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 44 Panel A.23 The result is an estimated net income increase of $204 million by 2019 in San Jose, and $305 million in Santa Clara County and nine nearby counties. We then use IMPLAN to estimate the increase in employment for San Jose resulting from the increased household spending triggered by the income increase, accounting for multiplier effects and spending leakage outside the city (respectively outside Santa Clara County and nine nearby counties).24 Row 9 shows the employment change associated with this increase in income in San Jose (column 1), and in Santa Clara County and nine nearby counties (column 3). Panel D: Net effect As we have previously mentioned, the substitution productivity, scale, and income effects in Parts A to C occur simultaneously, not sequentially. It is thus not correct to infer that the employment changes in Parts A to C actually occur. Net employment changes occur only to the extent that is registered after we add Parts A to C together to obtain the net effects. Panels A to C do tell us that the net effects will likely differ by job wage rates. In particular, the automation and productivity effects in Part A will occur entirely among low-wage jobs. The scale and income effects of Parts B and C, however, will affect jobs throughout the state’s consumer demand industries and among a much broader wage distribution. We have not been able to quantify these differences, as they depend on the relative concentration of scale and income effects in low-wage industries. In Panel D of Table 10, we present our estimate of the net change in employment from scenario A. • For San Jose only (column 1), we estimate a cumulative net loss in employment, due to the policy, of 960 jobs by 2019, or -0.3 percent of total employment. To put this estimate in context, we project, based on past QCEW data on employment that San Jose will grow annually by 1.32 percent from 2014 to 2019. (For more details see Appendix A2.) • For Santa Clara County as a whole and nine nearby counties (column 3), we estimate a cumulative net loss in employment, due to the policy, of 80 jobs by 2019, or -0.0 percent of total employment. We’ve also assumed that this broader region will grow annually by 1.32 percent from 2014 to 2019, at the same pace as San Jose. (For more details see Appendix A2.) We emphasize again that our cumulative estimate will be spread over the preceding years of the minimum wage increase—the 2019 estimate includes effects in 2016, 2017, 2018 and 2019. The key point in Table 10 is that a $15 minimum wage has negligible effect on net on employment when examining the region as a whole. 8.A. - Page 58