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10/21/2016

EmeryvilleBusiness

ConditionsSurvey:ImpactofMinimumWageandPaidSickLeaveOrdinances

LeahMowery,ShantiJensen,StephanieShafer,MPP/MBAStudentsKateKarniouchina,AssociateProfessorofBusinessLorryL.LokeySchoolofBusinessandPublicPolicy,MillsCollege

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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.

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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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%

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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

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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

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AnticipatedChangesandFutureChallenges

48.2%

51.8%

FigureM:ExpectedFutureChangesinEmployment,Wages,orPrices

Yes No

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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

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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.”

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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

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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.”

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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.”

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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%

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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

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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

24

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

28

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.

30

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.

31

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.