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greg hatem - empire

Greg Hatem (photo by Ana Pardo).

As a follow up to National #WageWeek, the Progressive Pulse is highlighting the work of local business leaders who are raising the wage floor for their employees. This blog post is the first in the series, and represents an interview with Greg Hatem, owner of Empire Properties and Empire Eats in downtown Raleigh. Hatem worked with his staff over the past year to raise the wage floor to $10.15 for all 550 employees across his companies.

Q: When did Empire decide to prioritize raising the wage floor?

A: “Creating a long-term relationship with our employees has always been important. About 8 months ago we committed to getting it done within a year. It wasn’t easy, and it wasn’t just because of financial issues. We had legacy employees, where when we started looking we realized someone had a wage because of when they were hired, and then you’re bringing somebody else on at a different wage. So we had to slowly equilibrate that and make sure that we bring new people on at a good salary. We did it position-by-position and restaurant-by-restaurant, and we finished it up last month.”

Q: What were the underpinning values behind the company’s decision?

A: “It’s not just about work or a job, it’s about people and culture. What we value most are people that believe in the mission and the culture, and we want to make sure there’s a relationship. It’s not just an employer-employee relationship; we have people trying to help us create our vision, and in return we have a responsibility to help them create their vision and take care of their families. So it’s very symbiotic.”

“It was something we believed was possible if we had time enough to plan for it. That’s why we gave ourselves a 12-month window to do it strategically. Our belief is we end up working with folks that are more productive, who are happier, their life situation is better. What you’re really doing is investing in your people, and that has a return in itself. It’s just smart business to take care of the people around you, because that is the core of your business. If you take care of your people, they’ll take care of your guests. It’s not an expense, it’s an investment.”

Q: What was the reaction from your employees when they learned of the changes?

A: “We had a huge response from [employees] when we did it, because they knew we cared. I actually had one of the guys in the kitchen give me a hug because it meant that much to him. We have so many people that have been with us for 3, 5, 10 years. We’re there for each other.”

Q: What advice would you give to other business owners considering a similar move?

“Invest in your people. Invest in them in the day-to-day […] and help them become better at their job. When you do that, you create a better environment for your guests, and that’s the virtuous cycle.”

This interview has been edited for brevity.

NC Budget and Tax Center

During yesterday’s tax reform debate on the House floor, we heard a lot about the need to cut personal income taxes so that small businesses can create jobs and the economy can grow.  This is a growing refrain among advocates for tax cuts for the wealthy, so common in fact, that policymakers made it once before—in 2011, when they passed an exemption of business pass through income, an exemption that they are now repealing (apparently the tax cut didn’t work).

As with many of the claims made during the debate about taxes this session, the idea that personal income tax cuts spur job creation is just not borne out by the facts.

Personal income tax cuts for the wealthiest taxpayers do not target actual small business job creators. Only 2.7 percent of personal income taxpayers are owners of small businesses that have employees, according to the U.S. Treasury Department. Moreover, profits from small businesses with paid employees account for less than 4 percent of the total income earned by households with incomes over $100,000 nationally.  There is no evidence that businesses owned by high income taxpayers have more employees than those owned by lower income taxpayers, and as a result, no reason to provide tax cuts that disproportionately benefit those with the highest incomes.  And for many small business owners of any income level, there is often limited interest in growing the size of their business—consider a family restaurant, for example—so again, cutting these business’s won’t lead to job creation.

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Uncategorized

Today The Support Center released a new report titled “Community Development Financial Institutions in North Carolina: Creating Jobs and Community Economic Development,” which looks at the role of Community Development Financial Institutions (CDFIs) in North Carolina’s economy. CDFIs were established in the 1990s under the US Department of Treasury’s CDFI Fund. These community-based financial institutions provide loans and financial services aimed at revitalizing the nation’s underserved and distressed communities. In North Carolina, there are 17 CDFIs including 10 loan funds, five credit unions, one venture capital fund, and one bank. CDFI banks and credit unions provide affordable personal and business financial services to those who might not be able to access these services through traditional banks. CDFI loan and venture capital funds expand access to capital for small businesses, microenterprises, commercial and residential real estate development (including affordable housing), home purchases, and consumer loans.

As traditional banks pull back from lending, tighten their lending standards, and close down many of their branches, CDFIs have stepped in to fill the gap. In 2010, the 17 CDFIs in North Carolina helped to finance 33,000 businesses and developments that have created 3,100 jobs across the state. CDFIs also provide technical assistance and financial literacy training to help their members and borrowers improve their financial management skills in the long-run. Read More

NC Budget and Tax Center

As Congress debates solutions to the “fiscal slope,” the future of the Bush Tax Cuts on incomes over $250,000 continues to play a pivotal role. Allowing these tax cuts to expire will provide over $1 trillion in new revenues—a key component of a balanced approach to deficit reduction—yet we consistently hear that taking this approach will disproportionately harm small business “job creation” and long-term economic growth.

As a new policy brief clearly demonstrates, these concerns have little merit—allowing these tax cuts to expire will have virtually no impact on the kind of small businesses that genuinely contribute to job creation. The specific tax changes under discussion would allow the 2001 and 2003 tax cuts on incomes above $250,000 to expire in 2013, thus changing the top marginal tax rate from 36 percent to 39.6 percent.  According to the report, allowing the upper income tax cuts to expire in this way would affect only small percentage of small business owners and small business income, and even those few would see no significant barrier to capital reinvestment and job creation as a result.

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NC Budget and Tax Center

Over the last three months of this year, Congress faces the critical challenge of addressing the scheduled expiration of $5 trillion in tax cuts passed under Presidents Obama and Bush, currently slated for January 2013.  In addressing this challenge, Congress will have to decide who needs the most help. So the real question is:  Who will have a better 2013, moms or millionaires?

A study released today from the Center on Budget & Policy Priorities lays out the perils of helping millionaires at the expense of helping moms.  Eliminating the expansion of middle-class tax credits like the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Credit will increase the burden for half a million families and over 1 million children. Moms rely on these credits to meet the needs of their families.

Congressional proposals geared towards helping millionaires instead would increase the deficit by over $1 trillion while providing enormous benefits for just a handful of the state’s residents. Only 1.4% of the state’s families and 2.5% of the state’s small businesses will benefit from the extension of the Bush-era tax breaks. Only 140 families—less than 0.2% of the state’s population—would benefit from the proposed inheritance tax cut. Their average tax cut would exceed $1 million, in contrast to the $2,000 in tax credits a poverty-line family of three would receive under the Senate plan.

Given the state’s rising unemployment and a stagnating economic recovery, eliminating these credit expansions and increasing the burden on working moms and families would be the worst possible policy to pursue. Let’s help moms instead of millionaires.