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 64 The reduction in wage bill due to substitution effects and productivity gains ([7]) is calculated by multiplying the reduction in number of jobs due to capital-labor substitution and productivity gains ([8]) by the nominal average annual earnings of workers who would otherwise remained employed ([9]). Table A1. Structure of the UC Berkeley IRLE minimum wage model for the case of San Jose A. Workers affected and wage increases Total employment [1] Total number of affected (directly and indirectly) workers in San Jose in 2019 [2] Working age population growth from 2014 to 2019 [3] B. Impact of K-L substitution and productivity gains on number of jobs and wage bill Reduction in # of jobs from substitution effects and productivity gains [4]=[5]+[6] Reduction in # of jobs from substitution effects in 2019 [5] Reduction in # of jobs from productivity gains in 2019 [6] Reduction in wage bill due to substitution effects and productivity gains job loss (in millions) [7]=[8]*[9]/1e6 Reduction in # of jobs from substitution effects and productivity gains [8]=[4] Nominal average annual earnings of directly and indirectly affected workers without the policy [9] C. Scale effects: increase in consumer prices and reduction in consumer demand Percentage increase in consumer prices [10]=[11] Percentage increase in operating costs [11]=[12]*[13] Payroll share of operating costs [12] Net percentage payroll increase, accounting for savings from reduced turnover and productivity gains [13] Annual reduction in consumer demand from price increase (in millions) [14]=[15]*[16] Percentage reduction in demand from price increase [15] Annual aggregate consumer spending in San Jose (in millions) [16] Reduction in # of jobs from consumer spending reduction in San Jose [17] Reduction in # of jobs, as a percentage of total employment [18] D. Income effects: effects of pay increases on consumer spending and employment Net change in compensation for workers in San Jose (in millions) [19]=[20]-[21] Total wage increase for state workers in San Jose from proposed minimum wage increase (in millions) [20] SNAP and ACA benefit reduction [21] Increase in # of jobs from wage increase in San Jose (respectively in SC county and nine counties) [22] Increase in # of jobs, as a percentage of total employment [23] E. Net effects Cumulative net change in # of jobs in San Jose [24] Cumulative net change in # of jobs, as a percent of total employment [25]=[24]/[1] Annual net change in # of jobs in San Jose [26]=[24]/5 Annual net change in # of jobs, as a percent of total employment [27]=[25]/5 Source: UC Berkeley minimum wage model. 8.A. - Page 78