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 74 idleness. Positive effects on absenteeism and worker engagement would add to the productivity improvement. 20 Taylor and Houthakker’s industry elasticities are based on regressions of U.S. panel data across over 300 cities and pooled over 1996-99. As we discuss below in Section 5.5, we do not expect that a substantial component of consumer sales will move outside the state’s borders. Liu and Chollet (2006)’s review essay suggests that the price elasticity of demand for out-of-pocket individual healthcare expenses is -0.2. Our health care elasticity recognizes that employers shift their cost of health care on to employees. We also recognize that for those with subsidized coverage, increases in premium costs for lower-income families—who are more price-sensitive— are borne by the federal government. 21 Annual consumer spending for San Jose (respectively Santa Clara County) is estimated at 58.8 percent of IMPLAN’s estimated GDP for San Jose (respectively Santa Clara County). This percentage excludes the government share of health care costs. 22 IMPLAN household spending model (proportional to city consumer spending patterns by household income level), using reduced consumer spending in Row 3 and forcing IMPLAN to apply 100 percent of the reduction in the city; see the appendix for details on IMPLAN modeling. 23 This includes an offset of 4.20 percent for reduction in SNAP, and 2.3 percent in lower premium tax credits and cost sharing subsidies under the ACA (Congressional Budget Office 2012). We also reduce the aggregate increase in wages by lost earnings due to estimated job loss in Panel A. This offset may be too high. According to Chodorow-Reich and Karabarbounis (2015), the consumption expenditures of the unemployed equal 75 percent of the consumption expenditures of the employed, even after taking into account the limited duration of unemployment insurance benefits. Their result echoes a similar result by Aguiar and Hurst (2005) for food expenditures only. 24 IMPLAN household income model for New York State, using net wage increase from Row 5 and subtracting net wage increase going to affected workers who live outside New York State; see Appendix A2 and Day (2013) for more details on IMPLAN. The net wage increase is distributed across household income categories by the household distribution of increased wages from the minimum wage increase. Our wage simulation model estimates that 6.6 percent of increased wages will go to workers living outside the state. 25 IMPLAN household income model for New York State, using net wage increase from Row 5 and subtracting net wage increase going to affected workers who live outside New York State; see Appendix A2 and Day (2013) for more details on IMPLAN. The net wage increase is distributed across household income categories by the household distribution of increased wages from the 8.A. - Page 88