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<br /> <br />The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 8 <br /> <br />• Total wages would increase by 9.5 percent for restaurants and one 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 will get pay increases are already <br />paid over the current minimum wage. In addition, the workers who would receive pay <br />increases are the lowest paid workers in Santa Clara County and their wages represent <br />only 6.1 percent of total wages. <br />• Employee turnover reductions, automation, and increases in worker productivity would <br />offset some of these payroll cost increases. <br />• Businesses would absorb the remaining payroll cost increases by increasing prices <br />slightly—by 0.2 percent through 2019. This price increase is well below annual inflation of <br />nearly 2.5 percent over the past five years. Price increases in restaurants would be higher <br />at 2.9 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 <br />11 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 Santa Clara County and nine nearby counties – by 2019 <br />• Our estimate projects slower employment growth over the phase-in period than without <br />the minimum wage increase: cumulatively, 1,350 fewer jobs by the end of 2019 in Santa <br />Clara County, which corresponds to 0.1 percent of projected 2019 employment. In <br />comparison, employment in the state is projected to grow 1.32 percent annually in the <br />same time period. <br />• Based upon regional commuting and spending patterns, we estimate a net gain of less <br />than one hundred jobs over the larger region that includes the counties of Santa Clara, <br />Alameda, San Mateo, San Francisco, Santa Cruz, Monterey, and San Benito. The <br />employment gains generated by a $15 minimum wage within Santa Clara County are <br />spread over nearby counties. <br />8.A. - Page 22