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<br /> <br />The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 53 <br /> <br />WAGE LEVEL <br />Economists often look at two summary statistics when assessing a proposed minimum wage <br />increase schedule. The first measures the ratio of the minimum wage to the median full-time <br />wage, a common metric used both in the U.S. and in other countries (Organization for Economic <br />Co-operation and Development (OECD) 2013). The second estimates the percentage of the <br />workforce directly or indirectly affected by the minimum wage increase. Both metrics provide a <br />measure of scale of impact and therefore give us insight into the ability of an economy to absorb <br />higher minimum wage levels (the two metrics are related but do not necessarily move in strict <br />tandem). Table 11 shows our estimates of these metrics for the San Jose and Santa Clara County <br />minimum wage scenarios at $15 in 2019. <br />We begin with the ratio of the minimum wage to the median full-time wage (minimum-to-median <br />ratio for short). Historically, this ratio reached a high of 55 percent in 1968 at the federal level <br />(Dube 2014). The average for OECD countries is 49 percent; five, including France and New <br />Zealand, have minimum-to-median ratios of 60 percent or more (2013). The United Kingdom <br />recently pegged the minimum wage to a ratio of 60 percent (O’Connor 2016). <br />Table 11 shows that $15 an hour in 2019 would result in a minimum to median ratio of 41 <br />percent in San Jose and Santa Clara County, well within the historical range in the United States. <br />Even at $20, the minimum to median ratio in San Jose or Santa Clara County would be below 55 <br />percent. This compares to 62 percent for $15 in California when full phased in in 2023. New York <br />City is projected to reach 57 percent, Los Angeles 62 percent, Seattle 53 percent and San <br />Francisco 46 percent at the point of full implementation in each of those cities. <br />It is important not to place too much weight on the minimum to median wage measure. While the <br />minimum to median ratio provides a simple tool of thumb for comparisons across geographical <br />areas, it can be misleading on its own, especially for small geographic areas, and is best used in <br />combination with other measures. <br />8.A. - Page 67