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<br /> <br />The Effects of a $15 Minimum Wage by 2019 in Santa Clara County and San Jose 67 <br /> <br />sources we used. The values of the key parameters used in the model are summarized in table <br />A2. <br />Table A2. Key parameters of the model <br /> <br />In San <br />Jose <br />In Santa <br />Clara County <br />A. Workers affected and wage increases <br />Working age population growth from Dec 31 2012 to July 1 2021 6.79% 6.79% <br />B. Impact of K-L substitution and productivity gains on number of jobs and wage bill <br />Capital-Labor substitution 0.2 0.2 <br />Profit share (taking into account the share going to intermediate inputs and materials) of revenues 0.15 0.15 <br />Productivity gains - in levels 0.005 0.005 <br />C. Scale effects: increase in consumer prices and reduction in consumer demand <br />Labor percent of operating costs 22.1% 22.1% <br />Percent of wage costs for Medicare, Social Security, and worker compensation 10.36% 10.36% <br />Turnover reduction (as share of payroll increase) 0.11 0.11 <br />Price elasticity of demand -0.72 -0.72 <br />Annual GDP in 2019 (in millions) $98,420 $249,225 <br />Share of consumer spending in GDP 0.588 0.588 <br />D. Income effects: effects of pay increases on consumer spending and employment and employment <br />Percentage offset from reduced SNAP benefits and lower premium tax credits 14.75% 14.75% <br /> Offset from reduced EITC 0.60% 0.60% <br /> Offset from reduced SNAP benefits 4.20% 4.20% <br /> Offset from lower premium tax credits under the ACA 2.30% 2.30% <br /> Offset from reduced payroll taxes 7.65% 7.65% <br />E. Net effects <br />No key parameters used in this section <br />Source: UC Berkeley minimum wage model. <br />Future Employment Growth <br />Our estimate of future employment growth in San Jose and Santa Clara County comes from data <br />supplied by the California Employment Development Department (EDD) (2015). <br />Capital-labor substitution <br />For a discussion about capital-labor substitution and the sources we used, see section 4.2 in the <br />main report. <br />Profit share of revenues <br />We use Table 1.14. “Gross Value Added of Domestic Corporate Business in Current Dollars and <br />Gross Value Added of Nonfinancial Domestic Corporate Business in Current and Chained Dollars” <br />of the National Income and Product Accounts Tables (NIPA) published by the Bureau of Economic <br />Analysis to estimate the labor and capital share of national income. Using the 2014 data, we <br />estimate that the labor share of national income is 62 percent and the capital share of national <br />8.A. - Page 81