Laserfiche WebLink
<br /> <br />The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 2 <br /> <br />We present here, at the request of the City of San Jose, an analysis of the impact of minimum <br />wage increases for both San Jose and all of Santa Clara County. Both scenarios begin on January <br />1, 2017 and increase to $15 by January 1, 2019.1 <br />Critics of minimum wage increases often cite factors that will reduce employment, such as <br />automation or reduced sales, as firms raise prices to recoup their increased costs. Advocates <br />often argue that better-paid workers are less likely to quit and will be more productive, and that a <br />minimum wage increase positively affects jobs and economic output as workers can increase <br />their consumer spending. Here we take into account all of these often competing factors to <br />assess the net effects of the policy. <br />Our analysis applies a new structural labor market model that we created specifically to analyze <br />the effects of a $15 minimum wage. We take into account how workers, businesses, and <br />consumers are affected and respond to such a policy and we integrate these responses in a <br />unified manner. In doing so, we draw upon modern economic analyses of labor and product <br />markets. As we explain in the report, the main effects of minimum wages are made up of <br />substitution, scale, and income effects. The figure below provides a guide to the structure of our <br />model. <br />Figure 1. UC Berkeley IRLE minimum wage model <br /> <br /> Source: UC Berkeley IRLE Minimum Wage Research Group <br /> <br />8.A. - Page 16