Low-wage workers might make more in SF, but housing costs are still out of reach 

click to enlarge The City had a net loss of about 30,000 workers with incomes of less than $35,000 from 2008 to 2012. - COURTESY OF THE FEDERAL RESERVE OF SAN FRANCISCO
  • Courtesy of the Federal Reserve of San Francisco
  • The City had a net loss of about 30,000 workers with incomes of less than $35,000 from 2008 to 2012.

San Francisco's high minimum wage — it reached $11.05 in January and is slated to increase again in May — might be enticing to workers, but it is not the main reason more and more low-income workers are commuting to The City while living elsewhere.

Housing prices in San Francisco and the South Bay have continued to increase for the better part of the past decade, and economists say that has caused more people to move east while still holding jobs in The City.

"With the rise of housing prices, we've seen that the affordability gap has really opened up," said Jordan Levine, director of economic research at Beacon Economics. "So the amount of savings you're looking at even by migrating east is pretty wide from a historical standard."

San Francisco lost approximately 30,000 workers (94,565 moved in while 125,150 moved out) with incomes of less than $35,000 a year from 2008 to 2012, the American Community Survey highlighted in a recent blog post from Federal Reserve Bank of San Francisco.

The median price for a home in San Francisco and the South Bay stands near $1 million today. Rental costs are tight as well, Levine said, hitting an average asking price of $3,057 a month.

"That's simply just not within reach of the average worker," he said.

Levine said economists have only collected precise data on the migration of workers from counties like San Francisco since 2007, yet the trend after that has demonstrated a greater number of low-income individuals moving out of The City than into it.

This is all while the number of low-wage jobs available in San Francisco edged forward from 2008 to 2013, said research associate William Dowling at the Federal Reserve of San Francisco.

"This raises new problems as workers are forced to commute farther for their jobs and may become disconnected from local economic opportunities," Dowling said in the blog post.

In the post, the bank suggests that the exodus of the average worker might be due to a growing number of tech companies like Twitter and Salesforce calling The City home and therefore driving up the cost of living.

Another possibility, as Levine said, is individuals might just be moving east for the greater quality of life — larger houses, bigger yards and the suburban lifestyle.

Or San Francisco's higher rate of pay is attractive to those on the low end of the minimum-wage spectrum, he said. That is what the data does not show.

"The trend of low-income individuals leaving San Francisco is something most residents of The City have known about for quite some time," Dowling said. "However, much of the conversation around this topic has tended to be anecdotal in nature."

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Sunday, Apr 22, 2018

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