Cost of San Diego’s minimum-wage boost: 4,000 restaurant jobs

Cost of San Diego’s minimum-wage boost: 4,000 restaurant jobs
(Image via LAT)

[Ed. – Note that that’s an estimate based on statewide job performance.  Which continues to suffer on average from the still-depressed agricultural and exurban areas, the ones hit hardest by the housing bust and the artificial drought.  If statewide performance were a higher benchmark, as it was 10 years ago, the estimate of jobs lost or not created due to San Diego’s minimum-wage increase would be even higher.]

California is hiking the statewide minimum wage to $15 per hour by 2023, and San Diego is getting a head start on the higher wage mandate—and, maybe, the consequences of it.

Rather than inch upward from $10 per hour to $10.25 per hour in January 2016, as the rest of the state was doing, San Diego jumped its minimum wage to $11.50 per hour. In the year and three months since then, the number of food service jobs in San Diego has dropped sharply, with perhaps as many as 4,000 jobs lost, or never created in the first place.

“If job growth in the restaurant sector had just kept pace with the state’s performance … the industry could have created 5,200 jobs instead of the 1,300 that took place,” Lynn Reaser, chief economist of the Fermanian Business & Economic Institute at Point Loma Nazarene University, told Dan McSwain, a columnist with the The San Diego Union-Tribune.

Economists say the restaurant industry is a good barometer for the consequences of minimum wage increases because those businesses rely heavily on low wage workers, operate on small margins, and have high rates of turnover (that is, restaurants tend to pop-up quickly in some areas and go bust just as quickly in others).

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