoraisemyprices.
Increasedpricesoncertainticketitemsbutnotallacrosstheboard.
inflation
insurancecosts
justtheclassicVanswentup$5
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Manypriceincreaseinyearspriorto7/15
materialcosts,insurance,etc.haveincreased
N/A.Weareanon-profit.
Nochoice
notrelevanttous
Ourhourlyrateshaveincreasedasindicated.Ourfeesaretypicallytiedtoa%ofconstructioncost,thereforetotheextentthatconstructioncostsrise,ourfeestypicallyrise,butit'sdifficulttotrack..
OurWholesalePricesincreaseannually.
PriceofinsuranceremainsthesameforallTransamericacompaniesasdeterminesbythehomeoffice.smallpriceincreasestokeepupwithrisingcostofproduction
thecostofinquiringtheproductcanbeseasonal
Thisdoesn'treallyapplytous,asourB2Bpricesarenotaffectedbylocalconditions
tocompetewiththeinternet
tocoveremployeeraises
WeareaCanadianCompany,soweincreasedpricestosomehowovercometheweakCanadianDollar.
Weareawholesalercompetinginternationally-ifwagesincreaseinEmeryvillewecan'tpassthatonasitdoesn'taffectourcompetitorsandtheirpricing.Wehavenosales.Weareastartup.
Wehaveprogressivelyraisedpricesleadinguptheminimumwagehikeandinthemonthssincethechange.$1-$3perdrinkingeneral.Wehaven'tchangedourpricesperse,butwehavehadtoofferdiscountsalmosteveryweekjusttogetpeopletobuysomething.Wesellinanationalandinternationalmarketandsocannotraiseourpricestoadjusttoalocalissue.Ourpricesarefixedbythemarketnotbychoice.Yes,lastyearsincreasedcosts
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APPENDIXE:Write-inResponsesforHelpfromtheCity(ListedinAlphabeticalOrder)
AddressingthepermitprocessandreducingtheneedtopresenttoCityCouncilforeveryminorchangeinaproject.Moreflexibilityinaddressingindividualsituations.
Affordablehousingforyoungprofessionals.AnEmery-go-roundwithexpressservice.
Anymarketingwouldbegreat.PoliceintheMarinaarestillneeded-footpatrols.Carsandboatsgetbrokeninto.Asabusinessownerfor11yearsinEmeryvillethereislittletonorecognitionandorsupportoflocalsmallbusinessinthearea.AnymarketingandPRistotallyonourownshoulders.Thereisnocommunityforbusinessestoreceiveadequateandtimelyinformationonanythingrelatedtoourbusinessendeavors.WedesperatelyneedaChamberofCommerceorothercitysupportedbusinessorganization.Theartsaresupportedbutbusinesswhichbringsinrevenueforthecityisnot.
Atresgrantsforfulltimeartist/teacherswhoactuallyworkandliveinEmeryville
BARTstop
buildsomeparkinginfrastructure
businessloan
CommunityBulletinBoard,IhavetriedcontactingtheCityofEmeryvilleandithasbeenastruggletogetsomeoneonthephone.Considerimpactonexistingbusinesseswhenapprovingconstructionandorrezoning.
crimecontrol
Disabilityaccessinourbuilding.TheownersjustputinautomaticfrontdooropeningbutonlyafterapushandnowIwouldlikeautomaticdooropenersfortherestroomsonourfloor.
EPDsupport
Forsuchasmallcity,itseemshavingabusinessdirectorywouldbeusefulforsmallbusinessessuchasours.Wecouldveryhappilyandeasilysupportlocalbusinesseswithourservices.
Forthecitytotakethetimetostudytheimpactthatordinancechangeswillhaveonsmallbusinesses,aswellaslargercorporations.Therelationshipisco-dependent.LargecorporationsbringinshopperstoEmeryville.Withoutthem,smallbusinessesseeonlylocals.Changesaremadelessthan6monthsafterproposals,whichreallyisn´tenoughtimetoconsiderthepositive,andpotentiallynegative,impactsthatthesechangesmayincur.
Fundraisers,otherwaystogetthewordout(marketing)
Getacouncilthatcaresforthecitynottheirownpoliticalagenda
HavingcouncilhearwhatEmeryvillesmallbusinesseshavetosay.
ImprovedHomelessmanagement
ItwouldbebestifthecitygovernmentwouldgetoutfrommakingdecisionsaboutbusinessesinEmeryville.Ifthegovernmentstartsrunningbusinesses,thecountryisgoingbankrupt!!!
JobFairs-connectingpeoplewhoneedwork
lessregulation
marketingEmeryvilleasabrandlocation
Networkingwithneighborsorsimilarorganizationswithinthecity
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Notenoughstreetparkingforourcustomers,anissueofdensityandgrowth.Also,wouldlovetrainingsubsidies.nothingIcanthinkofrightnow
PublicTransportationistoughfromBART.
Revertingtostatelawinareasofemploymentandlaborlaw
shouldntacceptajobfromhimbeacuaseofblightinneighborhoodcreatejobsprogram,hehasahardtimefindinghighqualityemployeesinhistrade.concernedthatoneguydid
sickpaylawunclear,veryveryunclearandunworkable
smallbusinessloansupport
strongyeschamber.Thecitystaffhaveallbeensogreat,realistic,serviceorientated,andveryapproachable.Tethering/deferringthecity'sMWOtothestate'ssowehaveanevenplayingfieldwithourneighboringcities.Notpassingtheschedulingordinance.FreezeMWtomatchneighboringcitiestopreventcompetitivedisadvantage.
Theydoagoodjob.Noissues.
TrainingandStreetcleaningbetterintheafternoons.BusinesslicensetaxincreasedwhichimpactedmyfeelingofEmeryvillenotasbusinessfriendlyWecouldusesupportfromtheCityintheformofthecitycouncilleavingministerialworktothestaffsothattheyaren'tafraidtodotheirjobsandgetthingsdone.Inthepastseveralyears,thestaffhaslostitsinitiativeandconfidenceasthecitycouncilhasincreasinglyencroachedonminorpermittinganddesignissuesthatoutsideoftheirexpertiseanddon'taffectcity-widepolicy.It'sagreatcity,butthecouncilisnotstrategic,noteffectiveandfocusedonverysmallthingsandverysymbolicissues.Wouldbegreattohavethemfocusedontransportationinfrastructure,linkagestoBART,parking,parksandattractingnon-profitswithfundingtobuildaffordablehousing.Inmyopinion,theMWOwassymbolic.MostjobsinEmeryvilleareprofessionaljobsthataresalaried.theMWOraisesthecostofhiringlocallyandthusmakesiteasiertoautomateoroutsource.Theunintendedconsequencesprobablyequalthemarginalbenefitoftheordinance.
WedonotfeelweneedsupportfromtheCityonanyoftheabovelisteditems.
WehaveactivelyengagedwiththeCityofEmeryvilleandwillcontinuetolookforopportunities.EstablishinganewChamberofCommercewouldbehealthyforourcommunity.
WewereactivemembersofEmeryvillechamber
weworkwithapartmentsandmultifamilyhousing,butonlyworkwith2buildingsinEmeryville.itwouldbecooltoworkwithmorecomplexes.
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APPENDIXF:CompleteSetofQualitativeResponsestoMinimumWageReactionQuestion(ListedinAlphabeticalOrder)
abouttime
Agree
Allforanincrease,BUTtheincreasewastoomuchtoofast.Wehirehighschoolandcollegestudentswithnopriorworkexperience-thesepeopletakethejobforthelearningexperience-notb/cthepayfinancialsupportsthemortheirfamily.WiththehigherminwagethenatureoftheexperiencewecanofferthemreallyChangestoonewithfarlesstrainingforthem.
Alreadymade$15hraminimum
angry
Atfirstwewerewarnedaboutourheadofficethoughtbutnothinghaschanged
Automate.
Awesome!
badidea
Concern
Confirmedcompliance,alreadymet
Didnotlike
Disappointment,itwastoofastandfuriouslyimplemented,thusdrivingawayinnovationandpotentiallynewsmallbusiness.ItisnotinlinewithstateornearbycityregulationssowhywouldbusinessstayinEmeryvillewhenotherareasareeasiertoworkin?
Doesn'taffectus,thesalarieswepayarealreadymuchhigherthanminimumwage
DoyleStreetCafepaidmorethanminimumwagebeforethelawcameoutbutitisuncertainhowtomanage$14/hrExcellent!
excited
Excited
Existentialterror.Fury,thatisnotknownbeforewechoosetolocateinEmeryville.Notbecauseoftheinitialbump,whichwesupportedtoOaklandlevels,buttheprospectofoutpacingneighborswithnoofframpincaseofeconomicslowdownornegativeimpact.
Fine
Frustration.Notipcreditmeansthatmybartenders,whowerealreadymakingupwardsof$54/hourcountingtips,werebeinggivena$3/hourraise.Wedomoresalesthanwedid3yearsagoandImakelessmoney.MybartenderswerealreadymakingafantasticlivingwithbenefitsnowmakenearlyasmuchasIdo.
gladforworkers
Gladithappenedsopeoplecanaffordtoliveherebutconcernedforsmallbusinesses
Gladtohearit.Ourlowestpaidemployeemakesmorethan2XEmeryvillemin.wage.
Good
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GoodfortheemployeeBadforthesmallbusinessownerslikemewhosuffereverymonthtopayrentGoodidea.ImpossibletoliveonBayAreaonminimumwage.Alloutemployeesaresalaried.
Good!Peopleneedtobeabletomakealivingwage
Good.Peopleneedahirestartingpointinourarea.
Great
great!
Great!
Great.The1%willpay.OrasshowninaSimpsonepisode,""letthemhavetheirtartarsauce.
happy
happyemployeesneedit.
Happy/Concerned.
havetoincreasethebusinesstomakeupthedifference
IdidunderstandhowthatcouldbegoodforEmeryville.WiththeincreaseIhavehadmoreapplicationsfromsurroundingareasandhavenothiredanewemployeefromEmeryville.
Idon'thaveanyemployeessonone
ImovedherebecauseEmeryvillehadloweroperatingcosts.Theincreasesmakeitharderasasmallbusiness.Idosupportlivingwagesandwouldhavedonethisformyemployeesonmyown.Alsothinkminimumwageisacircularlogicasitdrivesallpricesup.
Ipersonallysupporttheminimumwageincrease,howeveritdoesnotaffectourbusiness.
Isupportahigherminimumwage.
Ithinkitisfineandagoodwagetopaypeople.Personallyagreewiththeparameters.
Iwasfinewithit.Allofmyemployeesmakemorethantheproposedminimumwage,soitdidn'taffectmybusinessmuch.Ibelieveinpayingalivingwage.Iwasscaredthattheywereraisingittoohigh,toofast.
Iwasstressed.Wemakesuchalowprofitmargininthesalonandspaindustry.Thiscutsinmoredeeplyintoourprofitability,Itrulyhavenoproblemasanownerinwantingtopayingforabetterwayoflifeformyemployees,however,duetothehighrentalcostsassociatedwithoccupyingoursalon,thecostofdoingbusinesssimplyneedstobeloweredinordertokeepupwiththelaborcostchanges.Theminimumwageincreasereallywouldn'tbeanissueifIcouldhavebettersavingsinrentcosts.Iwouldpassthosesavingsontomyemployeesinhigherwages.Allmyemployeescitethebiggestdrainontheirpersonalbankaccountsisthecostofhousing.ThecostofhousinginCalifornianeedsbettermanagement,soasnottogougeresidents'pocketbooks.
Iwassurprisedandshockedthattheywentthroughwiththeordinancewithouttakingpropertimetoresearchtheeffects,todialoguewithlocalbusinessesandperhapsattheleastimplementalessaggressiveriseinsuchashortamountoftime.
Iwasupsetthatthewageincreaseaffectedonlyhourlyemployees.Ididnotseeapayincrease,asIamsalariedandalreadyabovetheminimumwage.Currently,employeesundermemakejustaboutasmuchasIdo.
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Iwasn'tsurprisedbutfeelthatitonlyscrewssmallbusinesses.Feelconcernedaboutsmallbusinesses.Iwillneverbeabletohireandtrainanentirelyuntrainedworker.InthepastIhavehiredmanyuntrainedyoungpeople,evensomejustoutofjuveniledetention,andhelpedthemlearnhowtoworkatajob,butIwon'tbeabletodothatinthefuture.Itwasagambleat$10/hr.
I'vealwayspaidmore
Ifwecouldfindanemployeewiththeskillsweneed,wewouldpaywellabovetheminimumwage.I’m[EXPLETIVEREDACTED].Nothappy
indifferent
Itdoesnotaffectouroffice,ouremployeesareoncommissiononly.
Itisfair,butwearenotmakingenoughtosupportmoreemployeesatthistime.
ItisstilltoolowtoliveintheEastBayareawithoutroommates,spouseorrent-controlledapartment.Itreducedtheamountofstaffwecouldbudgetfor.
itwasfair
Itwastimetoraisetheminimumwage,butdoitonaregionallevel,notjustonecommunitythatwillputbusinessesatadisadvantage.It'salwayshardonabusinessforminimumwagetoincrease.However,wedounderstandtherisingcostsinthebayareasoweunderstandbothsidesoftheargument.
It'sgoodforlow-wageworkers.Itdoesnotaffectourbusiness.
madesureemployeesweremakingatleastthattostart
MoreBS
Moreunnecessaryregulationthatcreatesmoreworkandlessabilitytomanagethebusinessforprofit.However,thestoryhasanotherside,andIbelieveitmaybegoodforEmeryvilleintermsofattractingbusinessesthatareabletogrowmorestrongly.SoIamnotunhappyatthistime.
MybusinessopenedafterJuly2015sotheMWOwasalreadyinplace.
n/a
N/A
NA
Negative.
Neutraltonone(didn'treallyaffectus)
noissue
noproblem
Noreaction
Noreaction,noneofouremployeesisatminimumwage.
none
None
none.alreadypayeveryonemore
none.wealreadypaymorethanminwage
Normalworkersnotimpacted.Ourstudentworkers,bigimpact.Increasedpaywithcostsontheclinicwemaylosemoneyattheclinic.
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Notaproblem,wedonothireminimumwageworkers
Notaffected
notgood
notgoodforboss
Nothappysincemanyofourminimumwageemployeesare15.5-18yearsoldwhorequirealotofmanagement.Notmuch.Won'taffectouremployees.
Notworried
ohmygod...weneedtoraisethefoodprice,whichcustomersdon'tlike..
OK
open
Ourclientshavedroppedparticipation-couldn’taffordadvertising
Ourwagesexceedminimumwage
positive
Positive
Positive,butitdoesn'taffectusbecauseallemployeesarepaidwaybeyondminimumwage
positive.
Positive.CostoflivingintheBayAreashouldbematchedwithdecent,morale-preservingwages.
relievedbythefactwerunourbusinesswithasmallstaff.Moreimportantnowthatparttimeemployeesareproductive.Self-employed,notplanningonhiring
shocked,theownerdidnotwanttopaymoretotheemployees
shocking
shockingsinceitwassohigh,butgoodforemployees
Sodissatisfiedwithcity
Someonehastolead.Theincreasesarenecessary.Good
soundsgood
Supportive
Surprise,buthappythechangehascome
Surprised.Therewaspoorcommunicationandlittlenotice.
Thatthisisasymbolicmeasurethatwillnotaffectmanypeople.Sincethecitydidnoresearchonthenumberorlow-wagejobsortheindustriesaffected,theirattemptwasspeculativeandpoliticalratherthansubstantive.Further,businessesdon'thavetoleaveforjobstoleave.Manyjobscansimplybeoutsourcedtocontractingfirmsbasedinothercities.AnyworkdoneonacomputercanbedoneinIdaho.Foracitythissizetoraiseitsminimumwagewasshort-sighted,andnotlikelytopositivelyaffectmanypeople.
Theminwagewasinlinewithourneighboringcities,however,thepaidsickleaveisgoingtobeabusebyemployees(someofthem).Theminimumwagehadnoeffectaswewerealreadypayinghourlywagesovertheminimumwage.
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Thereisnostudy,thedecisionwasalreadybasedon5councilmemberknowledgewhohasnoexperienceinsmallbusiness(noneofthemarebusinessowner).ItisprettyobviousthatEmeryvilledoesn'tencourageonetoonethebusinesssincetheriskandinvestmentismuchhigher.
Theycouldhavephaseditin,a30%increaseisnojoke.
Thisareaisexpensivetolivein,makessensetoincreaseit.
thoughtitwasagoodthing.Ialreadypaidoverthatsoitdidn'treallyaffectme.
toofasttoomuchincrease
Veryhappy
verypositive
Wefeltlikewehadtogiveeveryonearaisesotheywouldstay.
Wehavetopayouremployeesbutthepayrollexpensesarebecomingtoohigh.
WejustmovedtoEmeryvilleandallofouremployeesareabove$20/hrsoitdidn'taffectus.
WeknewbeforeourstoresopenedthatEmeryvilleemployeeswillhaveoneofthehighestminimumwagesinourcompany,wejustfollowedregulationsandhopedthattherewouldbelessturnoverbecausewewereofferingalivingwagethatwashighenough.
Welaidoffabout20%ofouremployees.
WESUPPORTTHIS.
Wewerenotconcernedasourcompanyhasaunioncontractplusemployeeshavebeenherelongenoughthattheyareabovetheminimum.WorriedthatunlessweraisedourpricestoothatIwouldmakelessmoney.