AgdaPkt 2017-09-25 Closed and Joint SA PFA

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The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 22 3. EFFECTS ON WORKERS We begin by analyzing the effects of the Scenario A (San Jose) and Scenario B (Santa Clara County) minimum wage increases on workers. To estimate these effects, we use publicly- available government datasets to model (a) the number of workers who would receive pay increases under the two minimum wage scenarios and (b) the size of those wage increases. We exclude federal and state government employees, local school district employees, In Home Supportive Services (IHSS) workers, and self-employed workers from our analysis, since those groups of workers would not be eligible for local minimum wage laws. Specifically, for each scenario, our model produces two different simulations of the future wage distribution. First, we conduct a baseline simulation, in which we assume that the minimum wage will increase each year according to minimum wage laws that are already in effect (see Tables 1 and 2 above). For Scenario B (Santa Clara County), we assume that cities that do not have their own minimum wage law will follow the state minimum wage schedule in effect as of January 1, 2016 (again, this analysis does not take into account the new state minimum wage law signed in April 2016). Second, we conduct a simulation that models the future wage distribution under each of the two minimum wage increase scenarios. We then compare the baseline and scenario simulations and estimate, for each yearly phase-in step, the number of workers that would be affected by the scenario and the additional wages they would receive as a result, above and beyond any currently scheduled minimum wage increases. In constructing these estimates, our model adjusts for expected growth in employment, wages and inflation over time. Our estimates also take into account what is often referred to as a “ripple” or “compression” effect: workers who make slightly more that the scenario minimum wage are also likely to receive wage increases. More information on our methodology is available in Appendix A1. 3.1 Workforce Impacts Table 3 shows the estimated number and percentage of eligible workers affected under Scenario A (San Jose) and Scenario B (Santa Clara County). Under Scenario A, we estimate that 115,000 workers in San Jose will receive a pay raise by 2019, or about 31.1 percent of the eligible workforce. Of these, 92,000 are directly affected workers (earning less than $15 per hour when the scenario would be fully implemented in 2019) and 23,000 are indirectly affected (earning slightly more than $15 per hour when the scenario would be fully implemented in 2019). Under Scenario B, 250,000 workers, or about 25.3 percent of the eligible workforce in Santa Clara County, would receive a pay raise by 2019. Of these, 198,000 are directly affected workers and 52,000 are indirectly affected workers. Estimates for Santa Clara County include San Jose. 8.A. - Page 36