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<br /> <br />The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 5 <br /> <br />• The research literature suggests downstream benefits from the proposed wage increase, such <br />as improved health outcomes for both workers and their children, and increases in children’s <br />school achievement and cognitive and behavioral outcomes. <br />Effects on businesses and consumers – by the end of 2019 <br />• Three industries account for over half of the private sector workers getting increases in San <br />Jose: restaurants (21.0 percent), retail trade (19.1 percent), and administrative and waste <br />management services (14.7 percent). <br />• 77.8 percent of workers in the restaurant industry in the private sector would receive a wage <br />increase, compared to 11.5 percent in manufacturing. <br />• Total wages would increase by 10.1 percent for restaurants and 1.3 percent across all <br />employers. This increase is much smaller than the minimum wage increase because many <br />businesses already pay over $15 and many workers who would get pay increases are already <br />paid more than the current minimum wage. In addition, the workers who would receive pay <br />increases are the lowest paid workers in San Jose and their wages represent only 8.3 percent <br />of total wages. <br />• Employee turnover reductions, automation, and increases in worker productivity would offset <br />some of these payroll cost increases. <br />• Businesses could absorb the remaining payroll cost increases by increasing prices slightly—by <br />0.3 percent through 2019. This price increase is well below annual inflation of 2.5 percent <br />over the past five years. Price increases in restaurants would be higher, 3.1 percent. <br />• Price increases would be much smaller than labor cost increases because labor costs <br />average about 22 percent of operating costs; compared to 31 percent for restaurants and 11 <br />percent for retail. <br />• The consumers who would pay these increased prices range across the entire income <br />distribution. <br />Net effect on employment in San Jose, Santa Clara County and nine nearby counties <br />– by the end of 2019 <br />• Our estimate projects slightly slower employment growth during the phase-in period than <br />without the minimum wage increase: cumulatively, 960 fewer jobs by the end of 2019 in San <br />Jose, which corresponds to 0.3 percent of projected 2019 employment. In comparison, <br />employment in the state is projected to grow 1.32 percent annually in the same time period. <br />8.A. - Page 19