Earlier this month, campus researchers published a study examining the possible effects of increasing the minimum wage in New York to $15 over the next five years.
The study, conducted by the Institute for Research on Labor and Employment, was requested by the New York-based Fiscal Policy Institute after New York Gov. Andrew Cuomo proposed last year to raise the state minimum wage to $15 by mid-2021. The study found that an increased minimum wage would be beneficial to workers with limited negative effects for businesses.
According to the study, raising the New York minimum wage to $15 would increase earnings for 36.6 percent of the workforce. The research also showed that additional payroll costs would be minimal for businesses but would lead to turnover reductions and increases in worker productivity.
Ken Jacobs, one of the researchers, said the study used a model that looked at factors such as productivity, turnover and employment. Though this study was done for the state of New York, Jacobs said, some of the findings may apply to California as well.
“In terms of the state of California, the overall share of workers who receive pay increases is fairly similar,” Jacobs said.
Mark Gomez, researcher for Haas Institute for a Fair and Inclusive Society, said that a lack of income redistribution to the lower and middle class hurts the economy. A minimum wage increase, he said, is critical to revert this.
“The Bay Area is the most prosperous region in the entire country, and that prosperity should be shared,” Gomez said. “California needs a living wage standard that can help put money into people’s pockets (and) help businesses make money.”
There is a popular ballot initiative for the upcoming November election that aims to increase the minimum wage to $15 by 2021.
The UC system will raise the minimum wage for its workers to $15 by 2017. In the city of Berkeley, however, discussions regarding possible minimum wage increases are ongoing.
According to Berkeley City Councilmember Kriss Worthington, advocates for raising the minimum wage are frustrated with City Council’s delays and have started collecting signatures to put an initiative on the November city ballot.
“Now that we have a new study and thousands of signatures from Berkeley voters, maybe (City Council will) be more willing to compromise based on so many Berkeley voters wanting to see change,” Worthington said.
Though some conclusions may be drawn between the study and possibly increasing minimum wages in individual cities, Jacobs notes that cities are smaller economic entities compared to states.
Measuring the effects of increasing the minimum wage depends on “how much of that spending stays local and how much of that spending goes out of that area,” Jacobs said.
The researchers, however, are embarking on a new project to model minimum wage increases for San Jose and Santa Clara County, which will provide information about how minimum wage increases affect cities and counties rather than states.
Contact Alex Fang at [email protected] and follow him on Twitter at Andrew Cuomo, city council, Fiscal Policy Institute, Haas Institute for a Fair and Inclusive Society, Institute for Research on Labor and Employment, Ken Jacobs, Kriss Worthington, Mark Gomez, New York, San Jose, Santa Clara County