When the City Council in tiny Emeryville, CA (pop. 11,758) set its sites on the country’s highest minimum wage, it justified the proposal using research from the Institute for Research on Labor and Employment at UC Berkeley. Then-Councilmember Jac Asher scoffed at small business concerns; she suggested it was “misinformation” and pointing to Berkeley’s report claiming minimal price increases were necessary to offset dramatic wage hikes.
Four years later, it’s clear that Emeryville’s City Council were the ones receiving and distributing misinformation. A new city-commissioned study from the Lokey School of Business at Mills College describes a city whose small businesses are on the brink: Minimum wage levels are rising far faster than they can raise prices, and they’ve been forced to slash staffing levels or close down in the fact of the city’s unrealistic wage mandates.
The Emeryville Eye, a local newspaper, has kept track of the city’s small business closures and described the damage this way:
It’s getting harder to find small food service businesses that were around in 2015 when the [minimum wage ordinance] was passed. Emeryville institution Bucci’s, Commonwealth, Farley’s, Scarlet City … all gone. In fact, nearly all the brick & mortar businesses that comprised the short-lived Little City Emeryville small business advocacy group have moved, folded or sold. Only The Broken Rack and Paula Skene Designs (a greeting card and stationary company) remain in Emeryville.
These small businesses actively lobbied for a local study factoring in our city’s unique geography, business models and circumstances prior to the ordinance’s passing, but were denied.
The real-world impacts of the wage ordinance have been so severe–and so out-of-step with the rose-colored conclusions offered by Berkeley–that the Council is now advancing a “pause” in the city’s wage ordinance. It’s the least the Council can do, but it’s too little, too late for the dozens of small businesses that have scaled back or closed because of the Council’s misguided wage hike.