A Minimum Wage Increase Triggers Tough Decisions

Karim Kurdi, a 31-year-old Los Angeles native, says he supports a minimum wage increase, but as an owner of a small convenient store in West L.A., he realizes it might push him out of business.


“I would love to pay my employees more but it’s tough,” Kurdi said. “Right now, I’m breaking even. I’m not really making any money.”     

Some of Kurdi’s employees travel to work from the downtown area or East L.A. and earn $9 per hour. But starting Jan. 1, 2016, their wage will be increased to $10 per hour in accordance with the state law.

Despite of his support of the increase, Kurdi says even a small change in his workers’s salaries will have a significant effect on his already tiny budget.

“It’s going to be tough time,” he said. “If the minimum wage will rise again, it might affect my workers because they’ll have their hours cut.”

Kurdi, a son of a Mexican and Lebanese immigrants, opened his business, a Mar Vista Ranch Market in 2002 after hiring four workers and renting a one-story building on a busy corner of Centinela Avenue and Venice Boulevard. 

For the first six years, he enjoyed stable income from his small store. He also managed to keep his prices low while filling the aisles with Iranian dairy, Mexican-produced Coke and local poultry and meat, which attracted residents, most of them live within a walking distance from the store. 

But in 2008, things started to change. Although the number of customers who shopped at the Mar Vista Ranch Market remained stable, the average spending has declined.  

“People used to buy products for several days and now they only buy for today, just one onion and one cilantro,” Kurdi said. “Now they’re very careful with their money.”


On a recent Sunday afternoon, Kurdi stood behind a register with a sticker that read “Credit or debit cards for $10 charge .50c.” A woman stopped by a register to pay for a watermelon and two mangos. 

The shelves in the store were filled with tea, yogurts, tamales, and produce with oversized tags attached to them advertising discounts. Kurdi said he has not need to promote his business. Most people in the neighborhood know he has the best deals. 

But three years ago, national retailers like Target, CVS and Walgreen started offering fresh yogurt, strawberries and frozen lunches expanding their business from selling apparel to offering groceries and produce.

And owners like Kurdi have to keep their prices low to survive the competition. 

“We can’t raise prices too much because people will start complaining more, and we’re going to lose customers,” Kurdi said. 


The competition, severe drought and high prices on meat and produce began to drag the business down even further, Kurdi said.

“After everything is paid and after we threw a lot of fruit and vegetables away because of the weather,” Kurdi said. “I’m not really making any money.”

The minimum wage increase will add up to his already barely-surviving business.

Still, despite all the challenges, Kurdi remains optimistic. He says the increase of the minimum wage won’t happen overnight, and he still has some time to plan his budget. 

“I think the government needs to wait until the economy gets getter,” he said. “And then raise the minimum wage again.”

The Makeover of downtown Los Angeles Through Small Business

Gary Russell stood behind his counter in the Grand Central Market in downtown Los Angeles. Surrounded by those old-fashioned, bold-colored vendor signs, Russell in a casual red shirt and his clean-designed counter felt like an invader to the atmosphere of nostalgia.


Photo credit: Peiwen Jing

Nevertheless, the crowd walking inside of the market in their sportswear  brought the sense of modern to this over-100-year-old marketplace, just like what Russell did with his kombucha tea bar in the past eight months.

CustomersIt was Saturday noon, one of the market’s busiest hours throughout the week. Two customers grabbed several traditional pork carnitas tacos, stopped by Russell’s counter, tasted different flavors of the kombucha teas they produced, and got two bottles of “midnight rose” as their drinks.

“The market has been there since 1917 and I don’t know some other place in LA quite like this,” said Russell. “The dynamic, the atmosphere, and also for the new organic and healthy choices coming in.”

Photo Credit: Peiwen Jing

Russell works for the Better Booch, a small business manufacturing kombucha tea in downtown Los Angeles. They get the organic tea leaf supply from the Art of Tea in Beverly Hills, brew the teas, and then add bacteria and yeast to let the mixture to ferment for a couple of weeks.


Better Booch has been in the business for more than two years. The small crafted kombucha tea brewery now has five employees, including their husband and wife duo co-founders Trey and Ashleigh Lockerbie. All of the five people working with Better Booch began their career in the show biz as touring musicians, mainly backing up popular international artists. “After years of exhausting travel and inconsistent schedules, we decided to make a change,” said the founder Trey Lockerbie.

The tiredness of inconsistent traveling around the world was one of the personal stimulators for the Lockerbie couple to switch their gears into the small business of cottage product. Meanwhile, the policy makers also sent their encouragement, by passing the bill to support the movement.

California passed the Homemade Food Act, which went into effect in January of 2013. Since then, the cottage food industry has been booming, bringing more and more food artisans to farmer’s markets and craft shows. Food artisans crafting everything from bread, candy and cupcakes to dried pasta and nut butters were legally allowed to sell their wares to the public.

The policy benefited to the Lockerbie couple. They started to sell their products in the famers’ markets across LA, and had no idea that the Booch is selling through 40 different locations. The spot in the Grand Central Market is their only retail revenue so far.

“Through our experiences with Better Booch, we’ve seen our highest highs and our lowest lows,” Ashleigh Lockerbie described their experience of running this handcrafted small business in this way. “You don’t get very far if you don’t work as a team and whether it’s music, a tea business or navigating life’s domestic challenges.”

Photo Sep 13, 12 23 20The Booch promises only use organic loose-leaf teas from a local supplier, with no added sugar in the way of juices, purees, syrups or powders. According to Russell, The cost for Booch’s manufacturing is generally higher than the similar kind of product, even higher than a national standard.

“You earn a little bit less but you are making a better product,” Russell thought the higher cost was hard to afford, but worth it. “We want the quality of the product.”

The business keeps going up, in Russell’s word, “each week is getting busier and busier.” Nevertheless, in Russell’s opinion, the larger the sales didn’t mean the larger the profit from running the small business. Some things have made the small business running a major challenge: the cost to produce, the high rent in downtown’s commercial zone, and now the possibility of a minimum wage hike in the following years.

“I think these guys who are governing have studied economy are just making a rough guess that you are making enough to pay people,” said Russell. “If we get more small business going, they can hire more people; that is better than a lot of people don’t have work, I think that is what they need to know.”

Nevertheless, as a employee, Russell’s income has been effected by the minimum wage level. “It could be a good thing but nobody can afford to pay that. They make the small business owners pay more, but somebody will get fired,” he said.

John’s Violin Shop

“We used to have multi-million business back in 1998-2004.” John Han, the owner of John’s Violin Shop, talked about the most prosperous period of time of his business. “But when the real estate bubble hit America in 2007 we have several rough years, annual sales were as low as $200,000. It barely covered the store’s expenditure and I lost near one million dollars.” Han said.

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Located at the intersection of Olympic and Catalina, Han’s music instrument shop shares Olympic/Vermont’s liveliness as well as Catalina’s tranquility. With more than 20 guitars hanging on the sidewall of the lobby, a little show stage at the corner with drums, and keyboard, the space is divided by several electronic pianos in the middle, and some layered up sound mixers to the ceiling. All the saxophones, trumpets and violins are hanged behind the counter for sale. The doors of the two small cubicles at the back are closed, with harsh and unskilled violin sound flowing out. A small but cozy music store.


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His business kicked off in another store step away in 1994, and had to move to 6th street in 2008 after huge loss from the nationwide economic crisis. “I could not afford the rent of my old store at that time, people don’t come by but I still need to pay huge amount of electricity, rent and other daily expense. I couldn’t afford that.” Han said.

As a matter of fact, He said the business turned downward since 2004 as a result from the growing popularity of the Internet. People started to look for information online instead of coming by physical stores. Meanwhile, C2C and B2C mode entered the market and began to eat a large share, and websites such as eBay became a new platform for selling and buying products. Potential customers commonly try and test different brands of instruments in a physical store and then shop online for the best price. Accessories such as strings, drumsticks, sheet music, and tuning condenser are often discounted online. Some even call real music instrument shops as “showrooms” of online stores. Except music business, the Internet also affects other businesses, including record stores, bookstores, travel agencies and post office for the time being.

However, Han said the biggest strike was still the economy recession from 2007-2012. In terms of the competition with the internet, he believed brick-and-mortar stores won’t be stock out of the market because customers still need to come for instrument checkup, repair and music lessons. “Like this one, it’s not even a violin bridge.” Han pointed at the oversize bridge under a violin’s four strings left by a Chinese customer. “China produces some of the best violins in the world, but violin workers in China don’t have good knowledge of the instrument itself,” Han said. In his forties, Han has already earned over 20 years of business experience, and he knows what makes a good violin store. He knows violin, and in his opinion, violins are only mass-produced pieces of wood if workers don’t know much about the instruments. He has many customers buying guitars or violins from the Internet coming to him for help tuning and repair. In his defense, store owners also benefit from the Internet because they can post adds online and get more publicity.

Han moved back to Olympic when the economy started to warm up in 2012. Instead of leasing the original location he started in 1994, he chose a much smaller outlet in the same street in order to cut budget. Till today, Han’s store has not fully recovered from the nightmare in Great Recession.

So far Han is happy with the growing business, even though it is still not as good as in late 1990s and early 2000s. He has 25 students learning different instruments there, ranged from 6-year-old elementary school kid to 74-year-old grandparent. On average about 35 customers visit the store, and since it’s back to school season right now, visits are almost doubled. Except September, Christmas is another busy period as a holiday season. Light season such as February and November, Han likes to add more promotions to stimulate the business.

Currently Han earns around $300,000 to $400,000 a year. He plans to accomplish half-million revenue in 2014, and aims to fully recover before 2020.






Are Haircuts a Monthly Necessity?

This past weekend, I drove to the City of Industry to get a hair cut from the same hair stylist that has been cutting my hair since I was 3 months old.

Vincent Chan, also known as Achan, has been a hair stylist for over 25 years. He learned how to style hair at a beauty school back in his hometown, Hong Kong. He speaks English, Cantonese, as well as Mandarin. This allows him to talk to customers of all different Chinese backgrounds.


I remember as a young child, my mother drove me to Vincent’s home to get a hair cut along with my cousins in his garage on a Saturday evening. This was the only time Vincent was free this weekend between working at the hair salon in Roland Heights and spending time with his family. Throughout the years, Vincent has upgraded from a salon chair in his garage to running his own Hair Salon in the City of Industry. Vincent has established a loyalty with his customers because his hairstyles get better with time. I have noticed throughout the years that his hair cuts may not look the absolute best after you walk out of the salon, however, after you wait a week or two, the hair grows into a natural yet carefully crafted look that I have not found with any other hair stylist.

He does have competition and I will admit that I have even personally gone to another hair cutter once before. However the reason Vincent has stayed in business for so long and attracts so many customers is this ability to plan for how the hair will grow in a couple of weeks.

One time my sister and I chose to try another hair stylist simply because we did not like the previous haircut from Vincent. Initially the new hair stylist gave us both haircuts that we loved as soon as we walked out of the salon, they looked great! However, after a few days we noticed that once our hair started growing, the hair style did not grow in a way that looked flattering and we quickly went back to Vincent after two or three weeks. He instantly noticed told us “You went to another hair cutter huh? I can tell because he’s an amateur and isn’t planning for how your hairstyle will look after your hair grows.” After that instance, I have not questioned Vincent’s skills on styling hair. I have asked to keep it shorter or longer in some areas but just as a general guideline because I trust him. Vincent has established customer base in the densely Chinese populated cities in Orange and LA County. The two cities he currently works out of are Irvine and City of Industry.

When the economy hit, he did feel a hit so he had to drop his prices a bit to accommodate for it. He has worked out of salons that charge him for renting the space as well as just hair cutting for commission. The revenue Vincent generates is contingent upon how much the salon charges him for using the space as well as how much he choses to charge his customers for a haircut. The recession did affect his business but not in the way one would traditionally expect it to. More interestingly, his customers asked if he could drop his price rather than them not showing up at all. The request was being triggered by the Chinese’s culture of upholding positive face or status. Many Chinese wives still went to Vincent to get their hair done extravagantly in order give off a false perception that the recession was not as detrimental to their family as it was to others, when in reality it may have been just as bad if not worse. He told me “I guess its just the Chinese culture of wanting to save face, but hey at least that meant I still had some business”. The frequency of visiting customers did not drop but instead the price he charged did because they asked for discounts.

Vincent’s business is actually relatively casual. There are no set prices. After the hair cut is over, you simply ask him how much you owe him and he gives you a number. My haircuts have ranged from $15-30$. It really just depends on how his family is doing or how the economy is doing. While this does seem quite absurd to some individuals, this is quite typical in Chinese culture, or at least what I’ve experienced in my 20 years of growing up in a Taiwanese family. Because my family has known Vincent for so long and has always gone to see him for our hair styling needs, he has kept the price relatively consistent. The only time prices increased was between the years of 2008-2010 and he admitted that he did charge us slightly extra because he knew we were loyal customers and would not mind pitching in a little more which we did not. However since then, he has not increased the price with us as he does with other customers or new customers. With that being said, because we have established that relationship my family along with myself still tip him rather generously. As a result, Vincent has always welcomed walk-ins for us because of how many years we have been going to him for hair styling.

In the past couple of years he has opened his own hair salon called Achan Salon. Achan is his Chinese name translated to English, personally I recognize him through that name as well. He had to get a loan to buy this salon. He got his loan for a relatively how interest rate however he asked me not to include the name of the bank as well as the interest rate because well it is relatively true stereotype that Chinese people are very careful with their money regardless of how trusted of a customer you may be. I can say that the bank is a widely used bank among the Chinese community in the San Gabriel valley area.


At his new salon, he is able to hire an assistant that helps with washing the customer’s hair before they get the hair cut. I was originally planning on asking him when I first visited him but kept in mind the Chinese culture of social respect so reframed form asking him when his assistant was there. When I went back home for the weekend, I made a short visit just to ask how much he was paying his assistant. Vincent explained that the assistant is more interested in learning the hair cutting trade than making money which is why he hired him in the first place. Technically, Vincent doesn’t need an assistant, he can wash the hair himself or not wash it at all if they don’t need it, however his assistant came to him and asked if he could simply work for minimum wage to shadow Vincent while he was styling people’s hair. Vincent agreed and is paying his assistant 12$. He started by paying him 8$ an hour because it was before they raised the minimum wage, however the assistant has done good work and Vincent has naturally raised his wage to 11$ in just a couple of month.

Achan, or Vincent Chan has not only survived the economic recession but has thrived and established a loyal customer base ranging from the southern ends of Orange Country to the northern tips of Los Angeles County.

Real Estate Industry-The Business That Will Never Die

Speaking of the great depression in 2008, Craven Ji was a little bit upset: “The sales of homes dropped by 50% that year, and house prices also decreased by 30% on average.” “However,” she then added, “As the economy is recovering recent years, the market is seeing a brighter future. Home prices have recovered by approximately 25%, which almost reach that of the peak time in 2006.”


Craven Ji, a real estate agent in Real Estate eBroker Inc. in Los Angeles, has been in the business of real estate for almost 9 years. Different from her colleagues, most of Ji’s customers are Chinese. According to Ji: 67% of all her customers are Chinese immigrants while another 33% of them are overseas investors from China, either looking for investment opportunities or trying to find a new house in America. Ji does most of her business in Pasadena, Arcadia, San Marino, USC and UCLA neighborhoods where Chinese people aggregate.


“The year 2008 was a hard time for me,” she said, “There were little overseas Chinese investors that time, and the local market was also frustrated by economic recession.” Ji only sold 7 properties in 2008, which was much less comparing to her average record of 20 houses sold per year. In fact, although the U.S. interest rate was pretty low during the economic downturn, most homebuyers were frightened by the poor economic performance and were thus resistant to borrow money from the bank. “When people earned money, they’d rather pay off their debt to the bank than spend them on other consumptions. They were simply not confident with the market,” said Ji. Because most of her customers rely on bank loan to buy house, the unwillingness to borrow money would definitely impact her business. Also, as bank owned foreclosures set home prices extremely low, home sellers had to cut down their price to the same level to be competitive in the market. The two sides kept going back and forth, which resulted in a huge decline in the market volume.

Now, several years after the real estate nightmare, the situation seems to get better. “Not only does the local market start to recover, but also does overseas capital continue to pour into the U.S. market,” said Ji. According to property consultant firm CoreLogic, home prices rose by 7.4% year over year in July 2014, and are expected to rise by 5.7% from July 2014 to July 2015. Moreover, according to LA Times, overseas homebuyers and new immigrants spent $92 billion on U.S. homes in the last year. The $92 billion amounts to 7% of all money spent on U.S. homes within a year, which is 35% higher than the year before. Among those purchases, 25% of them were made by Chinese buyers. Statistic shows that they are extremely interested in the Real Estate market in southland, including the city of Los Angeles, San Francisco and Irvine, which also helps drive up home prices in these areas.

Percentage Change in Home Price Index Year After Year

Chart 1When asking about the future of real estate market in the U.S., Ji expressed her concern over the median-price house market: “One challenge we are facing now is that there are less and less affordable houses in the market.” While the demand for median price house is going up, the supply is actually going down. In July, the median transaction price was $457,000, which is 7.6% higher than that of last year. Also, the market volume, which is 7012 this year, is 12.5% less than that of last year, according to CoreLogic’s recent report. Ji is worried that if the interest rate starts going up next year, there will be more competitions in the median-price house market.


With home prices showing an upward trend and overseas cash flowing to U.S. market, some people may ask: will there be another cyclical real estate economic downturn in the future? Also, what about the housing bubble that once led U.S. economy to collapse? Well, the questions may be hard to answer now, but one thing we are pretty sure is that the housing market won’t crash, since buying house is an American dream that will never die.

Is the Media Killing Small Business Owners?


I met Allan Allaf at a small auto insurance company located near USC. I introduced myself and somewhat desperately asked if I could meet the owner of the company for my assignment.  By this point, I was already denied four times by other small businesses due to different reasons and was extremely exhausted by the triple-digit weather. I think Allaf saw how desperate I was to get the interview. He told me he was the sales manager at the company but thinks he could offer me some help since he runs a boutique shop in downtown Los Angeles.


The first question that came to my mind was “why is he here if he has his own business?” But I didn’t want to seem too rude. I wanted to hear his story first.

So this is how the story goes. Allaf is the owner of “Treasurer Boutique” located inside the grand Millennium Biltmore Hotel in downtown Los Angeles. His fiancé currently is in charge of running the business. He used to have two more employees but had to let them go in order to cut to the bear essentials due to sluggish economy.  He first jumped into the business with $5,000, which he had paid his friend who used to own the boutique. The rest of the money came from loans, which, he is still paying back little by little. “I come here (insurance company) to work just so that I can sleep better at night.”

When I asked him if his business has been impacted by cyclical or secular shifts, he told me both factors impacted him. Then interestingly enough, he started talking very cynically about the media. “The media is a big problem from all aspects. It wouldn’t shut up about the economy and puts fear in people’s hearts. As a result, consumers become very aware about their money and refrain from spending. As long as the media keep making negative forecasts about the economy, I must keep coming here to work as a sales manager.

Mr. Allaf personally believes there is nothing wrong with the economy whatsoever. This doesn’t mean he didn’t have to change the way he runs the business. He had to stop buying smaller quantity of products from the regular vendor he used to purchase from. He began ordering larger quantity items from wholesaler to get a more discounted rate, which ultimately results in cheaper retail price. Nonetheless, despite the cheaper retail price he has to offer to consumers, there are discounts going on at pretty much all the time going anywhere from 10 to 60 percent and even 70 at times.

Interest rates or access to capital do not play a significant role in his business since people do not have to rely on third party to finance any of the items sold at the Treasurer Boutique nor the customers must be qualified by a third party to buy the products from his shop. Nonetheless, online market is a huge threat to him. “The online market is probably our biggest competitor that affects us the most. Unfortunately, small businesses like mine cannot buy in huge bulks of products as Amazon does to sell at those prices. Plus it is a lot easier to buy stuff from home than actually going into the store to purchase goods,” said Allaf.

Another challenge he faces as a small business owner is the huge amount of tax he must pay. “Small business runners pay more taxes than big corporations. I don’t mean in terms of numbers and figures but in terms of percentage,” said Allaf. Even though he did not see an increase in the fees he needs to pay, people’s spending has dropped by a significant amount. He feels that it’s unfair that only big corporations get the government’s advantage of having their tax cut while small business people are struggling more and more to pay their taxes. He is therefore currently thinking about getting more loans for his business. “It’s hard for us to decide whether people like us should get a loan or not. I think it’s almost impossible for small businesses owners, especially nowadays, to excel without the help of loans.”

Then he added, “we are constantly facing predicament. It’s a matter of whether we should build up slowly or make a fast leap.

Nonetheless, he seemed quite casual about these challenges. He said his business is quite easy to run because it pretty much runs itself. He was also very optimistic about the U.S. economy. “I believe there is nothing wrong with the economy whatsoever. It’s not a factor about the economy, it’s the media play,” explained Allaf.  He gets annoyed of how the press puts false fear in people everyday, which makes people spend only 10 dollars when it is totally fine to spend 20 dollars instead.

“I really hope the media can do their job right. In the end, it is them who makes the difference in the economy.”

The New “Fashion Empire”

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Carol He is a 32-year-old Chinese female, who has been living in America for 25 years. She is the boss of a “fashion company.” After deducting all costs, including wages, production cost, operation cost and all the other necessary spendings, the “company” makes about $150,000 net profit every month – and mounting. There’re 12 people in her “company” now, including her. You may be wondering: how can such a small company earn so much? Well, what I haven’t told you is, Carol’s “fashion company” sells faked luxuries. From my interview with Carol, I knew that if we only consider about profitability, this is indeed a great business.

Carol started selling faked goods 8 years ago. Back in 2006, she just graduated from university and found her first job in an airline company. When working there, she happened to get to know a Chinese handbag factory manager, Wang, who told Carol that his factory manufactures faked Chanel Classic Flap handbags, and that they’re exactly the same as the authentic ones, but with a much lower price. Carol told her friend. Her friend bought one and said to Carol that she walked in the Chanel store with the counterfeit, and no one recognized it. Since then, more and more people asked Carol for pictures of the bags by email or cell phone. Carol then created an account on MySpace to upload photos of newly manufactured handbags. People ordered by commenting or sending messages to her. By the end of 2007, Carol was able to sell about 10 bags every week, and earned around $3,000 monthly. At that time, the price of medium Chanel Classic Flap in lambskin was $2150, and the faked one was $300.


At first, Carol sold counterfeits just to make some extra money. “However,” she said, “soon I had a feeling that I was the only one in this business, and people were all asking me for bags.” According to her, most of her customers were Asians at the very beginning. But in the first half year in 2008, the number of people contacting her suddenly increased dramatically. In August 2008, she sold 128 Chanel Classic Flap handbags in different sizes and colors to customers all around the U.S., and her customers expanded from only Asian to Hispanic, Caucasian, Africa American, etc.

I asked her if she think the boost in her business has something to do with the Great Recession in 2008, she smiled and said:” Well, I don’t know much about economy, but thank god recessions never happened to me.” Carol decided to focus on the business and quitted her job at the end of 2008. The faked Chanel sold so well that she had to quit her job to take care of the business – she even hired an assistant to help her with customer service.

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Though the Great Recession didn’t impact Carol’s business directly, there was indeed a huge change – which she didn’t realize till now – that was emerging in 2008. “I remember it was in that year that a large number of competitors began to appear in the U.S. and China out of a sudden, to the extent that in 2009, the U.S. Customs had been very strict about import packages from China for quite a while, even non-business ones” – and that was when Carol officially started her “company.”

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Carol went back to China in August 2009, and stayed there for six months. During that time, she realized that there was much more demand for faked luxuries in China than in America. “There were so many people, they had so much money, yet they didn’t know where to spend.” At that time, Chinese economy was developing rapidly and led to dramatic rise in the population of millionaires. Luxury brands noticed the potential in China and were all trying to take a place in the market. Together with the emergence of various kinds of social media, such as Weibo – the Chinese Twitter – people got to know more brands. More importantly, they had the ability to make a purchase.

The number of luxury products is always limited – the more “luxurious” it is, the more limited it will be. Therefore, even if people have the money to buy a product, they’re not necessarily getting it. “So I wondered, what if I can sell various brands’ counterfeits that are identical as the authentic ones? Besides, the number of people who can’t afford to buy luxuries but still want one is always larger than that of people who can arbitrarily buy whatever they like.” Therefore, Carol met Wang again in China, and negotiated with him about expanding their production from only Chanel flap bags to all famous international boutique brands, such as Hermes, Christian Dior, Bottega Venetta, Celine, and so on. Carol buys authentic products from stores in America and sends them back to China, and Wang’s factory will take care of disassembling and dissecting them, in order to make identical counterfeits.

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Carol decided to change the way she sells as well. She still took care of the American market, but she became a supplier in China. As I’ve mentioned, there’re 11 people working for her directly. One of them is in Los Angeles helping Carol. Four are in charge of recruiting “sales associates (SAs)” in China – these “SAs” do not work for Carol; they simply purchase from her and sell in their ways. These four people in Carol’s group are responsible for communicating with SAs and making orders. Each of the four people has a staff who takes care of sending products to SAs.  Of the rest 2 people, one bookkeeper, and one who transports goods from Wang’s factory to Carol’s warehouses in China.


“We have 2 major problems now,” Carol said, “The first is that we’re short of staff.” Each SA recruiters now has to take care of more than 30 SAs, which is too many for them. Therefore, Carol might nominate one SA recruiter as the team leader, and he will be in charge of keeping necessary staff on his team. “The second one is more crucial – competitors are getting stronger.” Carol told me she didn’t feel any pressure competing with others even just a year before. But now, some “companies” are targeting higher quality, some lower price, while Carol’s marketing strategy has no obvious feature except for the mature distribution system. “Since I have a relatively large business in this field, I’m wondering segmenting the SA recruiters into different lines. For example, some recruits SAs whose customers are looking for better styles, others can be about lower price, rare products, etc.” Carol is also considering creating a new line exclusively for Hermes, since it’s the most profitable products that many people – from normal consumers to resellers who claim to sell authentic goods – are looking for.

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Speaking of Hermes, Carol laughed and said, “If I know anything about economy, it should be that scarcity prints money, and Hermes is the best example.”



$6 Dollar Standoff

$6 Dollar Standoff


As a 20 year old college student I’ve just started my journey into the working world. On top of being a student, I work part time in the music industry. Like most industries, you start at the very bottom and that comes with a cents on the dollar paycheck known as minimum wage. My own minimum wage paychecks, however, weren’t my first experience with the low dollar amount. Growing up I watched my father start a company that employed many minimum wage workers. Coming from a upper class family, I have never had to put a value to my time, and money has never been something that was a daily worry. While I was living comfortably though, many people that worked for my family’s business were living pay check to pay check. Starting my first job made me look at that business from a different perspective. My job made me ask, was I only worth $9? This new evaluation of myself made me take a second look at what minimum wage meant and the difficulties it presents.


This debate is very relevant to me, as the minimum wage increase has both positive and negative effects on my life. On one side, my check could definitely use the boost as just the commute to work itself eats up a third of the money. If I needed to solely live off my pay check it would be nearly impossible, especially in LA. On the other side, however, business owners like my father see the minimum wage increase as a threat to their company. With the city of Los Angeles looking to increase the wage to $15 it’s not just a dollar here and there, but a substantial new cost a company must undertake. With a personal interest in myself, and a deep interest in the success of my family business, this issue has become one to make me think deeper into why the minimum wage exists.

The most obvious claim is that we must value our workers more than the national average wage of $7.25. Many recent strikes have workers demanding wages that support their families, something more than a “starvation wage.” I can resonate with their frustration and the disappointment when opening the checks in the mail. If I was in a minimum wage situation indefinitely and it was my only source of income, I would need more money, but there is a lot more to this issue.

In small businesses that employ minimum wage workers, the wage allows them to be successful through competitive prices for their customers. Raising that wage by $6 more means huge new costs that must be shifted somewhere. I discussed this issue with my father who blatantly put it, there’s only two places for the new costs to come from, raise prices or cut jobs. In this situation companies will be forced to raise prices by potentially 50% to 60% just to compensate. The other option, firing workers, from my father’s perspective means the first to go will be those with the fewest skills, the current workers at or near minimum wage. Wages are set by supply and demand for labor. Using a minimum wage artificially influences that balance. So now you will have minimum wage workers making more money, but they have to spend more to live because they purchase goods and services from places that use minimum wage labor. The LA Times put the numbers into perspective “overall unemployment at the height of the Depression was about 25%. Especially for low-skill workers and for young workers, the two groups of workers who will be disproportionately hit by a minimum-wage increase, ours is a labor market in crisis.” The minimum wage is a struggle for business across the board as low production costs are top priority, and affordable labor is a necessity for operations.


The minimum wage increase doesn’t just effect the bottom line workers pay in a company it also affects company moral. As a minimum wage worker I do feel less valued than other employees because I make the least amount possible. While many people think raising the minimum wage would help workers feel more valued, it in fact has the opposite effect. There is a negative psychological effect with raising the minimum wage. When people earn raises and their pay goes up from the minimum wage, they feel good that they are now more valued. I myself would love to be able to say that I make more than base pay. When the wage goes up and workers are again making just minimum wage then they aren’t happy, and they want even more. Why should someone that has taken 10 years to earn $15 now be happy that someone brand new to the company at an entry level will make just as much as them. They will want a $6/ hr raise too. So the domino effect happens and it destroys companies and workers moral. Raising the minimum wage affects salaried managers as well. To be salary you must make at least double the minimum wage, so when the minimum goes up not all managers are making enough and now they are reclassified as hourly workers. This lowers their moral as they are no longer in this higher category of management. This just happened at our family business when the minimum wage increased from $8 to $9 as a lot of the front line managers were making $16 to $17.

This debate certainly isn’t easily answered as it is a complex issue with two very different sides. The minimum wage increase is a perfect case of putting oneself in the others shoes, it is a debate with each side having very little experience with the others circumstances. This lack of understanding is what has created a standoff in Los Angeles over $6. My unique situation has allowed me to gain some insight into the differing perspectives and see why each side is willing to battle so hard.

Struggles Behind Big Money

Photography by Yingzhi Yang

Refueling the car every other day, working seven days a week, shuttling back and forth deep in the concrete jungle, is the kind of life Sergio Sanjurjo gets along with every single day. And he loves every second of it.

Sanjurjo, 25, has been driving for UberX in Los Angeles for five months. Along with doing two other jobs — property manager and marketing promotion— he would be lucky to have five hours to sleep everyday.

“Bills and prices of everything is getting higher, so the only way to get ahead in life is you gotta hustle hustle hustle,” Sanjurjo said, laughing. His main goal is to make enough money within ten years and retire by 35. 

His weekly revenue from driving 30 hours a week is $950. According to Uber’s 80-20 split policy, he gets $760. “Whatever you make, you get 80%,” Sanjurjo said, “so it would be worth driving.” 

Subtracting gas bill $100, car maintenance fee $20, iPhone rental fee $10 (Uber rents an iPhone to each driver to connect them to the APP and block incoming calls) and insurance $30 from $760, he makes a weekly income of about $600. “You can’t complain about that,” He smiled and said, “now your car is working for you instead of you working for a car.” 

Sanjurjo enjoys being an Uber driver most. Not only earning double what he made at a nine-to-five-job, but the sense of making money for himself instead of for somebody else makes him happy. “Different from punching clock everyday, I come and go as I please,” he said.

Being an Uber driver also makes him proud. Some customers come to his car and complain how expensive and smelly the taxies are, how rude the taxi drivers are, and meanwhile express how much they enjoy taking Uber. 

But a recent UberX fares slash by 25% makes Sanjurjo feel the sting. Sanjurio ups his driving time by ten hours per week just to make what he was originally making.

In order to get more rides, he has to keep an eye on the hotspot map showing where all the Uber drivers are, trying to drive further out to avoid a bunch of drivers near him. He also has to stay out longer to pick up people further away where he would not like to be originally.

Especially in traffic, the cost remains the same while the revenue seriously drops. He could be stuck for more than an hour making barely any money. “Driving in traffic is not fun,” Sanjurjo said. 

Sanjurjo always chooses not to drive in traffic. He gets off early, utilizes his day and goes home early before rush hour.

Cutting the price is not the only way Uber leverages supply and demand principles. Actually, Uber is using dynamic pricing — raising prices when the demand is high, cutting prices when the demand is low. As MIT professor Yossi Sheffi puts it, it’s the “science of squeezing every possible dollar from customers.”

During a snowstorm in New York last December, for instance, UberX gouged the price 8.25 times the normal amount. But high risk always comes along with high reward. As James Surowiecki writes in In Praise of Efficient Price Gouging, “the reality is that the times when people most want a ride are also the times when it’s most annoying and, often, most risky to drive.”

For an Uber driver like Sanjurjo in L.A., where snowstorms never happen, surge pricing during times of high demand is the best thing that could happen. “Thanks to the surge pricing strategy,” he said, “it makes me some really good money.” He once made $200 on a normally $40 ride.

The surge pricing is short lived. More often, he deals with annoying cancellations. “It’s irritating when you are on your half way to pick somebody up and they just cancel on you at the last minute,” Sanjurjo said.

Uber’s cancellation policy tries to minimize the hurt by charging a cancellation fee if people cancel rides after five minutes. But any cancellation within the five minutes costs drivers’ money. The unpleasant episode, happening three or four times a day, costs Sanjurjo three or four full gallon of gas.

Sanjurjo’s biggest concern right now is whether decision makers in Sacramento will ban Uber in California. He doesn’t want to lose his favorite job. “I hope they can see that a lot of people make a good living on this and a lot of consumers enjoy it,” he signed.

After topping off his car, Sanjurjo turns on the engine and releases the brake. He and his car blends into the armored concrete and steel.