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 54 Table 11. Minimum wage to median ratio, bite and average percent increase per year Minimum Wage to Median Full-Time Ratio Share of workers getting pay increases (Percent) Average Percent Earnings Increase (Percent) San Jose ($15) 0.41 31 18 Santa Clara County ($15) 0.41 25 19 San Jose ($20) 0.55 NA NA Santa Clara County ($20) 0.54 NA NA California 0.62 39 24 New York City 0.57 35 28 Los Angeles City 0.62 39 29 Seattle 0.53 29 NA San Francisco 0.46 23 16 Sources: UC Berkeley-IRLE calculations using ACS data and Cooper (2016) for New York State; Reich et al. (2015) for a $15.25 minimum wage in Los Angeles and in Seattle; Reich et al. (2014) for a $15 minimum wage by 2018 in San Francisco. Notes: The figures are provided for the end point of the minimum wage increase. The end point for California is 2023. It is 2019 for New York City and Los Angeles and 2018 for Seattle and San Francisco. The Share of workers getting pay increases for Seattle is the percent of employees who earn $15 or under and live and work in Seattle. Our second metric shows that that the percentage of workers directly and indirectly affected under the proposed law. The share of affected workers in San Jose (31 percent) and Santa Clara County (25 percent), are below each of the other $15 minimum wage laws, with the exception of San Francisco (23 percent). Similarly, the average projected increase per worker in San Jose (18 percent) and Santa Clara County (19 percent) are well below the other policies, again with the exception of San Francisco (16 percent). In contrast, state and federal minimum wage increases between 1979 and 2012 have generally affected 10 percent or less of the workforce (D. H. Autor, Manning, and Smith 2016). Effects of a $20 Minimum Wage Setting a higher minimum wage (such as $20) can be expected to amplify each of the effects discussed in the minimum wage model, but not to the same degree. The higher wage level is likely to increase the negative consumption effects caused by higher prices, and negative employment effects from automation and increased productivity. Since more of the individuals receiving wage increases would have higher income levels, either as a result of the wage increase or because the increases are reaching farther up into the wage distribution, a greater portion of the increased wages is likely to be saved rather than spent. This means that the positive consumption effects from higher wages will decline as the size of the increase goes up. As a result, a $20 minimum wage in 2019 is likely to generate larger negative net employment effects. To understand the size of those effects would require further research. Any projections at wage levels much higher than previously studied necessarily entail greater uncertainty. 8.A. - Page 68