Do Businesses Flee Citywide Minimum Wages

In 2003, the cities of San Francisco, California, and Santa Fe, New Mexico, each passed citywide minimum wage laws, with broad coverage and wage levels set significantly above the federal level of $5.15 an hour. In the search for policy tools to raise living standards for working families, other cities have also considered such policies. Indeed, local policy makers across the country have looked to these two cities for lessons learned.

Policy makers generally are most concerned about the impact of citywide minimum wage laws on overall employment in their city and on whether their large retailers — who generate considerable sales tax revenue for the city — will respond by moving outside the city or not locate new stores inside the city. In this report, we provide a brief overview of what is known about the impact of the San Francisco and Santa Fe laws on employment and on large retail businesses.