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<br /> <br />The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 62 <br /> <br />1. We use data from the California Employment Development Department to adjust the <br />industry and sector distribution of the county-level ACS data to match the city’s <br />distribution. <br />2. We adjust wages for two high-impact industries where QCEW data show a significant <br />difference in wages in San Jose and Santa Clara County. <br />Our model for Santa Clara County takes into account the different local minimum wage laws in <br />effect within the county (see Table 3). <br />Identifying affected workers <br />Our model estimates the impact of minimum wage increases on three groups of affected <br />workers: minimum wage workers, subminimum wage workers, and those who are indirectly <br />affected (via spill-over effects). The spill-over effect means that workers who make slightly more <br />than the new proposed minimum wage level are also likely to receive wage increases. <br />The main group of affected workers – minimum wage workers – consists of those who earn <br />between the old minimum wage and the new minimum wage. Given measurement error, we <br />include in this group workers who earn somewhat below the old minimum wage (down to 90 <br />percent of the old minimum wage). Subminimum wage workers include those earning between <br />50 percent to 89 percent of the old minimum wage. Indirectly affected workers are those earning <br />between 100 and 115 percent of the new minimum wage.29 <br />We then estimate the additional wages earned by affected workers as a result of the minimum <br />wage increase scenario, as summarized in Table A1. Minimum wage workers simply receive the <br />new minimum wage. Subminimum wage workers receive a percentage wage increase of the <br />same size as the percentage change in the statutory minimum wage. Indirectly affected workers <br />receive a quarter of the difference between their current wage and the upper bound of the spill- <br />over band (115 percent of the new minimum wage). <br />This model is used to simulate the scenario minimum increases for each of the phase-in years <br />from 2017 to 2019, but also to simulate baseline minimum wage increases between 2013 and <br />2019 (i.e. minimum wage increases that have already occurred or are planned under existing <br />law). We model overall regional wage growth over time using the average annual growth rate of <br />the San Francisco CMSA CPI-W Urban Wage Earners & Clerical Workers between 2005 and 2014 <br />(2.45 percent). <br />8.A. - Page 76