Will $15 minimum wage in SF slow down the Bay Area exodus? Here’s what the numbers say

It’s no secret that Bay Area residents have been flocking to Sacramento and other California cities, or even fleeing the state, to escape skyrocketing housing costs.

The minimum wage bump to $15 per hour took effect Sunday in San Francisco, becoming the first major U.S. city to reach that mark. But will that be enough to keep workers in the city by the Bay?

Data and simple math suggest that no, it probably won’t be enough.

Earlier this month, SFGate used National Low Income Housing Coalition data to deduce that at the previous minimum wage of $14 per hour, it would take 171.5 hours per week to afford a two-bedroom rental home in San Francisco. (No need to grab a calculator — there are only 168 hours in a week, so this is actually mathematically impossible.)

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The $1-an-hour boost knocks that number down to 160 hours, which works out to about 23 hours a day, seven days a week. SFGate notes that a household would need to earn $60.02 an hour to live comfortably; in other words, four full-time workers at the new minimum wage can just barely afford a decent, two-bedroom place among them. And they would probably need bunk beds.

An estimated 142,000 workers in San Francisco will benefit from the new minimum wage, the SF Examiner reports. The city has a population of about 870,000.

While it’s a win for many advocates and workers, the $15 minimum wage will likely make only a small dent in the so-called Bay Area exodus, especially as surrounding cities see the massive costs of living and housing continue to rise. In several other counties, including San Mateo and Marin, six-figure salaries are considered “low-income” for a family of four.

Additionally, as pointed out in a recent opinion piece published by the Orange County Register, the “dramatic” increase to $15 has forced some small businesses out of the Golden State. Small-business jobs are leaving, and the residents go with them.

Under state law, $15 minimum wage will be mandatory across California by 2022. The San Francisco increase to $15 an hour in 2018 is the result of a 2014 city initiative, Proposition J, which passed with a 77 percent “yes” vote. The city’s minimum wage is planned to rise in line with inflation going forward.

The East Bay city of Emeryville also reached $15-an-hour on Sunday. Berkeley will reach the mark in October.

Other Bay Area cities are on pace to hit the $15 mark later, closer to 2022. Oakland’s current minimum wage is $13.23 after a 37-cent increase Jan. 1 of this year.

A recent survey by advocacy group Bay Area Council involving 1,000 registered voters found that 461 hope to move out of the Bay Area soon. Of those 461 people, 5 percent said they’d likely move to Sacramento; 24 percent said they’d stay in California.

The median home price in the Bay Area has surpassed $900,000, according to the San Jose Mercury News. In Sacramento County, the median price hit $360,000 in May.

About 60 percent of those polled by the Bay Area Council said they think an economic downturn is coming to the region within the next five years.

The Associated Press contributed to this report.

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Article source: https://www.sacbee.com/news/business/real-estate-news/article214132889.html

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