Timeline of San Francisco Mandates Passage of San Francisco labor standards Airport quality Health spending standards program Minimum wage requirement City contractor living Paid sick leave Prevailing wage wage; Enforcement revisions office created Equal benefits for Hunter's Point domestic partners Shipyard community City contractor living benefits agreement health Card check 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
What happened?
Minimum Compensation in SF, CA, and US $14.00 SF minimum compensation** $13.12 Health spending requirement* enacted $12.00 Paid sick leave enacted $10.00 SF minimum wage enacted CA minimum wage $8.00 $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.
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 SF minimum wage $12.00 $11.00 San Francisco $10.00 Surrounding counties (weighted average) $9.00 $8.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 10 th percentile hourly real wages, 2003-2012 in 2012 dollars Surrounding counties include San Mateo, Santa Clara, and Alameda counties
Comparisons show that labor standards policies did not affect overall employment. San Francisco Bay Area overall private employment by county Minimum Paid sick Health spending wage leave requirement 800,000 700,000 Surrounding counties 600,000 (weighted average) 500,000 San Francisco 400,000 300,000 200,000 100,000 0 2001.1 2002.1 2003.1 2004.1 2005.1 2006.1 2007.1 2008.1 2009.1 2010.1 2011.1 Indicates recession Surrounding counties include San Mateo, Santa Clara, and Alameda counties
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.
Even at restaurants, employment in San Francisco remained strong relative to surrounding counties. San Francisco Bay Area restaurant employment by county Minimum Paid sick Health spending wage leave requirement 60,000 San Francisco 50,000 Surrounding counties (weighted average) 40,000 30,000 20,000 10,000 0 2001.1 2002.1 2003.1 2004.1 2005.1 2006.1 2007.1 2008.1 2009.1 2010.1 2011.1 Indicates recession Surrounding counties include San Mateo, Santa Clara, and Alameda counties
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.
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?
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
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
How did San Francisco do it? • Labor-community coalitions • Ballot initiatives • District elections
San Francisco’s economy is very similar to other large cities Employment share by sector, Financial Information & Financial Activities Sector Information & Communications 1990-2010 Activities Communications Average: $105,000 Average: $93,800 Annual wage & salary income San Francisco, 2010 Median: $80,000 Median: $73,000 15% 15% San Francisco San Francisco 10% 10% 20 city average 20-city average 5% 5% 0% 0% 1990 2000 2010 1990 2000 2010 Professional, Scientific, Health, Education, Professional, Scientific, Management Manufacturing Health, Education, & Social Services Services Management Services Manufacturing Average: $89,500 Average: $85,100 & Social Services Average: $57,400 Median: $63,000 Median: $60,000 Median: $47,000 20% 20% 15% 15% 15% 10% 10% 10% 5% 5% 5% 0% 0% 0% 1990 2000 2010 1990 2000 2010 1990 2000 2010 Accommodation & Administrative Support Services Retail Accomodation & Food Services Administrative Support Retail Average: $46,600 Average: $45,100 Average: $29,400 Food Services Median: Services $30,000 Median: $28,900 Median: $22,950 15% 15% 15% 10% 10% 10% 5% 5% 5% 0% 0% 0% 1990 2000 2010 1990 2000 2010 1990 2000 2010 Sectors correspond as closely as possible to NAICS Source: American Community Survey and Decennial Census
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.”
Spreading local labor policies Airport living wage laws around the country
Spreading local labor policies Contractor pay-or-play health policy Contractor pay-or-play health policy
Spreading local labor policies States with minimum wage higher than federal
Spreading local labor policies Cities with minimum wage higher than federal…
Spreading local labor policies …and cities and states with new campaigns underway
Spreading local labor policies Paid Sick Leave
Spreading local labor policies Paid Sick Leave campaigns underway
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