1. The impact of A $15 minimum wage on los angeles Dakota Hughes Masters of Public Administration Program Tseng College California State University, Northridge

2. Why the minimum wage? Currently hot political topicCurrently hot political topic Many people work on low wagesMany people work on low wages Statistics on minimum wage workersStatistics on minimum wage workers Income inequality has skyrocketed in the U.S.Income inequality has skyrocketed in the U.S.

3. What does $15 mean? #15NOW Campaign#15NOW Campaign Arguments in favorArguments in favor Arguments againstArguments against

4. Regression Analysis What is a regression and why is it helpful?What is a regression and why is it helpful? y i = ß 0 + ß 1 x 1 + ß 2 x i2 +... ß p x ip + i for i = 1,2,... Ny i = ß 0 + ß 1 x 1 + ß 2 x i2 +... ß p x ip + i for i = 1,2,... N P valueP value CoefficientCoefficient

5. Will it increase Unemployment? It Will Increase The wage adds to the employers production costThe wage adds to the employers production cost Companies will close jobs and demand more from higher paid workersCompanies will close jobs and demand more from higher paid workers It Won’t Increase Less turnoverLess turnover Those who work for hourly wages spend almost their entire paycheckThose who work for hourly wages spend almost their entire paycheck CEO compensation is increased, so why not labor?CEO compensation is increased, so why not labor?

6. David Card and Alan Krueger 1994 Surveyed fast-food restaurants in contiguous counties along the border of Pennsylvania and New JerseySurveyed fast-food restaurants in contiguous counties along the border of Pennsylvania and New Jersey Comparing employment level based on surveys after a minimum wage change increase in New JerseyComparing employment level based on surveys after a minimum wage change increase in New Jersey Findings: No impact, possibly slight positive impactFindings: No impact, possibly slight positive impact Previous Research

7. Dube, Lester, and Reich 2010 Took Card and Krueger’s method and applied it to all contiguous counties with minimum wage increases over 16 year periodTook Card and Krueger’s method and applied it to all contiguous counties with minimum wage increases over 16 year period Findings: No significant impact on employment or inflationFindings: No significant impact on employment or inflation Previous Research

8. Can firms remain profitable? Firms will not make as much money due to the increased cost of labor, especially in labor intensive industries such as fast food and retailFirms will not make as much money due to the increased cost of labor, especially in labor intensive industries such as fast food and retail Firms will ship jobs away!Firms will ship jobs away! Automation?Automation?

9. Pollin and Wicks-Lim 2013 & 2015 Analyzed whether fast- food restaurants could remain profitable at both $10.50 (2013) and $15 (2015) per hourAnalyzed whether fast- food restaurants could remain profitable at both $10.50 (2013) and $15 (2015) per hour Results: Both of these are feasible with modest price increases. This is accounting for the ripple effect that would be felt by those earning above the new minimum.Results: Both of these are feasible with modest price increases. This is accounting for the ripple effect that would be felt by those earning above the new minimum. Previous Research

10. Well what about prices? It is thought that prices increase due to the wage increasesIt is thought that prices increase due to the wage increases If minimum wage is increased by X% then prices go up by X% as well so it cancels outIf minimum wage is increased by X% then prices go up by X% as well so it cancels out Contiguous countiesContiguous counties

11. Lemos 2004 Examined minimum wage increases impact on prices in BrazilExamined minimum wage increases impact on prices in Brazil Findings: A 10% increase in the minimum wage created a 0.02% increase in prices 2 months before the wage increase and a long run change of 0.07%Findings: A 10% increase in the minimum wage created a 0.02% increase in prices 2 months before the wage increase and a long run change of 0.07% Previous Research

12. Impact on los angeles Los Angeles is expensiveLos Angeles is expensive Wages are lowWages are low $5.9 billion stimulus$5.9 billion stimulus Over $414 million in tax revenueOver $414 million in tax revenue Create over 46,000 jobs in consumer-oriented industriesCreate over 46,000 jobs in consumer-oriented industries

13. Impact on los angeles There are roughly 238,000 people who are in poverty and working currentlyThere are roughly 238,000 people who are in poverty and working currently This would affect over 700,000 workersThis would affect over 700,000 workers Education, Healthcare, Retail Trade, and Food Service and Accommodations industries are most impactedEducation, Healthcare, Retail Trade, and Food Service and Accommodations industries are most impacted Of those living in Los Angeles some cities like Burbank employ many in low wage jobsOf those living in Los Angeles some cities like Burbank employ many in low wage jobs Would result in over $341,000,000 savedWould result in over $341,000,000 saved

14. Impact on Los Angeles

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17. Questions?