San Francisco’s Proposed City Minimum Wage Law

A Prospective Impact Study

Residents of San Francisco, California will soon be voting whether or not to adopt a new citywide minimum wage policy. The proposal under consideration would establish a minimum wage of $15 an hour for businesses operating in the city by 2018. The minimum wage would be raised to $12.25 an hour on May 1, 2015; to $13 on July 1, 2016; to $14 on July 1, 2017; and to $15 on July 1, 2018 (see Table 1). It would then be indexed to inflation in subsequent years. As is already the case, the proposed law would cover everyone who works in San Francisco (except state and federal government employees and the self-employed).

In this report, we first estimate the number of workers that would be affected by the law and describe their demographic and job characteristics. We next estimate the resulting increase in wages and analyze their likely impacts on business costs, prices and employment, drawing in part on previous research. We then compare the magnitude of the proposed increase to those in existing local minimum wage laws.