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<br /> <br />The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 23 <br /> <br />Table 3. Estimated cumulative impacts on workers by 2019 <br />Cumulative workforce impacts Scenario A: <br />San Jose Scenario B: <br />Santa Clara County <br />Percent of eligible workforce receiving pay increases 31.1% 25.3% <br />Total number of workers receiving increases 115,000 250,000 <br /> Number of workers affected directly 92,000 198,000 <br /> Number of workers affected indirectly 23,000 52,000 <br />Average hourly wage increase (2014 dollars) $1.81 $1.92 <br />Average annual earnings increase for workers receiving increases (2014 <br />dollars) $3,000 $3,200 <br />Average percent annual earnings increase for workers receiving increases 17.8% 19.4% <br />Total aggregate increase in wages (2014 dollars) $345 million $796 million <br />Source: Authors’ analysis of ACS, OES, and QCEW data. See Appendix A1 for details. <br />Note: Santa Clara County impacts include those for the entire county, including San Jose. Eligible workers are those that work in <br />the city/county where the new minimum wage policy is implemented. Directly affected workers earned between 50% of the old <br />minimum wage and 100% of the new minimum wage. Indirectly affected workers earned between 100% and 115% of the new <br />minimum wage. Average annual earnings is per worker, not per job. <br /> <br />We also estimate the additional earnings that affected workers would receive under each <br />scenario, relative to their earnings under current minimum wage schedules. Table 3 shows the <br />estimated cumulative increase in affected workers’ hourly wages, annual earnings, and <br />percentage increase in annual earnings, as well as the cumulative total earnings increase for all <br />affected workers. By full implementation in 2019, we estimate that the wages of affected <br />workers will have risen by about $1.92 per hour in Santa Clara County and $1.81 per hour in San <br />Jose. That amounts to an estimated additional $3,000 in earnings per year for impacted workers <br />in San Jose and $3,200 for impacted workers in Santa Clara County. In total, we estimate that <br />affected workers will earn an additional $796 million by 2019 in Santa Clara County. In San Jose, <br />we estimate that affected workers will earn an additional $345 million by 2019. All estimates are <br />listed in 2014 dollars.8 <br />3.2 Impact on Benefits Eligibility and Poverty <br />Some policymakers have expressed concern that affected workers and their families could <br />ultimately be worse off after minimum wage increases if they are no longer eligible for means- <br />tested social assistance programs. However, research suggests that most workers will come out <br />well ahead financially, because the benefits from most social assistance programs phase out as <br />recipients’ income rises. This means that as the earnings of affected workers rise, the benefits <br />they receive will gradually decline instead of being eliminated all at once.9 In fact, the <br />Congressional Budget Office (Congressional Budget Office 2012) has estimated that the average <br />marginal tax rate for low-and moderate-income workers is 34.8 percent, meaning that affected <br />workers will keep 65.2 cents of each additional dollar they earn. So while taxes and reductions in <br />social assistance benefits will erode some of the additional earnings for affected workers, most <br />8.A. - Page 37