Proposed San Fran Minimum Wage Increase: Costs “ONLY” 15,270 Jobs

While most cities work hard to get their citizens employed, the leaders of San Fran have a ballot measure that ensures 15,270 people will be unemployed. This is a ballot measure to raise the minimum wage to $15 an hour. When government acts, it helps some and hurts others. Do you think the 15,270 are smart enough to know to vote NO on the measure—or maybe they prefer to not work and just pick up an unemployment check and watch Seinfeld reruns.

“That is the conclusion of a report authored by the city’s Office of Economic Analysis, which estimates that an hourly minimum wage increase will “reduce the city’s employment by approximately 15,270 private sector jobs by 2019… This represents approximately 2 percent of private employment in the city.”

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Higher San Francisco minimum wage fattens workers’ wallets, cuts job growth, report says

San Francisco Mayor Ed Lee proposed the November ballot measure that would boost the city’s minimum wage to $15 per hour by 2018.

 

Eric Young, San Francisco Business Times, 8/14/14 

 

Most San Francisco minimum wage workers will pocket hundreds more dollars weekly if voters approve a pay hike on this November’s ballot, but that pay boost will be a drag on the city’s overall job growth.

That is the conclusion of a report authored by the city’s Office of Economic Analysis, which estimates that an hourly minimum wage increase will “reduce the city’s employment by approximately 15,270 private sector jobs by 2019… This represents approximately 2 percent of private employment in the city.”

This November voters will decide whether to have incremental hikes to San Francisco’s minimum wage — currently at $10.74 — to $15 by July 2018. That is an increase of almost 40 percent.

Some 60,000 workers in San Francisco, or about 11 percent of the city workforce, earn minimum wage. Those employees are heavily concentrated in restaurants and bars, retail, manufacturing and personal and maintenance and repair services.

Whether or not the minimum wage hike is approved, the Office of Economic Analysis said, the city’s employment base is expected to grow, provided a recession does not take hold. But the study says the minimum wage hike will deter employers from adding as many jobs as they otherwise would have.

“The benefits (of the minimum wage hike) is that minimum wage workers will see significant earning increases, but the downside is slower job growth,” said Ted Egan, the city’s top economist, who prepared the study with principal economist Asim Khan.

Their report laid out the estimated increased earnings that an average San Francisco worker would get:

  • Food services industry: additional $125 weekly
  • Retail: additional $185 weekly
  • Social assistance: additional $75 weekly
  • Personal services industry: additional $135 weekly
  • Manufacturing: additional $197 weekly

Proponents of the minimum wage initiative say it is necessary to help low paid workers keep pace with San Francisco’s increasingly expensive rents and overall cost of living. Plus, they argue, if lower paid workers have more income, that will raise spending levels and employment tied to consumer expenditures to the benefit of all.

Opponents have said the raise will mean less job creation and increased pressure on profit margins, causing a pull back in company spending, which is also a driver for the economy.

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.