Times Standard My Word

From No on R (Don Smullin, Eureka Chamber of Commerce)/Sept. 15, 2014, 3:50 p.m.

The Eureka Chamber of Commerce is quite concerned about Measure R, the proposed Minimum Wage Ordinance and its effect on jobs in the City of Eureka. 

Governor Brown just raised the minimum wage last month and will raise it again in 2016, but he raised it for the entire state.

We firmly oppose the ballot measure for these main reasons:

1.       It is for Eureka only.

The City of Eureka already suffers from a fragile economy. Many storefronts are empty and many business are struggling to stay open. This ordinance puts Eureka at a competitive disadvantage. To offset the cost of this ordinance, Eureka businesses will have to raise prices or reduce jobs while their competitors in Myrtletown, Cutten, Arcata, Fortuna etc. won’t have to. A company looking at moving to Eureka could serve Eureka customers simply by locating outside the city limits. We need jobs in Eureka to keep Eureka viable.

Measure R would create an uneven playing field between the various communities of Humboldt County.  There is no question that Measure R will result in the outward migration of employment opportunities within the City of Eureka boundaries, negatively impacting the cost and availability of services for the community.  Additionally, there will be a negative impact on businesses, non-profits and government agencies which will be required to track the time an employee works in or travels through Eureka and pay them using a different pay scale during that time.  These requirements will impact both non-exempt (hourly workers) and many exempt (salaried) employees.

2. And as actually written, it does not reflect the proponents’ statements.

Proponents cite San Jose’s minimum wage increase as a success story, but they have selectively pulled a job growth statistic unrelated to the minimum wage increase. The truth, according to the Employment Policies Institute, is that service businesses were hit very hard. One year after the adoption, their survey found that 66.3% of businesses raised their prices, 44.8% reduced employee hours, 42.3% reduced staffing levels, and 7.4% closed their locations in San Jose.


Eureka, at 27,000, is not San Jose, San Francisco, or Seattle.


Proponents say that this is only for Eureka employers but the ordinance applies to all employers, whether located inside or outside the city limits that assign an employee to work within the City limits.


The proponents say that only big businesses with more than 25 employees will be effected but the ordinance defines an employee as anyone working a minimum of 2 hours a week for at least one week in a year’s time. This truly affects seasonal and temporary employment.


Proponents say that non-profits are exempted for 1 ½ years but the ordinance actually limits this to only 501C3 nonprofits. There are many other kinds of non-profits. This will affect the city and county. Where will they get the money?


Proponents say this ordinance sets the minimum wage for hourly work not realizing that this also sets the minimum salary at 2 times the minimum hourly, or about $50,000 a year.


Unknown is the cost to the City to enforce this ordinance but the ordinance gives the City the right to recoup all costs without limit by charging all employers, whether the employer is at fault or not. Any person whether an employee or not, whether a resident of Eureka or not, can file a complaint and the city has to adjudicate that complaint within 1 year. This will be expensive.


Every subject employer must post legal notice of Eureka’s minimum wage but a subject employer can be anyone anywhere. How will an employer out of Eureka keep up with Eureka’s regulations?


The minimum wage will automatically increase every year in accordance with the US Urban Wage Earners Determination, but surely the cost of living in Eureka is less than that of New York’s.


And finally, an argument put forth by the proponents is that this increase will help the economy of Eureka by giving employees more money to spend thus saving existing businesses and attracting more companies. According to a recent Wall Street Journal article by a Fellow at the New York University School of Law, only 2% of hourly workers are paid minimum wage. In a city of only 27,191 residents, surely this is not enough to save the Eureka economy.  Eureka is not San Jose.


According to this same article, there is no data to change “this fundamental economic precept: When you raise the cost of hiring, companies will do less of it”.



Vote no on measure R.