Timeline of San Francisco Mandates
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2 Timeline of San Francisco Mandates Passage of San Francisco labor standards Airport quality standards program Minimum wage Health spending requirement Prevailing wage revisions Equal benefits for domestic partners Card check City contractor living wage; Enforcement office created City contractor living health Paid sick leave Hunter's Point Shipyard community benefits agreement
3 What happened?
4 Minimum Compensation in SF, CA, and US $14.00 $12.00 Health spending requirement* enacted SF minimum compensation** $13.12 $10.00 $8.00 SF minimum wage enacted Paid sick leave enacted CA minimum wage $8.00 US minimum wage $7.25 $6.00 $4.00 $2.00 $0.00 * Health care spending level shown for a large employer (100+ workers) ** Shows average minimum compensation for a large employer, adjusted to reflect that most employees do not use the maximum amount of paid sick leave, and that employers have alternative behavioral responses to the health spending requirement.
5 Real wages fell for the lowest-paid workers in the rest of the Bay Area, but grew in SF Inflation-adjusted hourly wages for the lowest 10 th of Bay Area workers $12.00 SF minimum wage $11.00 San Francisco $10.00 Surrounding counties (weighted average) $9.00 $ th percentile hourly real wages, in 2012 dollars Surrounding counties include San Mateo, Santa Clara, and Alameda counties
6 Comparisons show that labor standards policies did not affect overall employment. San Francisco Bay Area overall private employment by county 800,000 Minimum wage Paid sick leave Health spending requirement 700, , ,000 Surrounding counties (weighted average) San Francisco 400, , , , Indicates recession Surrounding counties include San Mateo, Santa Clara, and Alameda counties
7 The effects of the SFpolicies: surrounding counties make a good comparison group Overall employment trends in SF and surrounding counties are similar the employment lines are roughly parallel. Overall employment in both groups goes down during recessions and up during expansions. Since the SF policies affect only a fraction of the population, we do not expect differences in overall employment trends. Since overall trends before and after the policies were implemented are similar, the surrounding counties are a good comparison group.
8 Even at restaurants, employment in San Francisco remained strong relative to surrounding counties. San Francisco Bay Area restaurant employment by county 60,000 Minimum wage Paid sick leave Health spending requirement 50,000 40,000 San Francisco Surrounding counties (weighted average) 30,000 20,000 10, Indicates recession Surrounding counties include San Mateo, Santa Clara, and Alameda counties
9 Even at restaurants, employment in San Francisco remained strong relative to surrounding counties. If we were to see a negative effect on employment, we would expect to see it at restaurants. Restaurants employ a high share of low-wage workers and so they are most affected by these laws. However, we do not see evidence of a decline in restaurant employment in SF relative to surrounding counties. Restaurant employment in both groups is somewhat seasonal, but generally trends upward. Restaurant employment in SF grew slightly faster towards the end of this period, though this may not be statistically significant.
10 How was the cost absorbed? Lower turnover Higher wages increased retention rates of airport, restaurant, and homecare workers Small price increases 2.8% increase in restaurant prices due to minimum wage Higher productivity SFO employers reported improvements in worker performance, morale, absenteeism, grievances, disciplinary issues, and customer service Lower employer profits?
11 Workers treat Paid Sick Leave as insurance Of workers with Paid Sick Leave: Only 73% used any sick leave in the previous year Of those who used Paid Sick Leave: Median days taken was 4 less than the maximum of 9 days for workers in large firms or 5 days in small firms
12 Office of Labor Standards Enforcement Dedicated staff and funding Thorough, company-wide investigations Over $17 million in back wages and $2 million in penalties collected
13 How did San Francisco do it? Labor-community coalitions Ballot initiatives District elections
14 San Francisco s economy is very similar to other large cities Employment Sector share by sector, Annual wage & salary income San Francisco, 2010 San Francisco San Francisco 20 city average 20-city average 15% 10% 5% Financial Activities Financial Activities Average: $105,000 Median: $80,000 15% 10% 5% Information & Communications Information & Communications Average: $93,800 Median: $73,000 20% Professional, Scientific, Management Services Professional, Scientific, Management Services Average: $89,500 Median: $63,000 0% Manufacturing Manufacturing Average: Median: $85,100 $60,000 0% 20% Health, Education, & Social Services Health, Education, & Social Services Average: $57,400 Median: $47,000 15% 15% 15% 10% 10% 10% 5% 5% 5% 0% % % % Administrative Support Average: $46,600 Median: $30,000 Services Administrative Support Services 15% Retail Average: Median: Retail $45,100 $28,900 15% Accommodation & Accomodation & Food Services Average: $29,400 Food Median: Services $22,950 10% 10% 10% 5% 5% 5% 0% 0% Sectors correspond as closely as possible to NAICS 0% Source: American Community Survey and Decennial Census
15 San Francisco s economy is very similar to other large cities While every city has a unique mix of industries, San Francisco is not hugely different from many other large cities. Moreover, the trends in each sector over the last 20 years are similar in San Francisco and other large central cities. For example, while San Francisco has a relatively low share employed in manufacturing, other cities have been following its lead and have also seen declines in the sector. It is not only high-wage sectors where San Francisco is more concentrated than average. The city also has a higher share in the low-wage hotel and restaurant sector, Accommodation and Food Services.
16 Spreading local labor policies Airport living wage laws around the country
17 Spreading local labor policies Contractor pay-or-play health health policy policy
18 Spreading local labor policies States with minimum wage higher than federal
19 Spreading local labor policies Cities with minimum wage higher than federal
20 Spreading local labor policies and cities and states with new campaigns underway
21 Spreading local labor policies Paid Sick Leave
22 Spreading local labor policies Paid Sick Leave campaigns underway
23
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