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<br /> <br />The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 29 <br /> <br />4. EFFECTS ON BUSINESSES <br />How a higher minimum wage affects a firm depends on how much the firm’s operating costs <br />change and on how the firm responds to those changes. In this section, we first identify the <br />industries that will be highly affected by the two minimum wage increase scenarios. We then <br />estimate the impact of the minimum wage increases on firms’ operating costs across the entire <br />economy and for highly affected industries, taking into account savings from reduced turnover. <br />We describe the effects on businesses separately for Scenario A (San Jose) and Scenario B <br />(Santa Clara County). <br />4.1 Scenario A: San Jose <br />Minimum wage increases do not affect all industries equally. We therefore begin with an analysis <br />of the impact of Scenario A at the industry level. Table 6 shows the estimated distribution of <br />affected workers across San Jose’s industries by 2019. In the first column, we show the <br />percentage of the overall eligible San Jose workforce in each industry. The second column <br />displays our estimate of the distribution across industries of workers getting a raise under the <br />scenario. The third column presents our estimate of the percentage of workers getting a raise <br />within each industry. <br />Over half of affected workers are employed in just three service sector industries: food services <br />(21.0 percent), retail (19.1 percent), and administrative and waste management services (14.7 <br />percent), which is comprised mainly of building services contractors and employment agencies. <br />The service sector also dominates the list of industries that have high rates of low-wage work— <br />that is, industries where we estimate a high share of workers will get a raise (for example, 77.8 <br />percent in food services and 50.7 percent in administrative and waste management services). <br />We also examine the sectoral distribution of affected workers in Table 6. Our estimates show that <br />affected workers are largely employed in the private, for-profit sector. Nonprofit and public sector <br />workers are less likely to be affected than the overall San Jose workforce. <br />8.A. - Page 43